{"id":48256,"date":"2014-03-09T17:03:04","date_gmt":"2014-03-09T21:03:04","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=48256"},"modified":"2014-03-08T17:04:39","modified_gmt":"2014-03-08T22:04:39","slug":"10-baggers-100-baggers-look-like","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2014\/03\/09\/10-baggers-100-baggers-look-like\/","title":{"rendered":"What 10-Baggers (and 100-Baggers) Look Like"},"content":{"rendered":"<h4><span style=\"font-size: small;\">By Jeff Clark, Senior Precious Metals Analyst, Casey Research<br \/>\n<\/span><\/h4>\n<p>Now that it appears clear the bottom is in for gold, it\u2019s time to stop fretting about how low prices will drop and how long the correction will last\u2014and start looking at how high they\u2019ll go and when they\u2019ll get there.<iframe loading=\"lazy\" src=\"http:\/\/trk.caseyresearch.com\/f\/?content_id=765&amp;code=PIP&amp;editorial=what-10-baggers-and-100-baggers-look-like-1\" height=\"1\" width=\"1\" frameborder=\"0\"><\/iframe><\/p>\n<p>When viewing the gold market from a historical perspective, one thing that\u2019s clear is that the junior mining stocks tend to fluctuate between extreme boom and bust cycles. As a group, they\u2019ll double in price, then crash by 75%&#8230; then double or triple or even quadruple again, only to crash 90%. Boom, bust, repeat.<\/p>\n<p>Given that we just completed a major bust cycle\u2014and not just any bust cycle, but one of the harshest on record, according to many veteran insiders\u2014the setup for a major rally in gold stocks is right in front of us.<\/p>\n<p>This may sound sensationalistic, but based on past historical patterns and where we think gold prices are headed, the odds are high that, on average, gold producers will trade in the $200 per share range before the next cycle is over. With most of them currently trading between $20 and $40, the returns could be stupendous. And the percentage returns of the typical junior will be greater by an order of magnitude, providing life-changing gains to smart investors.<\/p>\n<p>What you\u2019re about to see are historical returns of both producers and juniors during <em>three<\/em> separate boom cycles. These are factual returns; they are not hypothetical. And if you accept the fact that this market moves in cycles, you know it\u2019s about to happen again.<\/p>\n<p>Gold had a spectacular climb in 1979-1980, and gold stocks in general gave a staggering performance at that time\u2014many of them becoming 10-baggers (1,000% gains and more). While this is a well-known fact, few researchers have bothered to identify exact returns from specific companies during this era.<\/p>\n<p>Digging up hard data from before the mid-1980s, especially for the junior explorers, is difficult because the information wasn\u2019t computerized at the time. So I sent my nephew Grant to the library to view the <em>Wall Street Journal<\/em> on microfiche. We also include information we\u2019ve had from Scott Hunter of Haywood Securities; Larry Page, then-president of the Manex Resource Group; and the dusty archives at the <em>Northern Miner<\/em>.<\/p>\n<p>Note: This means our tables, while accurate, are not at all comprehensive.<\/p>\n<p>Let\u2019s get started\u2026<\/p>\n<h3><strong>The Quintessential Bull Market: 1979-1980<\/strong><\/h3>\n<p style=\"margin-top: 10px;\">The granddaddy of gold bull cycles occurred during the 1970s, culminating in an unabashed mania in 1979 and 1980. Gold peaked at $850 an ounce on January 21, 1980, a rise of 276% from the beginning of 1979. (Yes, the price of gold on the last trading day of 1978 was a mere $226 an ounce.)<\/p>\n<p>Here\u2019s a sampling of gold producer stock prices from this era. What you\u2019ll notice in addition to the amazing returns is that gold stocks didn\u2019t peak until nine months <strong>after<\/strong> gold did.