HSC double-digit gainer #70: 32% on Silvercorp. (SVM)
Today's Financial News - Posted November 18, 2009
Record high gold prices are fueling a bull market in silver stocks. One of our TFN Hot Stock Confidential silver picks, Silvercorp. (NYSE:SVM) just exceeded our adventurous profit predictions by 50% — even as our wealth-preservation stop loss was triggered.
by J. Christoph Amberger
Baltimore, MD TFN: Gold is an asset notorious for not generating returns other than speculative gains. It doesn’t pay interest or dividends. But at this point, neither does the U.S. dollar. Or the yen. Or the euro, pound sterling, Icelandic krona:
The comparative opportunity cost of holding gold has been eliminated! Plus, the cash flows out of the dollar have created an asset bubble that will keep inflating!
How long will this last?
As long as the Federal Reserve keep punishing dollar savers with non-existing interest rates! That may be at least another year…
Not because the world is abandoning “fiat currencies”… but because holding dollars is a losing game now — engineered and maintained by the U.S. government!
So far, we’ve been rubbing our hands as gold went up. Gold bugs may be up twenty percent for the year. But our silver stocks are beating that yield by multiples!
In case you didn’t notice, our Hot Stock Confidential silver picks have been soaring over the past couple of days. A good thing, unless you have to make a decision on how to proceed from here!
Our core pick Silver Wheaton (NYSE:SLW) is now up 66% over our buying range. Laura Cadden’s Silvercorp. (NYSE:SVM) exceeded her original profit horizon of “20% in 4 months” by ringing in at 36% as I write.
In the medium to long term, we see only upside for gold and other precious metals. In the short term, there’s lots of potential for pullbacks.
Establishing stop losses in situations like this is a matter of “damned if you do, damned if you don’t”. It works like lines at a supermarket checkout: The one you chose inevitably slows down to a crawl the minute you line up.
The moment you set a stop loss, it usually gets triggered.
We’re going to take this risk — but allow ourselves just enough rope to hang ourselves with, basing our stop loss on the maximum recommended entry price of the original recommendation. This morning, we recommended:
For SLW (”buy below $10″), we recommend you establish a 50% stop loss at $15…
For SVM (”buy under $5.50″), we recommend you establish a 30% stop loss at $7.15…
SVM’s stop loss was triggered after lunch, kicking us out of the position with 32% gains over our official entry price in just over a month!
This was double-digit gainer #70 for HSC Members so far this year… and maybe one of the 70 very good reasons why HSC Member T.G.recently wrote to us to say, “Just want you to know I have tried several stock recommendation services. None comes close to being dead on target as HSC has. I have finally found my home for investing.”
Our next Hot Stock Pick is coming out this Thursday. With gold futures at record highs of US$1,151 an ounce today, we’re going to stick with a precious metals pick: At today’s levels, the gold reserves of this junior Canadian gold miner are worth a whopping $460.4 million!
Let’s put that into the fuzzy math of financial newsletter marketers: With 333.42 million shares outstanding, $1.70 currently buys you 1.38 ounces or $1,589 worth of that gold!
As gold prices keep moving up in the great game we call the Commodities Carry Trade, this U.S.-traded stock could snag you a cool 30% gain before New Year’s.
Hot Stock Confidential members will be receiving this Hot Stock Pick of the week tomorrow before noon. We hope you’ll be one of them. Join up right here!
Next Article: Natural gas: The bear market continues… to the tune of 342$ gains!
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