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Digging for Opportunity in Precious Metals, Part I

Before you make your decision, let's perform a quick idiot test. One of the most frequent accusations made by the mainstream flock that routinely denounces precious metals is that gold or silver or both are "in a bubble."

Now the idiot test: How can any asset class be "in a bubble" when practically no one is holding it?

Time for a reality check. Each reader can ask themselves this simple question: Do you know any friend/relative/business acquaintance who currently has any significant holding in precious metals? From experience, I can provide the answer to that question for the typical reader.

Their answer would either be "zero" or "one," with some mental notation in brackets beside the one that reads "kook."

Now the second half of the reality check.

During the dot.com bubble, when the same media Chicken Littles and financial management professionals were shouting "buy, buy, buy" right to the bitter end (i.e. implosion), can any reader recall a friend/relative/business associate (invested in the market) who did not have significant holdings in tech stocks?

Our idiot test is completed. When "everyone" is holding an asset class, that is a bubble. When fewer people than ever are holding an asset class, we have the opposite of a bubble - i.e., low tide.

Readers are nearly halfway there in being able to answer the question "why invest in precious metals miners?" You are now aware of the absolute "low tide" that has existed in the precious metals sector throughout this 12-ear "private party" for the tiny contingent of investors who have bought into the best-performing asset class. You're now aware that the tide has receded even further, and what that represents to the Contrarian investor.

Readers know the community of mainstream media scribes and investment professionals to whom they have listened over those 12 years regarding precious metals have been consistently/absolutely wrong with their fear-mongering. Readers also know this same legion of talking heads all fail the simplest of idiot tests: being unable to tell the difference between a "bubble" and the opposite of a bubble.

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