FSN 3/22:

John: So as we go through these – you're going to see this period where we have these sort of blow offs and pull backs and knowing that the trend is still going to go in a particular direction when you see them, that's time to scoop up more. Just add to your position, sit back, let it go through these things. You don't have to go chasing them.

Jim: Yeah. And that's really what you want to do. You want to accumulate on weakness, and you're getting an opportunity here and I've been pounding the table. I don't know when it's going to be whether it be by summer when the stock markets are taking off and they've cooled down the crisis. Will it be in the fall when gold prices are higher and inflation is higher? But we've been pounding on the table of juniors are the cheapest things out there in relation to the price of gold. And what has happened is there has been a play in the market place that's probably taken place probably last fall, and that is the hedge funds and many of the investment banks have gone long the producers –the big companies: the Barricks, the Newmonts, the Agnico's, the Yamanas, the Goldcorps – and they've gone short the juniors. I mean some of these juniors have had massive short positions, and as they started to go up with this rally that we've seen in metals, the short positions in many cases got even larger.

And for people like ourselves that are wanting to accumulate and especially since we're operating more at the institutional level, I mean we just took one million shares off a short seller in the last week off a company that we've been trying to buy but as volume came in with heavy selling, which was basically the shorts were almost doubling their position, those are a million shares in a tightly controlled company that are now put away in a lock box. I don't know how these guys are going to cover short positions. But you see this all across the board today, and when you're looking at these companies when they are doing that and driving the price down, this is just one area where I think it's gone to extreme levels, John, and it's like the Street is on the wrong side of the trade. Just as they were on the wrong side of the trade with the mortgage-backed securities, and now look at the damage that is being done to these firms; one firm is no longer going to exist as a result.

And that I predict is the day of reckoning coming to a lot of these people that have been going out and shorting because just as the day you and I are talking where the price of gold dropped 60 bucks, you're going to see multiple days on the upside to levels you've never seen before and everybody is going to be scrambling and wanting to go into the sector. And it's like they are going to look at the large cap stocks and they are going to say wait a minute, these are so high priced, what else is cheap out there and that's when this connection is made and that's when money spills over and it trickles down the food chain; and probably the best bargains out there in the food chain are a lot of these juniors. And the nice thing about it, and even for the little guy is they are not selling at 40, $50 a share. They are selling at a dollar a share, $10 a share, $3 a share, 50 cents a share, five bucks and so you could buy 100 shares, you can buy 200 shares, and so here is a chance as these things pull back for you to accumulate, buy in volume and then have the patience as I talked about with Mr. X. That's the story in which legends are made and fortunes are made.

http://financialsense.com/fsn/BP/200...