Once In A Lifetime
Mike Hoy
I want to dedicate this article to those who have created the opportunity, for those of us with the foresight, to change our lives forever. I am talking about the people who have created the values that we have in the precious metals sector and the natural resource sector. Never before in my 25+ years of investing have I encountered the values that I see today in the precious metals and natural resource markets. I believe that the writers who have done everything in their power to confuse the investing public that major pullbacks and harsh corrections are inevitable and apt to destroy your whole portfolio, have done absolutely nothing but create, possibly the greatest opportunity in our investing lives. This is the kind of opportunity that comes along only once in awhile and has the potential to financially change our lives forever.

Opportunities like this may be a once in a lifetime occurrence; although in the past we have seen the same type of gains, that I expect the future to return, with the tech sector through the decade of the 90's. The main difference between the tech sector and the natural resource sector and the precious metals stocks is the fact that the tech sector never had a chance to make any money as ongoing business concerns. These stocks never possessed any value and still do not possess value today. I find it very difficult to invest my money in a company whose main product may be obsolete in a couple of years; let alone the fact that the dilution of shares makes it almost impossible for any of them to have a breakout year with earnings. The natural resource and precious metals stocks are just the opposite. These two sectors stand to reap windfall profits as the value of their underlying commodities rise. This is only half of the equation as the other half has to do with expanding price earning ratios. As the value of the underlying commodity rises the earnings will grow significantly and as the public begins to turn their attention to the precious metals sector the stocks will rise proportionately due to the increased demand for the stocks in the sector. We must remember that all the precious metals stocks thrown together in one basket can be purchased for less than a mere $100,000,000,000. This is an insanely small amount of money when one thinks in terms of the total capital that will eventually find its way into this sector. The day will arrive when every corporate tax deferred retirement plan will offer a precious metals fund to their employees. I get such a charge out of the garbage that employers offer to their employees as investment options for their retirement funds today. Very few companies offer an option that will totally protect their employee's funds in the event that a participant elects to have none of his or her funds at risk. Many people have changed jobs just to be able to access their IRA Funds so that they may be able to direct their investments as they chose for the sake of maximizing profits and minimizing losses. Lawsuits will be common, down the road, as a result of the poor and limited choices that employees have to invest their hard earned retirement savings. The shifting of funds to the precious metals sector will be and is inevitable and the ensuing rise in the value of the equities, within the sector, could surprise even the most bullish of bulls. There is no way that the numbers of investors in this sector can do anything but grow. The real kicker is the fact that when the time arrives the precious metals sector is the one sector that historically has set the standard for price appreciation. Many of you may not understand this today but you will gain an understanding in the future. If you think I am kidding then ask yourself a few questions. How many of you have friends, who invest, that think you are totally off the wall for thinking in the manner that you do? How many of you have friends who won't even consider the possibility that gold has a place in their portfolios? How many of you have talked until you are blue in the face trying to make these people listen to what you have to say, without even being able to have a chance to explain to them what you think and why you think the way you do? Do you see what I mean? Each and every one of you know that the majority of our friends and associates have no exposure to the metals at all and no amount of prodding on our part has made any difference in the way they think and believe. Do you begin to see my point? Now go back and think about how and what each of these same individuals were saying and buying back in 1999-00. You could not have a conversation with these people when they did not talk and brag about their technology and .com holdings. The same thing will happen again except this time they won't be buying stock because they are greedy but because they are scared to death of what lies ahead. FEAR will be the motivation behind their future purchases and fear will be the reason that the precious metals sector will again regain the standard for high valuations. Fear is a greater motivator than greed. The time will come when all these people have investments in the precious metals sector and they will be the ones to give us the liquidity to take our profits. I can't wait for the day to come when I hear these people talking about how timely a stock purchase is and I think on how I bought the same stock two years earlier at 1/10th the price.

