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  /  Insights   /  Now you may know what it was like in 2001, and even after….

Now you may know what it was like in 2001, and even after….

When I turned bullish on gold and silver in 2001, I had an impossible time convincing anyone I talked to. Even miners and coin dealers had given up years before. I well remember the doubting looks on their faces.

And I suppose you couldn’t blame them. They had not taken vacations from the gold market for years the way I had. Day after day of watching had simply beaten them down.

There were many miners that were trading at or even below their book value. I was reminded of this when a sharp-eyed reader, RE, pointed out that SSRM last week at least twice was trading below price to book value. This is a great sign that lows are in. Many miners are trading at price to book values of 3 or under. And just as they are, and just as they were 20 years ago, it is hard to get anyone to buy them.

Some things never change!

​Compare the price to book ratios of the most popular stocks to see how different things look between the expensive and the bargain stocks. Apple is at 57.5 times book value. For Tesla it is 27.7.

The markets seem intent on torturing all holders of metals. People need to see prices moving in their direction before they’ll jump in…at least most people. The bull market that began in 2001 needed several years to start convincing people. Prices had to double from the $256 lows before people began talking about it.

I don’t have any guarantees that the worst is over. After all, in March of 2020, when Covid woke the world up, prices collapsed to $1200 for a while. Of course, from those lows, gold went to $2100 a few months later, but how many people wanted to buy at the lows?

It is a fact that people always lose hope at the lows, not just of gold, but of anything. Trying to talk them into staying the course is usually an exercise in futility. So there is not much I can say to you now.

I am holding all my positions, but can understand those who just want to cash out. If I can offer any form of help, it is to not watch prices each day. That tends to destroy any long term perspective and leads people to get out at the exact wrong times. However, I know that at times like this, it is hard not to watch the hourly moves.

I’ve been hearing from people who have never been pessimistic that now, finally, they are ready to throw in the towel. Maybe, just maybe, that is what the market needs to finally turn around. No more constant cheer-leading but instead the deepest, darkest pessimism everywhere you look.

So I won’t waste your time by cheer-leading now and will only point out that it is not just a cliché that nights look the darkest just before the light starts. In markets, when these turns finally come the ranks of holders are almost always much thinner.

I know from experience that I have done as well as I have over the years by taking positions–or keeping them– at the exact times when pretty much everyone else thinks I am wrong or even crazy. I just listen to my own ‘drummer’s beat’.

Again, I realize that nothing I can say at this point will change anyone’s mind. I am expecting a lot of you to throw in the towel, probably this week. You are only human, and it must be terribly painful for you. But markets are set up like this, to drive people away at bottoms. This is just as true as when they draw people in at tops. It’s always the way it goes.

I’m not happy about these markets, but my past experience enables me to still sleep well. However, I can understand those who are not able to. If you give in to selling, you don’t necessarily have to sell everything. The phrase “sell down to your sleeping level” comes foremost to mind.

If it is any consolation, I have been through several such horrible times in my decades of investing. What keeps me from abject pessimism is my belief that the bull market is not over: nothing that happened at the highs of last summer told me anything but that we’d just have a temporary correction. I do know that in the great stretch of time, “temporary” can mean month after month of frustration.

I’ll just leave you with one constant I have noticed: when the pessimism runs the deepest, this is not the time to sell. Just as when the optimism runs the most rampant, it is not the time to buy.

If it is any consolation, I have been through several such horrible times in my decades of investing. What keeps me from abject pessimism is my belief that the bull market is not over: nothing that happened at the highs of last summer told me anything but that we’d just have a temporary correction. I do know that in the great stretch of time, “temporary” can mean month after month of frustration.

I’ll just leave you with one constant I have noticed: when the pessimism runs the deepest, this is not the time to sell. Just as when the optimism runs the most rampant, it is not the time to buy.

One good thing was that even at the worst of the flash crash, the price of gold held above the March lows. This is always a good sign.

​But I know that any words I have will mean nothing to those who are afraid. They just will stay in cash until the prices of metals and miners are much higher. That’s always the way it is. It is the reason most people are not great investors. But then most people are not great doctors, lawyers, or other things. It seems to take a certain group of talents to make one successful at a certain thing. And they are not usually able to be transferred to other avenues of life.

So, I’m keeping this issue short. For those interested, they’ll buy now at great values. For those afraid, nothing I can say will suffice.

So look at the miners, with a view to price to book ration. Anything 3 times and below is a good value. Just to compare, Apple computer is now trading at 57.5 times book value.

​I have been heartened at the number of letters I’ve gotten from readers asking me how much they should take advantage of these bargains. These optimistic letters outnumber the panicked ones by ten to one. I have to say that I have a great group of readers.

The best investments, said Richard Russell, are those you make when everything seems against you, and your stomach is upset about it. These are those times.

How to Check What A Stock’s Price to Book Value Is

  1. Go to yahoo.finance and enter the stock symbol.
  2. Go to “Statistics”
  3. Then go down the list to find price to book value.

Many miners went under a book value of 1 back in March of 2020, at those crash lows. For instance, Ivanhoe Mines was at 0.78 on March 22 of last year. Now it is at nearly 4 times.

You see how high the stock price went during this process.

We’ll be on the lookout for stocks that are 3 times book or less. But prices have bounced off of last week’s lows quite fast, so I’m not sure we’ll get too many great bargains from now on. We can hope, however.