<\/p>\n<div align=\"center\">\n<table style=\"border-bottom: 3px solid #F17C14; font-family: Arial; font-size: 13px; line-height: 15px;\" border=\"0\" cellspacing=\"1\" cellpadding=\"4\">\n<tbody>\n<tr style=\"color: #fff; font-size: 16px; line-height: 17px;\" align=\"center\" bgcolor=\"#000000\">\n<td colspan=\"4\" valign=\"bottom\" nowrap=\"nowrap\"><strong>Returns of Producers in 1979-1980 Mania<\/strong><\/td>\n<\/tr>\n<tr style=\"color: #fff; border-bottom: 3px solid #F17C14; font-weight: bold;\" align=\"center\" valign=\"bottom\" bgcolor=\"#F17C14\">\n<td><strong>Company<\/strong><\/td>\n<td><strong>Price on<br \/>\n12\/29\/1978<\/strong><\/td>\n<td><strong>Sept. 1980<br \/>\nPeak<\/strong><\/td>\n<td><strong>Return<\/strong><\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Campbell Lake Mines<\/td>\n<td align=\"center\" valign=\"top\">$28.25<\/td>\n<td align=\"center\" valign=\"top\">$94.75<\/td>\n<td align=\"center\">235.4%<\/td>\n<\/tr>\n<tr bgcolor=\"#E2E2E2\">\n<td valign=\"top\">Dome Mines<\/td>\n<td align=\"center\" valign=\"top\">$78.25<\/td>\n<td align=\"center\" valign=\"top\">$154.00<\/td>\n<td align=\"center\">96.8%<\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Hecla Mining<\/td>\n<td align=\"center\" valign=\"top\">$5.12<\/td>\n<td align=\"center\" valign=\"top\">$53.00<\/td>\n<td align=\"center\">935.2%<\/td>\n<\/tr>\n<tr bgcolor=\"#E2E2E2\">\n<td valign=\"top\">Homestake Mining<\/td>\n<td align=\"center\" valign=\"top\">$30.00<\/td>\n<td align=\"center\" valign=\"top\">$107.50<\/td>\n<td align=\"center\">258.3%<\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Newmont Mining<\/td>\n<td align=\"center\" valign=\"top\">$21.50<\/td>\n<td align=\"center\" valign=\"top\">$60.62<\/td>\n<td align=\"center\">182.0%<\/td>\n<\/tr>\n<tr bgcolor=\"#E2E2E2\">\n<td valign=\"top\">Dickinson Mines<\/td>\n<td align=\"center\" valign=\"top\">$6.88<\/td>\n<td align=\"center\" valign=\"top\">$27.50<\/td>\n<td align=\"center\">299.7%<\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Sigma Mines<\/td>\n<td align=\"center\" valign=\"top\">$36.00<\/td>\n<td align=\"center\" valign=\"top\">$57.00<\/td>\n<td align=\"center\">58.3%<\/td>\n<\/tr>\n<tr bgcolor=\"#E2E2E2\">\n<td valign=\"top\">Giant Yellowknife Mines<\/td>\n<td align=\"center\" valign=\"top\">$11.13<\/td>\n<td align=\"center\" valign=\"top\">$39.00<\/td>\n<td align=\"center\">250.4%<\/td>\n<\/tr>\n<tr style=\"3px solid #f17c14;font-weight: bold;\" bgcolor=\"#F2F2F2\">\n<td valign=\"top\"><strong>AVERAGE<\/strong><\/td>\n<td valign=\"top\"><strong>\u00a0<\/strong><\/td>\n<td valign=\"top\"><strong>\u00a0<\/strong><\/td>\n<td align=\"center\"><strong>289.5%<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>&nbsp;<\/p>\n<p>Today, GDX is selling for $26.05 (as of February 26, 2014); if it mimicked the average 289.5% return, the price would reach $101.46.<\/p>\n<p>&nbsp;<\/p>\n<p>Keep in mind, though, that our data measures the exact top of each company\u2019s price. Most investors, of course, don\u2019t sell at the very peak. If we were to able to grab, say, 80% of the climb, that\u2019s still a return of 231.6%.<\/p>\n<p>Here\u2019s a sampling of how some successful junior gold stocks performed in the same period, along with the month each of them peaked.<\/p>\n<div align=\"center\">\n<table style=\"border-bottom: 3px solid #F17C14; font-family: Arial; font-size: 13px; line-height: 15px;\" border=\"0\" cellspacing=\"1\" cellpadding=\"4\">\n<tbody>\n<tr style=\"color: #fff; font-size: 16px; line-height: 17px;\" align=\"center\" bgcolor=\"#000000\">\n<td colspan=\"5\" valign=\"bottom\" nowrap=\"nowrap\"><strong>Returns of Juniors in 1979-1980 Mania<\/strong><\/td>\n<\/tr>\n<tr style=\"color: #fff; border-bottom: 3px solid #F17C14; font-weight: bold;\" align=\"center\" valign=\"bottom\" bgcolor=\"#F17C14\">\n<td><strong>Company<\/strong><\/td>\n<td><strong>Price on<br \/>\n12\/29\/1978<\/strong><\/td>\n<td><strong>Price<br \/>\nPeak<\/strong><\/td>\n<td><strong>Date<br \/>\nof Peak<\/strong><\/td>\n<td><strong>Return<\/strong><\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Carolin Mines<\/td>\n<td align=\"center\" valign=\"top\">$3.10<\/td>\n<td align=\"center\" valign=\"top\">$57.00<\/td>\n<td align=\"center\">Oct. 80<\/td>\n<td align=\"center\">1,738.7%<\/td>\n<\/tr>\n<tr bgcolor=\"#E2E2E2\">\n<td valign=\"top\">Mosquito Creek Gold<\/td>\n<td align=\"center\" valign=\"top\">$0.70<\/td>\n<td align=\"center\" valign=\"top\">$7.50<\/td>\n<td align=\"center\">Oct. 80<\/td>\n<td align=\"center\">971.4%<\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Northair Mines<\/td>\n<td align=\"center\" valign=\"top\">$3.00<\/td>\n<td align=\"center\" valign=\"top\">$10.00<\/td>\n<td