by David Kranzler
Investment Research Dynamics
Many junior micro-cap exploration stocks have experienced sharp declines. Low relative liquidity in these names contributes meaningfully to the decline in share-price because for many of these these stocks, most of the trading occurs by the retail shareholder base, which is often 50% or more of the shareholder distribution. When markets get turbulent, the knee-jerk reaction from most less-experienced retail investors is to hit the sell button.
But, assuming the bull-cycle is intact, and I believe it is, this will set-up buy/add opportunities for those of us with “stronger stomachs” for volatility (e.g. Eric Sprott is not selling mining shares – he’s waiting for the much bigger move that’s coming and, if anything, he’s adding to his holdings).
Chris Marcus (Arcadia Economics) and I discuss the elections and the implications that the final outcome will have on the precious metals sector in our weekly podcast: