Retirefund's  Instablog

A new ETF promises to track the returns of the Venture Exchange in the coming years. The Global X S@P/TSX Canada ETF is currently trading under $10 currently. Like the companies on the exchange, this ETF is speculative, however at the current price point for both the ETF and the exchange, the upside can be huge. The entire exchange has been literally hammered over the past year. The Venture exchange, populated with small mining, energy and resource companies, has a history of up and down volatility and if that history is any indication, it is poised for monumental returns over the next year.

The exchange is down almost 45% over the past year.

However, history teaches us that, when dealing with the Venture Exchange, what goes down, always goes up. In this case, extreme volatility can be your very good friend. You don't buy the venture at the top. You buy it at the bottom, or as close to the bottom as you can. I believe this exchange is at a bottom and is poised for huge gains. If you don't like to spend the time picking individual stocks, especially ones with this kind of volatility, then (TSXV) is probably the vehicle for you.

A recent article at Pinnicle Digest, details 7 significant drops in the Venture Exchange since it's inception 11 years ago, and the subsequent recovery points. From trough to peak, here are the numbers:

Average loss (in percentage terms) during a correction (peak-to-trough): -36.25%

Average duration of a bear market in the TSX Venture: 5.78 months

Average gain after a correction (trough-to-peak): 98.08%

Average duration of a bull market in TSX Venture: 11.83 months

The current drop of the exchange began in March of 2011 and has lasted for almost 14 months.

tracks the top 30 most liquid stocks on the Canadian Venture Exchange and began trading in March this year. It consists of two sectors, Materials (53.9%) and Energy (46.1%) Although most of the companies listed in the Venture Exchange have their headquarters in Canada, their operations span the entire globe, wherever precious metals, resources and energy are found. The Venture is the largest "pure" resources exchange anywhere today.

I believe the is a great way to track the junior resource industry. I am also a speculator of a number of small and even penny stocks on the exchange that I have been following for some time. They represent approximately 10% of my portfolio at any given time. (volatility is not for the faint of heart, nor for more than 10% of your money).

Having said that, I have made some spectacular gains on the Venture Exchange.. I believe that the exchange is now poised for some of those gains again this year. In the mining sector, we are at the start of drilling and excavation season. The spring is when hope springs eternal for many small mining stocks and this year will be no different. Some will fall short and some will find new reserves that could change there share price in spectacular fashion.

As I have pointed out in previous articles, I have bought stakes in Brigus Gold (BRD), San Gold (SGRCF.PK), Alberta Oil Sands (TSXv-AOS) Talison Lithium (TLTHF.PK) Rodinia Lithium (RDNAF.PK) and Western Lithium (WLC) My most recent purchase is:

International Lithium Corp

TSXv-ILC

ILC is a small company (a penny stock trading today at .085c) with huge resources in both lithium and potash reserves. in Argentina, Canada USA and Ireland. The venture exchange has dropped significantly over the past year and companies like ILC have had their share prices slashed to lows never seen before. A number of Lithium juniors have partnered strategically with battery companies. ILC's strategic partner is Jiangxi Ganfeng Lithium Co. Ltd of China.

About Jiangxi Ganfeng Lithium Co. Ltd.

Ganfeng Lithium based in Xinyu, Jiangxi Province, China, is a professional producer of lithium products which has developed a comprehensive product chain, including lithium metal and alloys, inorganic and organic lithium chemicals, supplies a wide range of lithium products for primary and secondary lithium battery market, pharmaceutical and new material industries. Ganfeng's principal market is in China with international exports to Europe, Japan, USA and India. "Ganfeng Lithium, as a leading lithium downstream products producer in Asia, has recently announced in the company's 2011 annual report USD75 million in sales revenue representing a 34% increase over the previous year. Currently Ganfeng consumes a significant volume of lithium raw material but taking into account projected business growth, sourcing a future supply of lithium becomes more and more important to support Ganfeng Lithium's core business. The company was founded in 2000, it was listed on the Shenzhen Stock Exchange in August 2010, notably as the first publicly listed lithium company in China and has experienced rapid continuous growth over the last 10 years.

"Increasing our share in ILC is part of our raw materials strategy." Wang Xiaoshen, Executive VP of Ganfeng Lithium Co., Ltd.

It takes a lot of time and research to invest in individual companies, especially juniors on a volatile exchange, so if you don't have that time, then maybe you should consider The Global X S@P/TSX Canada ETF for that "speculative" portion of your portfolio.