align=\"center\">Oct. 80<\/td>\n<td align=\"center\">233.3%<\/td>\n<\/tr>\n<tr bgcolor=\"#E2E2E2\">\n<td valign=\"top\">Silver Standard<\/td>\n<td align=\"center\" valign=\"top\">$0.58<\/td>\n<td align=\"center\" valign=\"top\">$2.51<\/td>\n<td align=\"center\">Mar. 80<\/td>\n<td align=\"center\">332.8%<\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Lincoln Resources<\/td>\n<td align=\"center\" valign=\"top\">$0.78<\/td>\n<td align=\"center\" valign=\"top\">$20.00<\/td>\n<td align=\"center\">Oct. 80<\/td>\n<td align=\"center\">2,464.1%<\/td>\n<\/tr>\n<tr bgcolor=\"#E2E2E2\">\n<td valign=\"top\">Lornex<\/td>\n<td align=\"center\" valign=\"top\">$15.00<\/td>\n<td align=\"center\" valign=\"top\">$85.00<\/td>\n<td align=\"center\">Oct. 80<\/td>\n<td align=\"center\">466.7%<\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Imperial Metals<\/td>\n<td align=\"center\" valign=\"top\">$0.36<\/td>\n<td align=\"center\" valign=\"top\">$1.95<\/td>\n<td align=\"center\">Mar. 80<\/td>\n<td align=\"center\">441.7%<\/td>\n<\/tr>\n<tr bgcolor=\"#E2E2E2\">\n<td valign=\"top\">Anglo-Bomarc Mines<\/td>\n<td align=\"center\" valign=\"top\">$1.80<\/td>\n<td align=\"center\" valign=\"top\">$6.85<\/td>\n<td align=\"center\">Oct. 80<\/td>\n<td align=\"center\">280.6%<\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Avino Mines<\/td>\n<td align=\"center\" valign=\"top\">0.33<\/td>\n<td align=\"center\" valign=\"top\">5.5<\/td>\n<td align=\"center\">Dec. 80<\/td>\n<td align=\"center\">1,566.7%<\/td>\n<\/tr>\n<tr bgcolor=\"#E2E2E2\">\n<td valign=\"top\">Copper Lake<\/td>\n<td align=\"center\" valign=\"top\">$0.08<\/td>\n<td align=\"center\" valign=\"top\">$10.50<\/td>\n<td align=\"center\">Sep. 80<\/td>\n<td align=\"center\">13,025.0%<\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">David Minerals<\/td>\n<td align=\"center\" valign=\"top\">$1.15<\/td>\n<td align=\"center\" valign=\"top\">$21.00<\/td>\n<td align=\"center\">Oct. 80<\/td>\n<td align=\"center\">1,726.1%<\/td>\n<\/tr>\n<tr bgcolor=\"#E2E2E2\">\n<td valign=\"top\">Eagle River Mines<\/td>\n<td align=\"center\" valign=\"top\">$0.19<\/td>\n<td align=\"center\" valign=\"top\">$6.80<\/td>\n<td align=\"center\">Dec. 80<\/td>\n<td align=\"center\">3,478.9%<\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Meston Lake Resources<\/td>\n<td align=\"center\" valign=\"top\">$0.80<\/td>\n<td align=\"center\" valign=\"top\">$10.50<\/td>\n<td align=\"center\">Oct. 80<\/td>\n<td align=\"center\">1,212.5%<\/td>\n<\/tr>\n<tr bgcolor=\"#E2E2E2\">\n<td valign=\"top\">Silverado Mines<\/td>\n<td align=\"center\" valign=\"top\">$0.26<\/td>\n<td align=\"center\" valign=\"top\">$10.63<\/td>\n<td align=\"center\">Oct. 80<\/td>\n<td align=\"center\">3,988.5%<\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Wharf Resources<\/td>\n<td align=\"center\" valign=\"top\">$0.33<\/td>\n<td align=\"center\" valign=\"top\">$9.50<\/td>\n<td align=\"center\">Nov. 80<\/td>\n<td align=\"center\">2,778.8%<\/td>\n<\/tr>\n<tr style=\"3px solid #f17c14;font-weight: bold;\" bgcolor=\"#F2F2F2\">\n<td valign=\"top\"><strong>AVERAGE<\/strong><\/td>\n<td align=\"center\" valign=\"top\"><strong>\u00a0<\/strong><\/td>\n<td align=\"center\" valign=\"top\"><strong>\u00a0<\/strong><\/td>\n<td align=\"center\"><strong>\u00a0<\/strong><\/td>\n<td align=\"center\"><strong>2,313.7%<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>&nbsp;<\/p>\n<p>If you had bought a reasonably diversified portfolio of top-performing gold juniors prior to 1979, your initial investment could have grown 23 times in just two years. If you had managed to grab 80% of that move, your gains would still have been over 1,850%.<\/p>\n<p>&nbsp;<\/p>\n<p>This means a junior priced at $0.50 today that captured the average gain from this boom would sell for $12 at the top, or $9.75 at 80%. If you own ten juniors, imagine just one of them matching Copper Lake\u2019s better than 100-bagger performance.<\/p>\n<p>Here\u2019s what returns of this magnitude could mean to you. Let\u2019s say your portfolio includes $10,000 in gold juniors that yield spectacular gains such as the above. If the next boom cycle matches the 1979-1980 pattern, your portfolio could be worth $241,370 at its peak\u2026 or about $195,000 if you exit at 80% of the top prices.