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Casey's Louis James Warns: 'Don't Try to Time the Market'

Stocks in this article: PVG FSM AG EXK AAU GG

By The Gold Report



NEW YORK ( TheStreet) -- Don't ask Louis James if the gold price has reached bottom. He doesn't care. The senior editor with Casey Research is too busy trying to ferret out those gold miners with a bird in the hand, as he calls it in this interview with  The Gold Report. He travels the world, most recently visiting Ethiopia, looking for companies with an overlooked story, an undervalued mine, an underappreciated grade. While James knows no one can time the market, he is quite certain he has found some good values.

The Gold Report: You warn investors against trying to time the market. If even experts don't know a bottom until it's behind them, how do regular investors know when to invest, when to buy the next tranches, and when to cut losses?

Louis James: The wisdom of not trying to time the market is tried and true. Benjamin Graham said the same thing 60 years ago. I shouldn't have to defend this premise. Even though investors all know it, they fervently wish it weren't so; they just can't help themselves.

You can't time the market. A bureaucrat in Washington can open his mouth and send the price of gold up or down 5% in an afternoon.

Fortunately, we can look for value. Value tends to be slippery in the junior sector when you have a bunch of companies that, as  Doug Casey famously says, are little better than burning matches. They have no income. Even the biggest players in the field are so volatile that Benjamin Graham would never touch them.

However, there are things that we can look for. We can compare companies to their peers. We can look at the ounces in the ground and see if something is out of whack. We can look at cash in the bank. The market is so beat up now that some companies with viable projects are trading for cash or less. It's actually possible in a market this beat up to make relatively low-risk acquisitions.

TGR: You can't really tell when to buy, but you can tell which one to buy. What's the most important factor to look at when picking a stock?

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