Gold mining stocks have taken a beating...
KNOWN AS The Mercenary Geologist, Michael S. "Mickey" Fulp has more than 30 years' experience searching for economic deposits of base and precious metals, industrial minerals, coal, uranium, oil and gas, and water in the Americas, Europe and Asia.
In this interview with The Gold Report, Mickey Fulp explains why he expects a lot of the patient money sitting on the sidelines to get itchy soon...
The Gold Report: In the midst of a number of record three-digit swings in the Dow of late, the market's just pounded some otherwise healthy precious metals stocks. You pointed out in a July Musing that TSX junior resource valuations were down 20% from their March highs. Is this a good time to take a look at micro caps, Mickey?
Mickey Fulp: I think late summer is always a good time to take a look at our junior resource sector because of disinterest during the doldrums. At some point during the summer, stocks oftentimes drift down to their yearly lows or at least a trough.
If you looked at a chart of the Toronto Venture, you'd probably see summer troughs almost every year. Sometimes they last for a couple of months and at other times as little as a week. This year's summer doldrums, caused by lack of liquidity and lack of buying interest, has been going on for a couple of months now and the Venture Exchange continues to drift lower. The TSX index is down 35% from its highs in early March, right before the Prospectors and Developers Association of Canada (PDAC) conference.
So, yes, I think this is a buying opportunity for some of the fundamentally strong micro caps.