<\/p>\n<p>Note that this does require that you <strong>sell<\/strong> to realize your profits. If you don\u2019t take the money and run at some point, you may end up with little more than tears to fill an empty beer mug. In the subsequent bust cycle, many junior gold stocks, including some in the above list, dried up and blew away. Investors who held on to the bitter end not only saw all their gains evaporate, but lost their entire investments.<\/p>\n<p>You have to play the cycle.<\/p>\n<p>Returns from that era have been written about before, so I can hear some investors saying, \u201cYeah, but that only happened once.\u201d<\/p>\n<p><em>Au contraire<\/em>. Read on\u2026<\/p>\n<h3><strong>The Hemlo Rally of 1981-1983<\/strong><\/h3>\n<p style=\"margin-top: 10px;\">Many investors don\u2019t know that there have been several bull cycles in gold and gold stocks since the 1979-1980 period.<\/p>\n<p>Ironically, gold was flat during the two years of the Hemlo rally. But something else ignited a bull market. <strong>Discovery<\/strong><em>.<\/em> Here\u2019s how it happened\u2026<\/p>\n<p>Back in the day, most exploration was done by teams from the major producers. But because of lagging gold prices and the resulting need to cut overhead, they began to slash their exploration budgets, unleashing a swarm of experienced geologists armed with the knowledge of high-potential mineral targets they\u2019d explored while working for the majors. Many formed their own companies and went after these targets.<\/p>\n<p>This led to a series of spectacular discoveries, the first of which occurred in mid-1982, when Golden Sceptre and Goliath Gold discovered the Golden Giant deposit in the Hemlo area of eastern Canada. Gold prices rallied that summer, setting off a mini bull market that lasted until the following May. The public got involved, and as you can see, the results were impressive for such a short period of time.<\/p>\n<div align=\"center\">\n<table style=\"border-bottom: 3px solid #F17C14; font-family: Arial; font-size: 13px; line-height: 15px;\" border=\"0\" cellspacing=\"1\" cellpadding=\"4\">\n<tbody>\n<tr style=\"color: #fff; font-size: 16px; line-height: 17px;\" align=\"center\" bgcolor=\"#000000\">\n<td colspan=\"5\" valign=\"bottom\" nowrap=\"nowrap\"><strong>Returns of Producers Related to Hemlo Rally of 1981-1983<\/strong><\/td>\n<\/tr>\n<tr style=\"color: #fff; border-bottom: 3px solid #F17C14; font-weight: bold;\" align=\"center\" valign=\"bottom\" bgcolor=\"#F17C14\">\n<td nowrap=\"nowrap\"><strong>Company<\/strong><\/td>\n<td nowrap=\"nowrap\"><strong>1981<br \/>\nPrice<\/strong><\/td>\n<td><strong>Price<br \/>\nPeak<\/strong><\/td>\n<td><strong>Date<br \/>\nof High<\/strong><\/td>\n<td><strong>Return<\/strong><\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Agnico-Eagle<\/td>\n<td align=\"center\">$9.50<\/td>\n<td align=\"center\">$21.00<\/td>\n<td align=\"center\">Aug. 83<\/td>\n<td align=\"center\">121.1%<\/td>\n<\/tr>\n<tr bgcolor=\"#E2E2E2\">\n<td valign=\"top\">Sigma<\/td>\n<td align=\"center\">$14.13<\/td>\n<td align=\"center\">$24.50<\/td>\n<td align=\"center\">Jan. 83<\/td>\n<td align=\"center\">73.4%<\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Campbell Red Lake<\/td>\n<td align=\"center\">$16.63<\/td>\n<td align=\"center\">$41.25<\/td>\n<td align=\"center\">May 83<\/td>\n<td align=\"center\">148.0%<\/td>\n<\/tr>\n<tr bgcolor=\"#E2E2E2\">\n<td valign=\"top\">Sullivan<\/td>\n<td align=\"center\">$3.85<\/td>\n<td align=\"center\">$6.00<\/td>\n<td align=\"center\">Mar. 84<\/td>\n<td align=\"center\">55.8%<\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Teck Corp Class B<\/td>\n<td align=\"center\">$17.00<\/td>\n<td align=\"center\">$21.88<\/td>\n<td align=\"center\">Jun. 81<\/td>\n<td align=\"center\">28.7%<\/td>\n<\/tr>\n<tr bgcolor=\"#E2E2E2\">\n<td valign=\"top\">Noranda<\/td>\n<td align=\"center\">$33.75<\/td>\n<td align=\"center\">$36.38<\/td>\n<td align=\"center\">Jun. 81<\/td>\n<td align=\"center\">7.8%<\/td>\n<\/tr>\n<tr style=\"3px solid #f17c14;font-weight: bold;\" bgcolor=\"#F2F2F2\">\n<td valign=\"top\"><strong>AVERAGE<\/strong><\/td>\n<td align=\"center\"><strong>\u00a0<\/strong><\/td>\n<td align=\"center\"><strong>\u00a0<\/strong><\/td>\n<td align=\"center\"><strong>\u00a0<\/strong><\/td>\n<td align=\"center\"><strong>72.5%<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>&nbsp;<\/p>\n<p>Gold producers, on average, returned over 70% on investors\u2019 money during this period. While these aren\u2019t the same spectacular gains from just a few years earlier, keep in mind they occurred over only about 12 months\u2019 time. This would be akin to a $20 gold stock soaring to $34.50 by this time next year, just because it\u2019s located in a significant discovery area.