By Doug Hornig
Casey Research
It’s not exactly news that gold mining stocks have been in a slump for more than two years. Many investors who owned them have thrown in the towel by now, or are holding simply because a paper loss isn’t a realized loss until you sell. For contrarian speculators like Doug Casey and Rick Rule, though, it’s the best of all scenarios. “Buy when blood is in the streets,” investor Nathan Rothschild allegedly said. And buy they do, with both hands — because, they assert, there are definitive signs that things may be turning around.
So what’s the deal with junior mining stocks, and who should invest in them? I’ll give you several good reasons not to touch them with a 10-foot pole… and one why you maybe should.
First, you need to understand that junior gold miners are not buy-and-forget stocks. They are the most volatile securities in the world — “burning matches,” as Doug calls them. To speculate in those stocks requires nerves of steel.