IKN

And thereby hangs a tale

Relative weakness in juniors

In a sell-off, sometimes there are no choices, as those who took margin calls this morning know full well. However, those of us who never extend to margin get to choose whether to join in the selling or watch from the sidelines (or open the account page and watch the paper value of their juniors port sink in realtime, if masochism is part of your make-up). For sure selling is a valid option, but for those who don’t (and include me in) the job is watch what is being sold off:

It may not be a popular message among those wishing a thousand deaths on the sector and spittin’n’growlin at the mere thought of mining stocks this morning, but gold is essentially UNCH over the five days. It’s why we own bullion, after all. Also note that quality counts, as sector leaders NEM and GOLD are holding up better than their benchmark GDX. However, let there be no doubt that juniors are having a true woodshed moment and GDXJ here is just a sampler of the real damage happening as margin calls force sales across the board. So remember the immortal lines of Rudyard Kipling, “If you can keep your head when all about you are losing theirs, you have also been trading juniors for more than a couple of years and have seen this mess before, my son.”

3 Comments

    A Beaten Down Prospectors Cabin In The Woods The Deep Dark Woods of British Columbia 09/05/22 11:11 am

    Advice from Mr. Wonderful …………

    https://www.youtube.com/watch?v=x5t4OCP0Lz4

    Reply
    Joe Philadelphia, US 09/05/22 11:22 am

    I have been through sell-offs like this many times and have always survived and prospered as long as I held quality companies. However, I must admit it is never pleasant.

    Reply

      Indeed, you got the three key words JG, hold quality companies. And the pit-of-stomach feeling I had this morning never goes away, it just takes less time to process after a few cycles.

      Reply

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