<\/p>\n<p>&nbsp;<\/p>\n<p>Once again, it was the juniors that brought the dazzling returns.<\/p>\n<div align=\"center\">\n<table style=\"border-bottom: 3px solid #F17C14; font-family: Arial; font-size: 13px; line-height: 15px;\" border=\"0\" cellspacing=\"1\" cellpadding=\"4\">\n<tbody>\n<tr style=\"color: #fff; font-size: 16px; line-height: 17px;\" align=\"center\" bgcolor=\"#000000\">\n<td colspan=\"5\" valign=\"bottom\" nowrap=\"nowrap\"><strong>Returns of Juniors Related to Hemlo Rally of 1981-1983<\/strong><\/td>\n<\/tr>\n<tr style=\"color: #fff; border-bottom: 3px solid #F17C14; font-weight: bold;\" align=\"center\" valign=\"bottom\" bgcolor=\"#F17C14\">\n<td nowrap=\"nowrap\"><strong>Company<\/strong><\/td>\n<td nowrap=\"nowrap\"><strong>1981<br \/>\nPrice<\/strong><\/td>\n<td><strong>Price<br \/>\nPeak<\/strong><\/td>\n<td><strong>Date<br \/>\nof High<\/strong><\/td>\n<td><strong>Return<\/strong><\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Corona Resources<\/td>\n<td align=\"center\">$1.10<\/td>\n<td align=\"center\">$61.00<\/td>\n<td align=\"center\">May 83<\/td>\n<td align=\"center\">5,445.5%<\/td>\n<\/tr>\n<tr bgcolor=\"#E2E2E2\">\n<td valign=\"top\">Golden Sceptre<\/td>\n<td align=\"center\">$0.40<\/td>\n<td align=\"center\">$31.00<\/td>\n<td align=\"center\">May 83<\/td>\n<td align=\"center\">7,650.0%<\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Goliath Gold<\/td>\n<td align=\"center\">$0.45<\/td>\n<td align=\"center\">$32.00<\/td>\n<td align=\"center\">Mar 83<\/td>\n<td align=\"center\">7,011.1%<\/td>\n<\/tr>\n<tr bgcolor=\"#E2E2E2\">\n<td valign=\"top\">Bel-Air Resources<\/td>\n<td align=\"center\">$0.81<\/td>\n<td align=\"center\">$1.60<\/td>\n<td align=\"center\">Jan. 83<\/td>\n<td align=\"center\">97.5%<\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Interlake Development<\/td>\n<td align=\"center\">$2.10<\/td>\n<td align=\"center\">$6.40<\/td>\n<td align=\"center\">Mar. 83<\/td>\n<td align=\"center\">204.8%<\/td>\n<\/tr>\n<tr style=\"3px solid #f17c14;font-weight: bold;\" bgcolor=\"#F2F2F2\">\n<td valign=\"top\"><strong>AVERAGE<\/strong><\/td>\n<td align=\"center\"><strong>\u00a0<\/strong><\/td>\n<td align=\"center\"><strong>\u00a0<\/strong><\/td>\n<td align=\"center\"><strong>\u00a0<\/strong><\/td>\n<td align=\"center\"><strong>4,081.8%<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>&nbsp;<\/p>\n<p>The average return for these junior gold stocks that had a direct interest in the Hemlo area exceeded a whopping 4,000%.<\/p>\n<p>&nbsp;<\/p>\n<p>This is especially impressive when you realize that it occurred without the gold stock industry as a whole participating. This tells us that a big discovery can lead to enormous gains, even if the industry as a whole is flat.<\/p>\n<p>In other words, we have historical precedence that humongous returns are possible <strong>without<\/strong> a mania, by owning stocks with direct exposure to a discovery area. There are numerous examples of this in the past ten years, as any longtime reader of the <a href=\"http:\/\/www.caseyresearch.com\/go\/vw34n-2\/PIP\" target=\"_blank\"><em>International Speculator<\/em><\/a> can attest.<\/p>\n<p>By May 1983, roughly a year after it started, gold prices started back down again, spelling the end of that cycle\u2014another reminder that one must sell to realize a profit.<\/p>\n<h3><strong>The Roaring \u201990s<\/strong><\/h3>\n<p style=\"margin-top: 10px;\">By the time the \u201990s rolled around, many junior exploration companies had acquired the \u201cintellectual capital\u201d they needed from the majors. Another series of gold discoveries in the mid-1990s set off one of the most stunning bull markets in the current generation.