How to buy Canadian mining stocks

By Dudley Baker
Common Stock Warrants

We are of the opinion that the Canadian mining stocks are close to a spectacular breakout very soon and we think it timely to revisit one of our articles of a few years ago.

Are the potential gains only for Canadian investors?

Frequently I read comments from other analysts regarding the difficulties of trading, i.e. buying, the Canadian mining stocks. They usually suggest investors seek out a broker that specializes in these stocks and while that is not bad advice, it is not necessary to do so.

There is no secret code to be entered to play this game. It’s just a matter of understanding a few basic rules and you will soon be a professional yourself.

Continue reading

Most Analysts Still Don’t Get It

By Dudley Baker

There are a lot of good men and women writing newsletters in the resource sector. All have the best intentions of providing their readers/subscribers will quality content and some good stock picking opportunities.

However, it is how some of these analysts approach their stock selections that is the subject of our thoughts today.

How do they decide which companies to research and to ultimately recommend?

We could probably write volumes on this subject but we will try and focus our views for the sake of brevity.

Everyone talks about People and Properties, People and Properties, People and Properties ………

Sounds so damn simple doesn’t?

But many in the business would not know what it means to go with Good People/Good Management.

What the heck does it really mean?

Good Management does not mean just being approached at a investment conference by management of a resource company looking for an analyst/newsletter writer to tell their story.

Good Management/People does not necessarily mean just having 20 plus years in the business, but rather have they actually accomplished something, i.e., were they responsible for discovering a significant resource, taking a company into the development and/or producing stage and possibility selling ‘their’ company to a major mining company and thus creating great shareholder value for their shareholders?

So now let me contrast this statement above with what I just read from another analyst just recommending the shares of a new company to their subscribers. Obviously, all names will not be mentioned, but the facts are correct.

The president of this small exploration company was being interviewed. Initially, I liked what I heard. A small share structure of less than 40 million shares outstanding and a market price of less than $0.25 and a property in Mexico, ah tell me more ….

But before I even read more, here is what I did, and what I do for all new company names which I hear. Immediately, I look at a price chart with the idea of seeing if the stock is near its high or its low, i.e., have the shares just doubled in value? I want to be buying low. Also, within two minutes more, I know exactly what share positions that the management has in ‘their’ company. This can be the most telling factor of all in a search for new opportunities.

OK, now back to our interview, the analyst refers to the strong management team of this small exploration company and what a good job they are doing.


What I already know from my two minutes of research is that:

This is no management team that I want to follow.

Why? First, the president of this company owns only 12,500 shares of stock with a current value of appropriately $2,400.

I wish I was kidding, but I am not.

The other members of that ‘strong management’ also have a small or no position in the company’s shares. Sure, they were issued some stock options, but it didn’t cost them anything.

Folks, stock options do not count, not in my opinion. I want to see management with ‘skin in the game’, real money they have invested in the company and they should they have a significant stake — a lot more than I would be investing, assuming that I liked the story.

So, I am already turned off on this story and then see that the company has virtually no cash, hell I have more cash in my account that this company currently does, and the President is wearing many different hats, other consulting jobs, other companies, and well, in my opinion, not focused on advancing this alleged interesting new opportunity being presented to the subscribers of this other service.

Why another newsletter would want to recommend shares in a story like this is frankly beyond my comprehension. End of story.

All of us in the business as well as you as readers and investors in this resource sector need to be able to cut through the B.S. and get to the facts.

Our service is here to assist our subscribers with making money and reducing risk by reasonable research which is at our finger tips and which we enjoy.

We trust you are following us at

Each service has it’s own different and specific approach to assist subscribers in picking the big winners.

“This train is not going to wait for you, you are going to have to jump on.”

When To Buy Warrants?

By Dudley Baker

When does it make sense to buy warrants?

First, if you do not know about warrants, please visit our Learning Center for some background and don’t forget that warrants have actually been around since the 1920s and even AT&T once had a warrant trading.

Secondly, if you are not interested in warrants, no problem.

Since, starting our service in March 2005 as basically a warrant database service, we have greatly expanded our services to subscribers. Did you know we have links to LEAPS and Options available on all resource shares?

Continue reading

The best is yet to come, but not now

By Dudley Baker

The resource markets have been on fire lately and we are excited about where this will lead us in the coming months.

But not now!!

Even though on Friday, our #1 position (a silver company) and #2 position (a gold company) hit highs for multiple years, we must remain cautious.

Why? you ask.

The markets are bucking serious overhead resistance as we show you in the gold charts and the silver chart below.

It is so easy to get carried away with the excitement of the day but let’s stay rational and if you have some cash reserves, hold off deploying it at least for a few weeks. We will try and let you know as best we can the opportune time.

