Gold was all the rage in 2010. However, Wall St. Cheat Sheet’s Gold & Silver expert Jordan Roy-Byrne CMT vastly outperformed sector benchmarks with his acclaimed Gold & Silver Premium Newsletter.
The GSL Portfolio, a diversified portfolio of junior gold and silver companies, finished 2010 up 86.5%. As you can see, the GSL Portfolio did far better than the entire precious metals sector:
How does Jordan do it?
Obviously, it helps to ride the trends, but dealing in high potential resource stocks carries more risk. The following helps us mitigate risks while increasing our chances of finding big winners:
1. Buy Value
We look for companies that, based on their price today, are trading at a discount now or bigger discount 12 months from today. The takeover game is a huge part of the resource business. Quality undervalued companies will not remain so for long.
2. Don’t Chase
Gold and resource stocks can rise substantially in short periods of time. However, they can often fall 25-40% very quickly. We reduce risk by never chasing a company whose share price has appreciated tremendously in recent months. Hence, we try to find stocks that are less vulnerable to a sudden downturn.
3. Fundamental Catalyst
Undervalued resource companies need a catalyst to reach their full value. This can include going into production or announcing new resource estimates. We always evaluate what news is on the horizon and the potential impact on the share price.
4. Technical Catalyst
Resource stocks will typically trade in either an impulsive manner or a long consolidation. We seek to find shares that have very recently broken out from long consolidations or that are trading within a consolidation and have a chance to breakout within weeks.
A Note From Jordan:
I’d like to thank our subscribers for their business and putting their faith in our service. We only have two goals. The first is to make you money in a reasonably prudent and safe manner. The second goal is to provide you an excellent service in advising and covering the Gold and Silver sectors. We know there are many services out there and we thank you for choosing us.
We’d also like to mention our new Commodities Premium Service. If you are interested in our services but a little wary about Gold and Silver, please consider our new service. In Commodities Premium, we provide coverage of numerous commodity sectors including Energy, Agriculture and Metals. We scour these areas to find the best values and the next big winners. Heading into 2011, we are excited as we feel there are tremendous risk-reward opportunities in the energy sector. We will be sharing these in Commodities Premium.
If you are interested in Jordan helping you outperform in 2011, consider a free 14-day trial to one of his two elite investing services:
Cheers to a successful 2011!