I gave up trying to help these people a long time ago. The fact that most of these people viewed me as a negative person spewing doom and gloom was enough to convince me that they are bound to repeat the same mistakes again. As much as I would like to help them I cannot. When they come to me and ask for my help down the road I may not be able to help them as I would not want to shelter the blame for their tardiness. It will be at this point in time that my investments will all be trading at many multiples higher and I will not want to be in a position where they will then come back and blame me for their losses because they were way late to the party. I want to spend my time working with people who view me as a source of help rather than a pessimist or a negative person. It is amazing how positive a person, I am, when the topic is one I understand and believe in. If my thinking turns out to be correct then I realize that my circle of friends will change, and the new circle will have a lot of things in common, including successful financial decisions that have allowed them to maintain or dramatically improve their lives.

Ladies and gentlemen, whether you realize it or not this is probably a small glimpse of what our future holds. I have understood this for a long time and I feel that we are very rapidly approaching the point in time when this will become obvious to a whole lot more people. My main concern is being able to secure the future of my family, true friends and myself. I believe that if I am successful, the future of my family and new friends will be much more preferable than the alternatives. I believe that the freedoms you and I have enjoyed and taken for granted are very rapidly disappearing and socialism is rearing its ugly head. It is impossible for the Government to give everyone what they want and desire. It is not the responsibility of the Government to take care of those who sponge off the system. At some point in time, sooner rather than later, an individual will again become responsible for his or her own fate. This may sound cold and callous but that reality is rapidly approaching. When a society fails to understand the error of its ways then the future has only one outcome; change.

Inflation, hyperinflation, deflation and depressions do not happen by accident. All are part of a vicious circle, all could be avoided if the proper measures, were taken, when necessary, to correct or fix the problems as they began to occur. Unfortunately, our politicians have always decided to do what was most popular, to influence future elections rather, than do what was in the best interest of the nation as a whole. The circle exists as a result of the unregulated desire to ride the horse until he drops dead. The saddest part of all this are the true victims that really do need help from the Government that won't be able to get it because of the implosion of the system. These are the true victims who need all the help they can get. One day I will write an article dealing with the abuses I see and the things I would do to change them. This will not be a "feel good article."

Anyone who does not recognize the inevitable end to the devastating financial practices that our Government, financial community and public consumer has practiced for years is blind. I only hope that the day of reckoning can be postponed for another three to five years. This is purely a selfish desire as I want to fully exploit the natural resource opportunities that are available today. I believe common sense coupled with an understanding of the overriding fundamentals are all one needs to recognize that we have an opportunity that may not come around again for a very long time.

If one really has to look at a set of charts in order to eat and breathe in the financial world then I suggest that that individual take a look at the monthly charts. The monthly charts look as bullish as any I have seen in a very long time. I don't understand how anyone can look at these charts and not be totally impressed with the trend in commodities such as gold. How anyone can recommend being out of the metals at this point in time is totally beyond my realm of understanding. I know that the metals took a hit back in April and May; I also know that there were a lot of writers who forecast a major pullback; I believe they brought the correction on themselves; but that is totally irrelevant. The point I am trying to make is the point that I do not recall any of them stepping up to the plate and getting back on board. It does not do any good to sell if you don't have a plan to repurchase. It seems to me that the time to purchase was the exact time that many of them were taking bows for calling for a major pullback; when the reality was a correction. They did not have a pullback that would have justified their recommendations, especially if one factors in the tax consequences of their recommendations; this will become crystal clear to those of you who took profits and now have to pay the tax man. After Uncle Sam gets his pound of flesh you are probably not in a position to buy back the same amount of shares you sold and if you owned the same stocks I own you are most definitely asking yourself why you sold in the first place. Where do they and you get back on board?

Another thing you might think about is the fact that the precious metals sector has been a small growing sector; if one factors in the new players. By this I mean the players within the sector have seen small increases in the numbers of new investors joining the party. The numbers are now growing; I see this in the responses that I receive in my e-mails. Many people identify themselves as new to the industry. What this tells me is; as stocks pulled back last spring the sellers were the believers in the future of the industry. The ones who sold were the same ones who talk about being long term bulls. Investors were told to sell by those who they previously had felt were people who possessed greater knowledge than they believed they possessed themselves. The writers convinced their investors and readers that the risk would destroy their financial futures; as a result the readers felt that had to sell to protect themselves. This is like yelling "fire" in a packed theatre where the movie is the favorite of each of the moviegoers. They didn't want to panic but they did. They didn't want to leave but they did in a hurry! A few of you may have done very well as a result of your trading, this time; will you be so lucky next time? I believe the numbers of successful traders are a very small percentage of the public. You must be able to totally separate yourself from your feelings; this is something I try to do in the first place, but when I see and understand the potential of the companies I own, I do not want to separate my feelings because if I do, I may forget the reasons I bought them in the first place. Human nature also leads us to not buy a company back, at a higher price after we have sold it; a classic example of this is NovaGold NG; this has been my favorite stock for a long time. For those of you who sold your NG; where do you get back on board? As a broker, years ago, I saw this as one of the two most frequent mistakes made by investors; the other was the fact that investors would sell winners to buy losers. Most people fail to understand that, many times, winners are winners and losers are losers for a reason; the reason usually dictates why they go up or down.

