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Precious Metals
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General Precious Metals
Market Freakout Creates Urgent Buy
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Dear Underground Profits Member,
Herd mentality always amazes me.
Results from a 2008 study at the University of Leeds show that it takes a minority of just 5% to influence a crowd's direction — and the remaining 95% follow without realizing it.
And there is no better place to see the effects of herd mentality other than the stock market...
Like clockwork, herd mentality has once again prompted a sell-off as weak-kneed investors exit the markets over the “Sell in May, and Go Away” superstition.
The death of Bin Laden probably hasn't helped, either. In the past three days, the Dow has lost over 250 points, while the NASDAQ has lost nearly 3%.
The Canadian markets have been hit worse. The TSX exchange has lost over 4% in that time; the TSX Venture is down over 6%.
Research has shown that herd mentality is more pronounced in smaller stocks, growth stocks, and stocks from emerging markets. (The recent losses from the TSX Venture — which lists growth stocks almost exclusively — is a perfect example.)
Every year, groupthink pulls markets down. And every year, I end up making a killing by snapping up shares of stocks that get oversold.
Herd mentality is great for me. It pays.
This year, I'm seeing that there's no better way to play this game other than with a stock that's already in our portfolio: Ethos Capital.
Since the beginning of the week, shares of ECC have lost about 16%... And the stock is now trading is a very strong buying range under a dollar.
Not only do I expect this stock to quickly pop back up to $1.15; but I think we'll see share prices in the $2.50 range before the end of the summer.
I've been beating this drum for weeks (more like months), but the Yukon gold rush is real. And Ethos' four new projects are right in the heart of it all. (Click to see Ethos' property map.)
Now is the time to be a shareholder. As you know from my last update, Ethos will begin its 2011 exploration program on their Yukon projects in less than three weeks.
The exploration season for gold hunters is quite short in the Yukon. The region's northern latitude means exploration teams can only work for a short time between late spring and early fall before sub-freezing temperatures chase them out. And with no exploration progress, companies working in the Yukon tend to sag during the winter months...
But once the drills start turning, things change.
If you're not a current shareholder of Ethos Capital, I strongly urge you to establish a position now. I cannot promise that we'll see share prices below a dollar anytime soon.
Even if you are a shareholder, I urge you to stack up as much of this cheap paper as you can get your hands on.
Other Updates
I am still working on my top five uranium explorers report and will get that to you soon.
Also, as I mentioned in the last update, I want to give you updates on Ely Gold and Minerals and Wealth Minerals. But after seeing the market's overreaction this week, it was urgent that I get this update to you first.
Nevertheless, I will have all of that for you soon.
Good Investing,
Luke Burgess
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