Interview – Peter Grandich: “People Threw In The Towel On Mining Shares, and That’s When They Finally Move Higher”

February 2, 2012 | By Tekoa Da Silva | 1 Comment

I had the chance once again to speak with Peter Grandich yesterday, publisher of The Grandich Letter, and “Confessions of a Wall Street Whiz Kid.”

It was an exciting interview, as Peter understands the economy, gold, and the junior mining sector in a way that few other commentators do. The items we discussed were the DJIA continuing its move higher, gold breaking out technically, and the junior mining sector as being an incredibly cheap place to invest.

In regards the U.S. stock market, Peter said, “I work under the premise that there is a ‘don’t worry be happy’ crowd on wall street, and that the market is always tilted to the biased long side…the bulk of the financial institutions deal in stocks and bonds, and most times they always have a biased to be long…I like to joke that if you tossed one of them off the empire state building, all the way down they would say the same thing–’so far so good’...Most of the people that work in the financial service industry have a natural tendancy bias to be bullish, or to look at the cup half full rather than half empty.”

When asked about what he sees in the price of gold, Peter commented, “All that we had from December until recently [on the gold chart]is what I call the bullish descending wedge formation, that gold has broken out above. And when it breaks out like that, about 80% of the time you can calculate the move, and the move right now looks like it will get to a new high…I hate to sound like a broken record, but we had so much negative commentary in december, mainly from people who have been wrong for a lot of years—this is the mother of all gold bull markets. It’s amazing how well the fundamentals remain in tact, which is no central bank selling, [only] net buying, producers dont sell forward anymore…and the debasement of currencies”

With respect to the share prices of many junior mining shares, Peter said, “The junior market just got way oversold. We saw things come down to levels that their projects were just worth so much more than the current market cap…The problems that I’m hearing from the corporate side, is the concern on these companies now is that they’ll get taken out before they get to a valuation that’s really worthy.”

When asked about the complete disinterest in junior miners by investors, Peter added,“People finally threw in the towel on them, and that’s when they finally do [move higher].”

This was another must-listen interview, and is required listening for gold and mining share investors.

To listen to the interview, click the following link and/or save to to your desktop:

Interview with Peter Grandich

To learn more about Peter visit: Grandich.com

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Thanks,
Tekoa

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