 Truth Vs Delusion

The extraordinary collapse of the ‘official’ Afghan government, propped up by US and Western forces for 20 years, brings to mind something I’ve seen so often these days: How reality has so often be denied by people. It was clear to me that what was being propped up was corrupt and weak. The hubris of the Western leaders in being so certain that the Taliban was no longer a force is especially galling.

Those brave soldiers, like Major Danny Sjursen (look him up), who spoke out and said that they were only building up a house of cards were ignored. It is such a tragedy.

I’m thinking about this also because of a new book I’ve read about the man pictured in the 2002 movie “Catch Me If You Can”. It’s about the con man Frank Abagnale. It turns out that the con man conned everyone. In fact, he was just a low level grifter who only wrote a few checks off of Pan Am, of no more than $1,500. Moreover, his claims to have done so much of this when he was a teenager was completely false:

Even a quick check of the facts show that he spent most of his teenage years in jail. Also, his claims that he never stole from small businesses or individual is also false: that’s mostly who he did steal from.

Over the years, a few good journalists pointed all this out, but they got nowhere. Since the movie came out, he is raking in money speaking and continuing his lies. The galling thing is that most people are content to believe him, when the facts are so easy to find.

The story is well told in “The Greatest Hoax on Earth, Catching Truth, While We Can”. It is by Alan C. Logan and only costs $2.99 on Kindle. I could not put this book down.

The big Media is very much to blame for making this fraud possible. Most recently, Abagnale was at “Talks At Google” making the same old fake news, and no one challenged him. Far from it. The media elites have a lot to answer for.

One Final “Warning”

Analysts hate both SSRM and WPM, our newest recommendation. I am shaking in my boots! (But buying more…)

The Weber Global Opportunities Report Portfolio

Price Updates as of August 15, 2021

What we do when we first buy a stock is to set a Trailing Stop, usually of 25%, but sometimes less. This protects you in case the recommendation falls too much.  In the other extreme, if you are lucky enough to have a stock double, we sell an amount of that stock equal to the money amount you first invested: your principal. Then we hold the rest.

CURRENCIES PORTFOLIO

(Currency prices listed in U.S. cents; bond or note prices listed in local currency)

If you want to buy the U.S. dollar, I recommend keeping your maturities as short as possible,

from 48 hour call to three month Treasury Bills.

SymbolDate Rec.Price Rec.CurrentComment
AUD at a yield

of 1.95%

01/02/201577.5473.34
AustralianDollar

FXA

12/18/201776.6873.34`
Euro

FXE

12/15/2017113.55110.13

GOLD AND SILVER SHARES

Read the recent letters to get my opinion on where we are now.

SymbolDate Rec.Price Rec.CurrentComment
Royal Gold

(Nasdaq: RGLD)

04/15/03$15.39$116.08
Pan American Silver

(Nasdaq: PAAS)

08/01/03$8.55$26.51
SSR Mining Inc

(Nasdaq: SSRM)

02/17/04$14.56$16.31Previously SSRI
Newmont Mining

(NYSE: NEM)

08/01/03$12.64$58.84
Barrick

GOLD (ex ABX)

12/01/2015$9.58$20.27Adjusted for GOLD sale

Has Doubled Since 2015. Sell Half Your Positions

Gold Miners ETF

GDX

12/22/2016$19.07$32.82
Junior Gold Miners ETF GDXJ12/22/2016$28.23$42.85
Franco Nevada

FNV

03/10/2017$61.14$154.88
Metalla Royalty

MTA.V

11/15/2019CD$ 4.08 USD$5.39(CD$9.72)

US$7.82

Wheaton Pres Met

WPM

7/19/202143.1244.46

 

PHYSICAL PRECIOUS METALS

See note on gold and silver stocks.

Mish International, phone 650.324.9110 email robert@mishinternational.com

Gainesville Coins www.gainesvillecoins.comTampa, FL

Texas Precious Metals www.texmetals.com 361-594-3624

Golden Eagle Coins, 3386 Laurel Fort Meade Rd, Laurel, MD 20724, sales@goldeneaglecoin.com

DenominationDate Rec.Price Rec.CurrentComment
Coins: MS64 StGaudens09/15/02$317$2179.89This has been a bullion coin.  We now convert to St.Gaudens MS 64 gold coin
Silver (Physical) or

Silver ETF (SLV)

or SIVR or ZSIL.SW

01/15/04$6.18$25.54
Brit Sov$436.78

HEALTH CARE

 

Symbol

Date Rec.Price Rec.  CurrentComment
DJ US Med Devices

IHI

04/01/201830.84$63.39Newly Split 6:1

OPTIONS

 

Symbol

Date Rec.Price Rec.  CurrentComment
GLD JAN 23 $171

Strike Call

4/9/2021$12.62$10.65
SLV JAN 23 $23

Strike Call

4/1/2021$4.15$2.87
GDX JAN 23 $33

Strike Call

4/1/2021$5.65$4.70
GDXJ JAN 23 $45

Strike Call

4/1/2021$10.10$6.49
WPM JAN 23 $507/30/20216.75$5.36

 

 

Symbol

Date Rec.Price Rec.  CurrentComment
Invesco Commodity

Index DBC

05/14/202118.4119.07

 

Investing in securities underlying in currencies other than the US dollar involved certain considerations comprising both risk and opportunity not typically associated with investing in US securities.  The security may be affected either favorably or unfavorably by fluctuation in the relative rates of exchange between currencies, by exchange control regulations, or by indigenous economic and political developments.  As with any investment, there is no guarantee against potential loss. It should not be assumed that the recommendations made in the future will be profitable or will equal the performance of the securities on this list.