<\/p>\n<p>Companies with big discoveries included Diamet, Diamond Fields, and Arequipa. This was also the time of the famous Bre-X scandal, a company that appeared to have made a stupendous discovery, but that was later found to have been \u201csalting\u201d its drill data (cheating).<\/p>\n<p>By the summer of \u201996, these discoveries had sparked another bull cycle, and companies with little more than a few drill holes were selling for $20 a share.<\/p>\n<p>The table below, which includes some of the better-known names of the day, is worth the proverbial thousand words. The average producer more than tripled investors\u2019 money during this period. Once again, these gains occurred in a relatively short period of time, in this case inside of two years.<\/p>\n<div align=\"center\">\n<table style=\"border-bottom: 3px solid #F17C14; font-family: Arial; font-size: 13px; line-height: 15px;\" border=\"0\" cellspacing=\"1\" cellpadding=\"4\">\n<tbody>\n<tr style=\"color: #fff; font-size: 16px; line-height: 17px;\" align=\"center\" bgcolor=\"#000000\">\n<td colspan=\"5\" valign=\"bottom\" nowrap=\"nowrap\"><strong>Returns of Producers in Mid-1990s Bull Market<\/strong><\/td>\n<\/tr>\n<tr style=\"color: #fff; border-bottom: 3px solid #F17C14; font-weight: bold;\" align=\"center\" valign=\"bottom\" bgcolor=\"#F17C14\">\n<td><strong>Company<\/strong><\/td>\n<td><strong>Pre-Bull<br \/>\nMarket Price<\/strong><\/td>\n<td><strong>Price<br \/>\nPeak<\/strong><\/td>\n<td><strong>Date<br \/>\nof High<\/strong><\/td>\n<td><strong>Return<\/strong><\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Kinross Gold<\/td>\n<td align=\"center\">$5.00<\/td>\n<td align=\"center\">$14.62<\/td>\n<td align=\"center\">Feb. 96<\/td>\n<td align=\"center\">192.4%<\/td>\n<\/tr>\n<tr bgcolor=\"#E2E2E2\">\n<td valign=\"top\">American Barrick<\/td>\n<td align=\"center\">$28.13<\/td>\n<td align=\"center\">$44.25<\/td>\n<td align=\"center\">Feb. 96<\/td>\n<td align=\"center\">57.3%<\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Placer Dome<\/td>\n<td align=\"center\">$26.50<\/td>\n<td align=\"center\">$41.37<\/td>\n<td align=\"center\">Feb. 96<\/td>\n<td align=\"center\">56.1%<\/td>\n<\/tr>\n<tr bgcolor=\"#E2E2E2\">\n<td valign=\"top\">Newmont<\/td>\n<td align=\"center\">$47.26<\/td>\n<td align=\"center\">$82.46<\/td>\n<td align=\"center\">Feb. 96<\/td>\n<td align=\"center\">74.5%<\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Manhattan<\/td>\n<td align=\"center\">$1.50<\/td>\n<td align=\"center\">$13.00<\/td>\n<td align=\"center\">Nov. 96<\/td>\n<td align=\"center\">766.7%<\/td>\n<\/tr>\n<tr bgcolor=\"#E2E2E2\">\n<td valign=\"top\">Cambior<\/td>\n<td align=\"center\">$10.00<\/td>\n<td align=\"center\">$22.35<\/td>\n<td align=\"center\">Jun. 96<\/td>\n<td align=\"center\">123.5%<\/td>\n<\/tr>\n<tr style=\"3px solid #f17c14;font-weight: bold;\" bgcolor=\"#F2F2F2\">\n<td valign=\"top\"><strong>AVERAGE<\/strong><\/td>\n<td align=\"center\"><strong>\u00a0<\/strong><\/td>\n<td align=\"center\"><strong>\u00a0<\/strong><\/td>\n<td align=\"center\"><strong>\u00a0<\/strong><\/td>\n<td align=\"center\"><strong>211.7%<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>&nbsp;<\/p>\n<p>Here\u2019s how some of the juniors performed. And if you\u2019re the kind of investor with the courage to buy low and the discipline to sell during a frenzy, it can be worth a million dollars. Hold on to your hat.<\/p>\n<p>&nbsp;<\/p>\n<div align=\"center\">\n<table style=\"border-bottom: 3px solid #F17C14; font-family: Arial; font-size: 13px; line-height: 15px;\" border=\"0\" cellspacing=\"1\" cellpadding=\"4\">\n<tbody>\n<tr style=\"color: #fff; font-size: 16px; line-height: 17px;\" align=\"center\" bgcolor=\"#000000\">\n<td colspan=\"5\" valign=\"bottom\" nowrap=\"nowrap\"><strong>Returns of Juniors in Mid-1990s Bull Market<\/strong><\/td>\n<\/tr>\n<tr style=\"color: #fff; border-bottom: 3px solid #F17C14; font-weight: bold;\" align=\"center\" valign=\"bottom\" bgcolor=\"#F17C14\">\n<td><strong>Company<\/strong><\/td>\n<td><strong>Pre-Bull<br \/>\nMarket Price<\/strong><\/td>\n<td><strong>Price<br \/>\nPeak<\/strong><\/td>\n<td><strong>Date<br \/>\nof High<\/strong><\/td>\n<td><strong>Return<\/strong><\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Cartaway<\/td>\n<td align=\"center\">$0.10<\/td>\n<td align=\"center\">$26.14<\/td>\n<td align=\"center\">May 96<\/td>\n<td align=\"center\">26,040.0%<\/td>\n<\/tr>\n<tr