Wednesday, March 28, 2012

Morgan Stanley Predicts $2,175 Gold in 2013

They are also predicting an average silver price of $35 this year and $42 this year - which I believe are EXTREMELY conservative estimates. Their 2012 average price is $1,845, which I actually agree with (considering we're only around $1,650 now and haven't even touched $1,800 yet in 2012).

They are saying QE3 could happen in the first half of this year.

"Investor demand for gold as a hedge is likely to keep gold prices elevated and Morgan Stanley analysts are bullish on gold in 2012."

"While the current strength in the USD is a headwind to USD gold prices, we expect aggressive Fed action, including and the likely adoption of QE3 in 1H12, to be positive for gold, even if the USD continues to strengthen."

Source: Morgan Stanley

Inflation Doesn't Necessarily Make Real Estate a Good Idea...

We all know that inflation is good for gold, silver and commodities in general. But what most people don't realize is that an inflationary environment does not necessarily make real estate a good investment (but don't tell this to Ben Bernanke!).
"Inflation—and hyperinflation—affects two things immediately: Near-term necessities (such as food and fuel), and credit.

The effects on basic necessities is obvious—but the effects on credit are more subtle and complex.

How does inflation and hyperinflation affect credit? By driving up interest rates—obviously. But what is the effects of rising interest rates in an inflationary/hyperinflationary environment?

Real estate prices collapse."

I urge everyone to read this blog below. And remember that PRICE is nothing... and VALUE is everything. We could very well see real estate prices go up a little bit in the coming years, but in no way does this mean that real estate will be a good investment. Sure, your home could go up in price from $250K to $300K, but what does that matter if gasoline is $6, food prices and health care costs much higher, gold at $5,000, etc? Some things may go up in price - but nothing will go up in value more than gold and silver in my opinion. There will be much better buying opportunities in real estate, but that time is not now.

Read more:

Primero Mining Posts Solid 4Q

Primero Mining posted a pretty good 4q and full year 2011 results today:

"The Company reported 2011 net earnings of $67.8 million ($0.77 per share) with adjusted net earnings of $28.3 million ($0.32 per share). Operating cash flows(3) were $80.2 million ($0.91 per share)."

For the 4Q: "The Company earned net income of $36.8 million ($0.42 per share) in the fourth quarter of 2011, compared with net income of $6.9 million ($0.08 per share) in the fourth quarter of 2010 due mainly to the impact of the APA filing and the resultant recovery of income taxes retroactive to the date of acquisition of the San Dimas Mine." I do expect this filing to be ruled in favor of Primero at the end of this year. 

A production decision to expand the San Dimas mine will be made in the 3Q. Primero currently trades at only $2.50 with a market cap just over $200 million. They are expecting upwards of $90 million in free cash flow for 2012 - Can you say undervalued?

I am long PPP. 

Monday, March 26, 2012

Microcap Update: Alexandria Minerals

I expect Canada gold microcap explorer Alexandria Minerals (TSX-V: AZX; US - ALXDF.PK) to release an Initial NI 43-101 resource on their Akasaba property VERY shortly (perhaps Tuesday).  The company already had some 900k ounces (Measured, Indicated and Inferred) and I am expecting Akasaba release to push them well over 1 million ounces! (Perhaps in the 1.3-1.5 mill. range).

The shares currently trade at only .12-.13 cents (market cap of only about 18 million).  This company has a ton of potential IMO and is very undervalued given the current resource and future potential of more discoveries. They are also located in one of the most friendly mining jurisdictions in the world. Keep an eye on this one. 

I am long ALXDF.PK.

Read more at their website -

Sunday, March 25, 2012

Insider Buying Alert - Northern Tiger Resources

One microcap gold explorer which I own and think is a good buy here is Northern Tiger Resources (NTR: TSX-V). The gold explorer market is severely depressed right now with many explorers trading at ridiculous valuations, but I expect that to change sooner than later.

"Northern Tiger Resources Inc. (NTR: TSX-V) is a Canadian-based resource exploration company focused on gold and copper exploration in the Yukon."

The 3Ace property has big potential! Here are some recent drill results:
  • 3A-11-19 - 1.18 g/t gold over 31.7 metres
  • 3A-11-33 - 2.58 g/t gold over 53.0 metres, including 17.72 g/t over 2.0 metres
  • 3A-11-34 - 4.37 g/t over 10.0 metres and 70.11 g/t over 1.1 metres          
Insiders have been buying: The CEO has purchased over 150K shares in the past month alone, most recently on March 16. 

I am long Northern Tiger.


Monday, March 19, 2012

What You Need to Know About the Capital Gains Tax

If there is one thing that you cannot avoid, it is paying taxes, and the same goes for paying taxes on capital gains made in the stock market -  you must understand what the capital gains tax is! It is important to understand different tax structures to see how much you have to pay on your capital gains.

There is a big difference between short term capital gains (positions sold less than one year) and long-term (more than a year). 

How to Use a 1031 Tax Deferred Exchange to Get Rich

There are many ways you can get rich investing in real estate, and using the IRS and their 1031 Tax-Deferred Exchange tax strategy is one great way.

By using the 1031 you will not have to pay taxes on capital gains (they are deferred) on your real estate as you would instead swap out to another like-kind property. It is a great way to move up to a higher-valued property and get more cash flow!