Related articles

• Loonie enters period of seasonal strength (theglobeandmail.com)
• 4 Newly Rated ETFs for Your Portfolio (thestreet.com)
• Long-only Commodity ETFs vs. Futures- April 2012 (managed-futures-blog.attaincapital.com)
• ETF experts prefers an all-weather portfolio (Globeandmail)

Disclosure: I am long BRD, SGRCF.PK, TLTHF.PK, RDNAF.PK, WLCDF.PK.

Additional disclosure: long International Lithium Corp.

Rodinia Lithium (TSX RM)
Today .18c

Last November I discussed Rodinia Lithium and my belief that it is the next prize in the second leg of the lithium boom. Insider trade reports supplied by TD Ameritrade, indicate that, with one small exception, all insider transactions for 2011 are "buys"! There are "NO" sell trades.

This is a clear indication that the people who actually know what is occuring in the company, on a day to day basis, and those overseeing the company's development, are very poositive about their prospects, that they have only bought more of the stock, and not sold "any" of their holdings. This information alone, tells us something of value is growing at Rodinia.

1. Insiders are buying this stock.

2. Rodinia owns three of the top 25 lithium properties in the world.

3. Shan Shan Corp., one of the largest lithium battery suppliers in China, purchased their entire bought deal in Nov 2010, above the asking price, to ensure they are flush with cash to advance their properties.

4. Rodinia's top three properties are all brine properties, with low development costs, in two of the best mining districts in the world, Clayton Valley Nevada and Salta Argentina. They are also listed in the top 25 lithium properties in the world today.

5. Byron Capital Markets Dr. Jon Hykaway, rates it a strong buy with a target of $2.25
(considered one of the foremost lithium investment experts today)

6. On April 12, 2011 Ubika Research has issued a valuation report with a Price of $1.12 for Rodinia Lithium. (We think that is a very low assessment)

Rodinia was trading today at .18 cents. RM.v or in the U.S. as RDNAF.PK

It's market cap today is listed at $11.79M with 65.5M shares outstanding.

With $10 Million in cash on hand for development, this values the company at only $1.79 million.

That is a ridiculously low valuation for Rodinia's lithium properties!

Further more, it does'nt even address the large potash concentrations which will be a secondary product for this small company.

Besides the Argentinian properties, Rodinia also has its lithium brine project in Clayton Valley, Nevada which constitutes the only lithium brine asset in the continental United States.

For these reasons, I have been buying more Rodinia stock this month. I believe this stock will triple by Christmas, however, I am looking for a 10 bagger and I expect to get it sometime next year.

Maybe you should consider adding Rodinia Lithium to your speculative value portfolio.

Wishing you great success with your Retirefund.

HP

Rodinia - Clayton Valley Nevada

More Articles:
The resource of the 21st century
Rodinia looks like the next prize

Rodinia CEO interview

Links:

The Grandich Letter - Rodinia Lithium

Related articles

• Rodinia Lithium Confirms Brine Grade and Quality at Diabillos lithium property (retirefunds.blogspot.com)
• Rodinia Lithium getting on Analysts radar screens! (retirefunds.blogspot.com)
• Rodinia Lithium Announces Up to 1,800 mg/L Lithium from Aquifer I Pit Sample Results (retirefunds.blogspot.com)
• Rodinia Lithium Provides Update on the Salar de Diablillos Project (retirefunds.blogspot.com)
• Rodinia Lithium (RM - TSX.V) More Insight Into Yesterday's News Release and Byron Capital Markets Initiated EQUITY RESEARCH (investorcubed.wordpress.com)

Disclosure: I am long RDNAF.PK.

Why savers should be saving gold and silver now!

"Money printing works, until it doesn't work anymore"!!

I am not sure who the original quote is credited to, but it I know it is a favorite quote of Marc Faber, author of the "Gloom Boom and Doom Report". You can view his latest interview at Capital Account. In that YouTube video, Marc refers to the "inflated ego of Fed Chairman Ben Bernanke" as the excessive money printing continues unabated, on a sure course to financial ruin for many people. He fears there will be social upheaval in a number of western democracies and that wars will evolve from the hyper inflation to come. You may agree or disagree with his ideas, but I think you will agree that Faber is not a fool. His opinion is a learned one, and should be heeded along with others who try to make sense of a financial crisis that is not yet finished playing out.