bgcolor=\"#E2E2E2\">\n<td valign=\"top\">Golden Star<\/td>\n<td align=\"center\">$6.00<\/td>\n<td align=\"center\">$27.50<\/td>\n<td align=\"center\">Oct. 96<\/td>\n<td align=\"center\">358.3%<\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Samex Mining<\/td>\n<td align=\"center\">$1.00<\/td>\n<td align=\"center\">$7.20<\/td>\n<td align=\"center\">May 96<\/td>\n<td align=\"center\">620.0%<\/td>\n<\/tr>\n<tr bgcolor=\"#E2E2E2\">\n<td valign=\"top\">Pacific Amber<\/td>\n<td align=\"center\">$0.21<\/td>\n<td align=\"center\">$9.40<\/td>\n<td align=\"center\">Aug. 96<\/td>\n<td align=\"center\">4,376.2%<\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Conquistador<\/td>\n<td align=\"center\">$0.50<\/td>\n<td align=\"center\">$9.87<\/td>\n<td align=\"center\">Mar. 96<strong> <\/strong><\/td>\n<td align=\"center\">1,874.0%<\/td>\n<\/tr>\n<tr bgcolor=\"#E2E2E2\">\n<td valign=\"top\">Corriente<\/td>\n<td align=\"center\">$1.00<\/td>\n<td align=\"center\">$19.50<\/td>\n<td align=\"center\">Mar. 97<\/td>\n<td align=\"center\">1,850.0%<\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Valerie Gold<\/td>\n<td align=\"center\">$1.50<\/td>\n<td align=\"center\">$28.90<\/td>\n<td align=\"center\">May 96<\/td>\n<td align=\"center\">1,826.7%<\/td>\n<\/tr>\n<tr bgcolor=\"#E2E2E2\">\n<td valign=\"top\">Arequipa<\/td>\n<td align=\"center\">$0.60<\/td>\n<td align=\"center\">$34.75<\/td>\n<td align=\"center\">May 96<\/td>\n<td align=\"center\">5,691.7%<\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Bema Gold<\/td>\n<td align=\"center\">$2.00<\/td>\n<td align=\"center\">$12.75<\/td>\n<td align=\"center\">Aug. 96<\/td>\n<td align=\"center\">537.5%<\/td>\n<\/tr>\n<tr bgcolor=\"#E2E2E2\">\n<td valign=\"top\">Farallon<\/td>\n<td align=\"center\">$0.80<\/td>\n<td align=\"center\">$20.25<\/td>\n<td align=\"center\">May 96<\/td>\n<td align=\"center\">2,431.3%<\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Arizona Star<\/td>\n<td align=\"center\">$0.50<\/td>\n<td align=\"center\">$15.95<\/td>\n<td align=\"center\">Aug. 96<\/td>\n<td align=\"center\">3,090.0%<\/td>\n<\/tr>\n<tr bgcolor=\"#E2E2E2\">\n<td valign=\"top\">Cream Minerals<\/td>\n<td align=\"center\">$0.30<\/td>\n<td align=\"center\">$9.45<\/td>\n<td align=\"center\">May 96<\/td>\n<td align=\"center\">3,050.0%<\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Francisco Gold<\/td>\n<td align=\"center\">$1.00<\/td>\n<td align=\"center\">$34.50<\/td>\n<td align=\"center\">Mar. 97<\/td>\n<td align=\"center\">3,350.0%<\/td>\n<\/tr>\n<tr bgcolor=\"#E2E2E2\">\n<td valign=\"top\">Mansfield<\/td>\n<td align=\"center\">$0.70<\/td>\n<td align=\"center\">$10.50<\/td>\n<td align=\"center\">Aug. 96<\/td>\n<td align=\"center\">1,400.0%<\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\">Oliver Gold<\/td>\n<td align=\"center\">$0.40<\/td>\n<td align=\"center\">$6.80<\/td>\n<td align=\"center\">Oct. 96<\/td>\n<td align=\"center\">1,600.0%<\/td>\n<\/tr>\n<tr style=\"3px solid #f17c14;font-weight: bold;\" bgcolor=\"#F2F2F2\">\n<td valign=\"top\"><strong>AVERAGE<\/strong><\/td>\n<td align=\"center\"><strong>\u00a0<\/strong><\/td>\n<td align=\"center\"><strong>\u00a0<\/strong><\/td>\n<td align=\"center\"><strong>\u00a0<\/strong><\/td>\n<td align=\"center\"><strong>3,873.0%<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>&nbsp;<\/p>\n<p>Many analysts refer to the 1970s bull market as the granddaddy of them all\u2014and to a certain extent it was\u2014but you\u2019ll notice that the average return of these stocks during the late \u201990s bull exceeds what the juniors did in the 1979-1980 boom.<\/p>\n<p>&nbsp;<\/p>\n<p>This is akin to that $0.50 junior stock today reaching $19.86\u2026 or $16, if you snag 80% of the move. A $10,000 portfolio with similar returns would grow to over $397,000 (or over $319,000 on 80%).<\/p>\n<h3><strong>Gold Stocks and Depression<\/strong><\/h3>\n<p style=\"margin-top: 10px;\">Those of you in the deflation camp may dismiss all this because you\u2019re convinced the Great Deflation is ahead. Fair enough. But you\u2019d be wrong to assume gold stocks can\u2019t do well in that environment.<\/p>\n<p>Take a look at the returns of the two largest producers in the US and Canada, respectively, during the Great Depression of the 1930s, a period that saw significant price deflation.