Bear Creek Mining is a favorite stock of mine when it comes to measuring sentiment in the junior mining space. The company has been around for a long time and has been a long standing “trading sardine” like most juniors. It’s also a junior with a focus on silver which makes it even better for gauging sentiment in my opinion (because silver speculators are even more emotional than gold speculators).
Anyway, Bear Creek Mining has reached levels that have proven to be quite profitable buy zones over the last 12 years:
Personally I think we are way past the “point of no return” when it comes to selling juniors. If one were a trader or wanted to take profits it should have been done quite some time ago. Now, as the chart above suggests, the question is: How much lower can the juniors go before the next >100% rally comes our way?
When factoring in the price of silver the dislocation looks even more extreme:
This is the best value investing environment I have seen since I started investing in junior miners. Unlike the 2015/2016 bottom the juniors are more than not quite cashed up today and the metals are trading a lot higher. Thus my sell list is non existent and I have a buy list that is like 40 names long. When I didn’t know much about miners back then I tended to just buy what was down the most and that worked out quite well… When things are cheap it’s quite hard to make mistakes.
Note: I don’t own Bear Creek Mining and this is not investment advice.