As I research companies and do my due diligence I come up with the assessment that many of the companies, I follow, have an opportunity to earn or cash flow to the value that the corporations are trading for in today's market. This is an event that excites me to a point that is difficult to put into words. I am sure that many of you have companies that fall into the same category. When we can sit down and forecast numbers of this nature I then formulate only one conclusion; the companies I follow stand to increase their market values by multiples rather than percentages. Like I have said, these are times when we can actually invest with the belief the investments we make can lead to wealth that we could never hope to achieve by putting in forty hours a week. I truly believe that my life will change in a dramatic way as a result of the investments I have made today. Feeling the way I do about the opportunities I see today; do I fear a downside risk in the stocks I own? Absolutely not, downside is not risk but an opportunity to add to my positions. I have written in the past about the opportunity that weakness presents. For those of you who have read my articles and adopted my thinking, I believe you are financially better off today than you were then. Once an individual has experienced the profit of having the guts and fortitude to step forward and buy when everyone else is selling he will then have a clear understanding of how to truly profit at this game. Once you have purchased a stock on a pullback and immediately seen profits, you will know exactly what I am saying and you will view investments from a different perspective. The most important aspect of this type of investing is that you must first have identified the long term trend. If you have the trend correct then what appears as the absolute worst time to buy is the absolute greatest opportunity you can hope for.

With opportunities of this nature on the table in front of me I do not believe in attempting to try and trade the swings. I know the possibility exists for something to go wrong; in today's world the possibility exists for something to go wrong with any investment you make. The difference is that if I turn out to be right the returns will be counted in multiples not percentages.

As many of you know, I attended the Las Vegas Gold and Precious Metals Investment Conference. This was time and money that was very well spent. I adamantly encourage each and every one of you to take the time and attend one of these conferences when they happen to get to your part of the country. To be able to meet the people behind your investments is an opportunity that you should not miss. If you think that you do not have the time to attend then put yourself into the shoes of management who have taken their time to be available for you. I am sure that there are many of them who would much prefer to be in a different place doing things to enhance the value of their companies for their shareholders. To attend one of these conferences, at no cost to the attendee, is something I have yet to figure out. I suppose that if a charge of $100 per person was imposed, the event would have a problem with finding a facility large enough to facilitate the conference. Don't get me wrong as I felt the turnout was excellent; I just can't seem to understand how all this can be offered for free to the public. I do know the exhibitors are charged an arm and a leg but, I always find it difficult to understand how one can spend $10 to go to a home show or a RV show and the place is packed but to offer the free pass to the precious metals conference is one that truly leaves me speechless. Do you remember what I said about how small our numbers are at this point in time? Do you think free passes will be the standard when John Q Public finally decides he wants to join the party? I don't!

As most of you know, I have been putting an e-mail list together. I plan on fully exploiting the advantages of the internet to take advantage of special situations and keep everyone updated on the specific companies which I follow. If you are not on the list yet you can get on simply by responding to this article. The more I know of your interests the more help I can be. If you are a gold, silver, oil and gas investor let me know. Include phone numbers so I can reach you. If you want to call me and talk personally feel free to call, I am easily accessible. If you are accredited and want to participate in investments for accredited investors, let me know that too. Like I have said, I see greater opportunity today than I have at any time in the past. For those who want to fully exploit the present the time is now. I can be reached at 402-483-4484.

All the best,


Mike Hoy
mhoy@neb.rr.com

17 September 2004