How to Seize the Day with the Mother of All Speculations

“Carpe diem quam minimum credula postero,” scrawled Latin poet, Horace, in 23 BC.

The common translation for this fabled ode is, “Seize the day, put very little trust in tomorrow.”  Indeed, its meaning can be easily misconstrued.  Does it mean one should play hooky from work and not care about tomorrow?

Maybe, upon first review, it does.  Though, from what we gather, Horace was getting at something entirely different.  What he really meant is that the future is uncertain…and that one should do everything they can today to prepare for tomorrow.  In other words, one should plan for uncertainty.

Perhaps, Horace also meant that one should prepare for a tomorrow that is different than today.  For the only guarantees in life are death and taxes.  The only other guarantee is change.

Often times change is subtle.  Occasionally it’s dramatic.  There was the world before 9/11 or the assassination of Franz Ferdinand, and the world after.

The future may shine bright at the moment.  But there’s always a dark cloud just over the horizon.  Likewise, missing an opportunity today could have stark consequences upon tomorrow.

Eager to Play the Greater Fool

One way to seize the day is to uncover opportunities that others have overlooked.  This takes patience, a contrarian mindset, and the capacity to act with conviction.  Rare is the person that’s capable of seizing the day in this manner.

Most folks would rather follow the herd.  They’d rather buy shares of Amazon than take a shot on something that’s unwanted and unloved.  But to buy Amazon right now is to play the part of the greater fool.  It’s trading at $400 per share, has a price to earnings ratio of 1,447, and pays no dividend.  Nonetheless, people are eager to own it.

People seem to always want to buy stocks when they are hitting new highs.  However, the right time to buy stocks is not when they are at record highs, but when they are at bear market lows.  Yet, for whatever reason, during market lows, like March 2009 or following the 1987 crash, most people don’t buy stocks.  They sell.

There must be a sweet smelling fragrance emitted as stocks reach new highs that causes a person’s head to fill with visions of easy riches.  Similarly, there must be an odorous stench released following a market crash that causes people to panic out of their positions at the very moment they should be loading up.  Why is this?

Strangely, investing psychology goes contrary to other purchases.  While people can quickly discern a bargain price for a pair of jeans or a flat screen TV, with stocks they have the uncanny ability to buy high and sell low.  The fear and greed emotions seem to always get the best of them.

How to Seize the Day with the Mother of All Speculations

Stocks have already gone up a lot.  They could go even higher.  But they won’t double again without a significant selloff coming first.  They won’t turn a small grubstake into a small fortune.

But what if we told you there’s an unwanted and unloved sector at bear market lows that could really jump over the next 12 months?  Would you seize the day, as Horace suggested?  Or would you buy an S&P 500 index fund and watch as your money rolls over with the broad market?

If you’re ready to seize the day, then we have an exciting opportunity for you.  Don’t worry…it’s not a hot stock pick.  It’s something much, much better.

But before we tell you what it is we ask you to first remove all prejudices.  Because the opportunity we have for you is unwanted and unloved by the masses.  In fact, it is downright despised.

Are you still with us?  Ok, here it is…

The exciting opportunity we have for you is gold.  More precisely, it’s gold mining stocks.  How’s that for a reviled, bear market sector?

Obviously, gold had a terrible year in 2013.  It fell from around $1,800 per ounce to around $1,200 at the start of 2014.  That’s a loss of about a third of its value.

But gold mining companies were beaten down far worse than gold itself over the last few years.  For instance, a basket of junior gold stocks (NYSE: GDXJ) fell over 80 percent from gold’s peak.  It was an absolute bloodbath.  But it’s now a remarkable opportunity.

The trends in effect that pushed gold up 645 percent from 2001 to 2011 are still in place.  The federal debt – now over $17 trillion – continues to rise unabated.  The Federal Reserve’s reckless quantitative easing program and zero interest rate policy continue.

Stock prices have been inflated to new highs.  After bottoming in March 2009, the Dow has spiked 143 percent, the S&P 500 has jumped 165 percent, and the NASDAQ has skyrocketed 213 percent.  At the same time the economy has trudged along a slow and agonizing recovery.  Jobs growth has been anemic.  The middle class continues to get shredded.

The broad realization that the recovery’s a sham will eventually prick the stock market bubble.  The chickens of reckless money printing, unabated debt growth, and ultimate inflation, will come home to roost.  Gold will inevitably resume its uptrend as the safe haven of last resort.

At the moment, despite its awful beating in 2013, gold’s price has stabilized and is setting up for a considerable rebound.  What’s more, gold mining stocks are incredibly cheap.  Quite frankly, this could be the mother of all speculations.

If you’ve got the conviction to seize the day, consider buying the Market Vectors Junior Gold Miners Exchange Traded Fund (NYSE: GDXJ).

Remember this is a speculation…don’t bet the farm on it.  But with a little luck, your lunch money could multiply significantly.


MN Gordon
for Economic Prism

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One Response to How to Seize the Day with the Mother of All Speculations

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