Silver Investor: This Weeks Economics Update

Published: Sat, 07/03/10

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Hello ,

What's Inside:

  • July 2010 Morgan Report Poster

  • Question of the Week

  • Audio of the Week

     

The Morgan Report

The July 2010 Morgan Report Has Been Posted
In this issue we focus primarily on the silver market from a mining stock perspective. We also tackle questions from your members in our Letters to the Editor section.

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Question of the Week

Question:  Hello David and staff –  I realize I don’t have much, if any, leverage or clout when I ask questions, because I am not yet a subscriber. But, I’ll try anyway.

I do appreciate receiving information on small PM companies, like SNS Precious Metals below, and your recently highlighted SilverMex Corp.

Both of these are “penny stocks”, and as you realize, a number of long-term PM advisors are very cautious or even distinctly dubious about the prospects for success of most of the hundreds or even thousands of companies whose share price is below US $1.00 and many below US$0.50.  Each of these recently noted companies are in that second price category.

My question:  When your site forwards these stats on PM companies, have you done any “vetting” at all on them, i.e., you believe they will not likely go bankrupt during the following 2-5 years.  I put some money into Li3 Energy (LIEG) – a company highlighted in your writings - a couple of months ago, and it’s now less than half of the US$0.84 purchase price at the time it was mentioned by your site.  I know these can fluctuate widely, but many  of these stocks (especially if they are hedged) will not last through the gold and silver mania phase.

Any clarification or guidance you can offer will be greatly appreciated.

Answer:  Yes-- We do not send these emails to our list for anyone that comes along and asks.

 
Yes they are highly speculative and NOT suitable for most accounts. Any of them that do remain standing should go ballistic during the mania / panic buying phase-- but as you imply some will not be there. We go into much more detail in the report
 
BUT -- pennies is NOT my focus-
 
We are serious and put serious money into serious companies.  For example, on the Mater Mind call (Premium Service) I just finished, one of our clients asked about how to spread between the sectors outlined in The Morgan Report.
 
I gave the example that someone with $100,000 invested into the PM stocks. 90% is in the top tier 5-8 stocks we feature each month.  So, that would be $90,000 spread through six top tier companies for example.
 
The remaining 10% or $10,000 would be spread equally through our speculative list. So, that would be $1000 in each of the ten, we never go above ten formal speculations in our list, but do write up more than that through the year.
 
So obviously, the $1000 is money you could afford to lose which is what our disclaimer states. No one wants to lose money of course but these "story stocks" are mostly that .. a company or stock with an interesting story to go with it.
 
Some of our clients, never drop a dime on the spec list, they won't bother but are interested in our analysis of the global economy, precious metals, timing, and questions from readers.
 
Trust this helps,
 
DM

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Audio of the Week

David on HoweSreet.com
Who do you trust - government or gold?

Listen now, click here.


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Information contained herein has been obtained from sources believed to be reliable, but there is no guarantee as to completeness or accuracy. Because individual investment objectives vary, this Summary should not be construed as advice to meet the particular needs of the reader. Any opinions expressed herein are statements of our judgment as of this date and are subject to change without notice. Any action taken as a result of reading this independent market research is solely the responsibility of the reader. Stone Investment Group is not and does not profess to be a professional investment advisor, and strongly encourages all readers to consult with their own personal financial advisors, attorneys, and accountants before making any investment decision. Stone Investment Group and/or independent consultants or members of their families may have a position in the securities mentioned. Mr. Morgan does consult on a paid basis both with private investors and various companies. Investing and speculation are inherently risky and should not be undertaken without professional advice. By your act of reading this independent market research letter, you fully and explicitly agree that Stone Investment Group will not be held liable or responsible for any decisions you make regarding any information discussed herein.


 


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