<\/p>\n<div align=\"center\">\n<table style=\"border-bottom: 3px solid #F17C14; font-family: Arial; font-size: 13px; line-height: 15px;\" border=\"0\" cellspacing=\"1\" cellpadding=\"4\">\n<tbody>\n<tr style=\"color: #fff; font-size: 16px; line-height: 17px;\" align=\"center\" bgcolor=\"#000000\">\n<td colspan=\"4\" valign=\"bottom\" nowrap=\"nowrap\"><strong>Returns of Producers <\/strong><br \/>\n<strong>During the Great Depression<\/strong><\/td>\n<\/tr>\n<tr style=\"color: #fff; border-bottom: 3px solid #F17C14; font-weight: bold;\" align=\"center\" valign=\"bottom\" bgcolor=\"#F17C14\">\n<td nowrap=\"nowrap\"><strong>Company<\/strong><\/td>\n<td nowrap=\"nowrap\"><strong>1929<br \/>\nPrice<\/strong><\/td>\n<td><strong>1933<br \/>\nPrice<\/strong><\/td>\n<td><strong>Total<br \/>\nGain<\/strong><\/td>\n<\/tr>\n<tr bgcolor=\"#F2F2F2\">\n<td valign=\"top\" nowrap=\"nowrap\"><strong>Homestake Mining<\/strong><\/td>\n<td align=\"center\" nowrap=\"nowrap\">$65<\/td>\n<td align=\"center\" nowrap=\"nowrap\">$373<\/td>\n<td align=\"center\" nowrap=\"nowrap\">474%<\/td>\n<\/tr>\n<tr bgcolor=\"#E2E2E2\">\n<td valign=\"top\"><strong>Dome Mines<\/strong><\/td>\n<td align=\"center\">$6<\/td>\n<td align=\"center\">$39.50<\/td>\n<td align=\"center\">558%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>&nbsp;<\/p>\n<p>During a period of soup lines, crashing stock markets, and a fixed gold price, large gold producers handed investors five and six times their money in four years. If deflation \u201cwins,\u201d we still think gold equity investors can, too.<\/p>\n<p>&nbsp;<\/p>\n<h3><strong>How to Capitalize on This Cycle<\/strong><\/h3>\n<p style=\"margin-top: 10px;\">History shows that precious metals stocks move in cycles. We\u2019ve now completed a major bust cycle and, we believe, are on the cusp of a tremendous boom. <strong>The only way to make the kind of money outlined above is to buy before the boom is in full swing.<\/strong> That\u2019s now. For most readers, this is literally a once-in-a-lifetime opportunity.<\/p>\n<p>As you can see above, <strong>there can be great variation<\/strong> among the returns of the companies. That\u2019s why, even if you believe we\u2019re destined for an \u201call-boats-rise\u201d scenario, you still want to own the better companies.<\/p>\n<p>My colleague Louis James, Casey\u2019s chief metals and mining investment strategist, has identified the nine junior mining stocks that are most likely to become 10-baggers this year in their special report, the <strong><em>10-Bagger List for 2014<\/em><\/strong>. <a href=\"http:\/\/www.caseyresearch.com\/go\/vw37p-2\/PIP\" target=\"_blank\">Read more here.<\/a><\/p>\n<p>&nbsp;<\/p>\n<div id=\"xvMdV95u77zU\" style=\"clear: both;\">The article <a href=\"http:\/\/www.caseyresearch.com\/go\/vw3sq-2\/PIP\" rel=\"permalink\">What 10-Baggers (and 100-Baggers) Look Like<\/a> was originally published at <a href=\"http:\/\/www.caseyresearch.com\/go\/vw3vr-2\/PIP\">caseyresearch.com<\/a>.<\/div>\n<div style=\"clear: both;\"><\/div>\n<div style=\"clear: both;\"><\/div>\n<div style=\"clear: both;\"><\/div>\n<div style=\"clear: both;\"><\/div>\n<div style=\"clear: both;\"><\/div>\n","protected":false},"excerpt":{"rendered":"<p>By Jeff Clark, Senior Precious Metals Analyst, Casey Research Now that it appears clear the bottom is in for gold, it\u2019s time to stop fretting about how low prices will drop and how long the correction will last\u2014and start looking at how high they\u2019ll go and when they\u2019ll get there. When viewing the gold market &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/www.investmacro.com\/forex-news\/2014\/03\/09\/10-baggers-100-baggers-look-like\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;What 10-Baggers (and 100-Baggers) Look Like&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-48256","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/48256","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=48256"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/48256\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=48256"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=48256"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=48256"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}