In the 1970's there was one listed "Billionaire" in the Forbes list. By the mid 80's that had risen to 8. Today Forbes lists over 1200 billionaires in the world, and Faber believes the number is closer to 1500. Maybe that statistic is a "canary in the coal mine" of a hyper inflationary model which is being perpetrated by Banksters and Central Banks throughout the world at this writing. Now I know that none of those 1500 are reading this column, but I hope that many of those whose finances stand to be either greatly reduced or even wiped out, are.

Gold and Silver are not an investment!. Let me repeat that. Gold and silver are not an investment! Gold and silver are (excuse the pun) the most "solid" form of money you can possess. Yes, these two precious metals are money! They have been money for about 4,000 years. Right up until 1964, silver was used in U.S. Denominated coins. That is why in 1964 a U.S. Quarter would buy you a gallon of gas. That is why today, the exact same U.S. Quarter (dated 1964 or before) will still buy you a gallon of gas. It is because of that silver content.

During the Roman Empire circa 2,000 years ago, an oz of gold would buy you approximately the same value of goods as it will buy you today. ( I know that "goods" are interpreted in different ways, but "food" and "Clothing" are goods and that comparison can be made) This is money that has kept it's value for thousands of years, and continues to keep it's value, even though, at least 2 or 3 times per year, there is a hue and cry from the so called investment community that gold has lost it's "sheen" and subsequently drops, only to return to it's steady climb in the month following. Usually only the "drop" in prices is reported by the headline seeking general media. They often don't report the steady rise as it usually takes the entire year to shake out higher, as it has for the past 11 years in a row. For instance, the price of silver rose 22% in just January and February of this year. Most people are not aware of that, because it rate a "one day" headline, but it is fact.

How do you pay down a 15 Trillion dollar debt? Well, you make the 15T worth a lot less, that is the only way. You "inflate" it away. You print money, and you print money and you print money. And it works, "until it doesn't work anymore"! Just ask the blue collar savers who have been squirreling cash away for a rainy day.
Against gold, they have lost over 500% in the past 10 years.

Yes I know, the famous Oracle of Omaha once said that "gold has no value". However it is now a certainty that, If Warren Buffett could have sold all of his shares in Berkshire 10 years ago, and just bought physical gold, he would be 500% richer today (give or take a percentage point). How is that for maintaining value?

There is now a race to devalue currency, by almost every major central bank in the world. The only "currency" they cannot devalue, is gold and silver, though they try and try, by using the fear factor. Don't fear owning gold my friends. Fear not owning gold and silver, especially if you are a saver.

Over the past 12 months, more than 61% of "all" U.S. Treasuries were actually bought by the Federal Reserve Bank. Yes, that is right. The United States of America is buying its own debt. That is because foreign banks are only buying less than 2% of that debt! Sound like a problem to you? Sure does to me. Sounds like money printing to me, on a massive scale!

Most people do not realize that, all of the gold mined over the past 4,000 years, if melted down, would only fill 2 Olympic sized swimming pools. Does that sound like a shortage to you? Sure does to me. Now consider that the Silver/Gold ratio is historically 16:1 At today's gold rate, that places silver over $100 per oz. (trading today under $33) That is only if gold does not increase further in U.S. Dollar value (some value eh!)

Now here is another fact to consider. As the money printing continues over the next decade, or as hyper inflation begins to rear its ugly head from the money printing of the last 4 years, and we can draw any conclusions from the previous decade, then gold will reach (in U.S. Dollar terms) Approx $8300 per oz by 2022 (or before).

Now, does today's gold purchase price of usd $1650 sound like a bargain to you? It certainly does to me!

Savers should be buying physical silver and gold right now if they haven't already been accumulating. Your savings depend on it.

Personally I have invested in both physical silver and gold and I am investing in mid tier gold miners that have been beaten down over the past year. Do your own homework, but look for mid tier miners (Ones that could be attractive to the senior miners, who can only increase production by scooping up smaller names) who have solid management, producing mines, increasing production, increasing reserves and who's production costs does not exceed $800 per oz. (the lower the better).

You don't need good luck with your Savings. You only need good currency.

HP

Related articles

• James Delingpole: Why money-printing is like 'global warming' (junkscience.com)
• Badly Inflated (lewrockwell.com)
• CNBC - 'Massive Wealth Destruction' Is About to Hit Investors: Faber (cointrader.wordpress.com)
• Silver - When will the physical market disconnect from the paper contract price? (mercuryreliance.wordpress.com)
• Seeing the future through the rearview mirror (strayingfromtheflock.org)
• The Last Bastion of a Broken Republic is Printing Money (superbullinvestor.com)

Disclosure: I am long SGRCF.PK, BRD.