Some people may find it crazy, but I don’t usually look at gold stocks.
You see, I look for the best-of-the-best stocks in the world. And I created an “unbeatable” stock-picking system to find them (more on that below).
These outliers are the 1% of the 1%… that can make you 10x or even 100x your money. They grow earnings, with great profit margins and low debt.
But most precious metals miners take on a lot of debt to operate and pay for equipment. Since they’re highly speculative, my system rarely flags them.
However, under certain circumstances, gold shines. And when it does, gold stocks get a huge tailwind.
For example, from 2008–11, gold prices stormed 166% higher from their 2008 lows. And the average gold stock – as measured by the MVIS Global Junior Gold Miners Index – surged as much as 611% higher.
And currently, since the World Health Organization declared the coronavirus outbreak a pandemic on March 11, gold is up over 5%. Meanwhile, gold miners are up an average of 37%.
Plus, the macro environment looks good for higher gold and gold stock prices right now…
The Federal Reserve has cranked up its printing presses, which is sparking fears of inflation. And investors generally flock to gold when inflation rears its ugly head.
Not to mention, the negative headlines about the pandemic will continue to roil the markets for a while. With this kind of volatility, investors flee to gold for wealth protection.
But as regular readers know, I don’t follow the headlines. Instead, I look at cold, hard data. And today, I’ll tell you what it’s saying about gold…
The Big Money Is Buying
This is where my “unbeatable” stock-picking system comes in. It takes the emotions out of play by focusing on the data.
To make sure it’s highly accurate, comprehensive, and effective, I used my experience from nearly two decades at prestigious Wall Street firms – regularly trading more than $1 billion worth of stock for major clients.
Now, my system scans nearly 5,500 stocks every day, using algorithms to rank each one for strength…
And since the start of the year, it’s signaled lots of big-money buying in the SPDR Gold Shares (GLD) exchange-traded fund (ETF)…
GLD is tied to the price of gold and backed by gold secured in vaults around the world. And as you can see, the big money was plowing into GLD until the massive broad market sell-off in mid-March.
Since then, it’s been scooping up plenty of shares again – especially recently.
That’s led to GLD’s rise from the ashes of the March lows. The ETF has rocketed over 18% higher so far.
But this doesn’t mean the run-up is over yet…
A Good Setup
Over 30 years of data, after a big fall like the one in March, overbought market conditions last for a month on average. And the longest overbought period lasted over three months.
We’re now three weeks in this time. And I fully expect the market will pull back at some point…
But this period could last a while longer, or it could change tomorrow. The key to look for is when the data changes – and so far, it hasn’t.
In all markets – whether oversold or overbought – the big money tends to find its way into leading groups and sectors. So for now, we could be setting up for even higher prices for gold and gold stocks ahead.
Patience and process!
Editor, Palm Beach Insider
P.S. In fact, just yesterday, my system picked its first gold stock for my Palm Beach Trader subscribers to profit from.
It’s a company with growing sales and earnings, hardly any debt, and huge profits. Better yet, the big-money buyers have been piling in. And these are the key ingredients to an outlier.
You won’t want to miss out on the next outlier my system flags, either. So be sure to find out more about it right here.