Continue reading

Resource Remorse

By Dudley Baker

First we want to welcome all of the new subscribers joining us. Your timing could not be better and we appreciate your confidence in subscribing to our unique services.

So, how about it?

Are you having regrets of investing in the resource sector?

I’m sure many of you are questioning your decision and no doubt you have plenty of company right now.

Continue reading

Geopolitical Risk: Are Investments Safe?

By Dudley Baker

First we want to welcome all of the new subscribers joining us. Your timing could not be better.

The natural resource sector has always been a risky place for investors, however, with patience and some good stock picks, investors can be greatly rewarded for the risks taken, with gains sometimes as much as 500% to 1,000% or more.

Another important factor which MUST NOW be included into your investment decisions is the geopolitical risk.

What this means is what countries are you willing to accept the geopolitical risk of investing in that country?

Continue reading

Are you making money in these markets?

By Dudley Baker

  • Winners and Losers
  • Reversal of Friday’s Nightmare in Some Shares
  • Gold Market Poised For A Break Out

Winners and Losers

All of us as investors hate to see the violent swings in the resource shares. Get use to it guys, as this is the norm for this sector. At times we are on a great roll and at other times like now, we are being challenged and many investors are leaving the sector and may never return. I really hope that my subscribers are not in this later camp as that is EXACTLY THE WRONG THING TO DO at EXACTLY THE WRONG TIME.

Continue reading

This is no time to quit precious metals

By Dudley Baker
Precious Metals Warrants

We suspect that many precious metals investors are saying, “We don’t want to play anymore!” and our reply is, “You want to quit right now, right at the bottom of this cycle? You must be crazy — crazy with a capital C!” True, this is a very challenging market environment for resource shares, but we know what the ultimate outcome will be: higher share prices. The only question is “when” and our opinion is that we are very close in time (within days or a week or two at most) of being able to say that the lows are behind us. Let me explain.

Unfortunately, most resource investors, especially those new to this sector, are greatly disillusioned, have little staying power and are just scared to death. Who can blame them? They have spent all of their psychological capital and the theme of the day for them is, “How low can they go?”

Sure, we understand why investors are upset watching their portfolio go down, virtually day after day, but this current depressed environment is the seed for making investors wealthy. The buying opportunities are everywhere. As the expression goes, to make money you need to ‘buy low and sell high’.

We believe we are near enough to a bottom that if you have some remaining cash you should be putting it to work very soon. No one is going to ring a bell and call you and tell you the bottom is in place, you must make that decision for yourself. In our opinion, now is the time to suck it up, put on your big boys pants, keep your positions, and ride this out. To quit now would be the worst possible thing to do. The day will come when we look back on this time as being one of the best buying opportunities for the entire bull market and yes, we are still in a bull market.

What always follows a consolidation? A Rally!

Investors actually should be grateful for this buying opportunity and take full advantage of this current depression situation. Get some good advice, subscribe to some good services and make some good decisions. A few months from now you will be a happy camper, smiling, laughing and making money once again. It is just a matter of timing.

I always like to share a few charts with readers as to where we are in the big picture. The first chart below is a long term chart of gold from the beginning of this bull market back in 2001 followed by a chart for the HUI (Gold Bugs Index) and a chart of the performance of the Canadian Venture Exchange.

Gold Pricing Since 2001

As we write this piece early on Thursday morning, gold is plunging, down also $20 to $1,634.

You can see from the chart the 65 Week MA is at $1,621. We are there and history shows us this has provided great support for the entire bull market.

The HUI Trend Since 2001

The above chart on the HUI reflects that this morning we are heading back down and actually retesting the lows of last week. The 400 range should provide us with great support. Looking at this chart it is easy to see the challenges for investors in resource shares. It is difficult — perhaps impossible — to see a long term trend which bodes more for a trading market than a buy and hold.

The S&P/TSX Venture Exchange Performance Since 2001

The chart above is representative of most of the juniors and exploration companies and is a picture of another nightmare for long term investors. To us, it looks like the Venture is holding up better at this point as we are nearing the bottom.


The above charts show that gold and its associated stocks are still in a long-term uptrend and currently searching for a bottom before the next big up move.

In closing, this is not the time to quit. As we said earlier in the article:

“In our opinion, now is the time to suck it up, put on your big boys pants, keep your positions, and ride this out. To quit now would be the worst possible thing to do. The day will come when we look back on this time as being one of the best buying opportunities for the entire bull market. This is THE time to be loading up on quality positions.”

How to Evaluate Warrants

By Dudley Baker

Let’s get back to warrants, which ones, why, etc.

The first issue or question is, a warrant on what?

You must like the specific company, its management, its properties, geographical locations and its prospects for a rising share price.

Only then should investors ask the next question, ‘does this company have any long-term warrants?’

Continue reading