On February 17, 2012, I bought shares of three gold miners: Gabriel Resources Ltd. (GBU), Allied Nevada Gold Corp. (ANV) and NovaGold Resources Inc. (NG)
I want to emphasize that these purchases are a part of my portfolio as they are long-term investments and not trades. The allocation of capital is as follows: Gabriel Resources Ltd ~ 1.1% of my portfolio, Allied Nevada Gold ~ 0.4%, and Novagold Resources ~ 0.2%. My total exposure to precious metal stocks in the core portfolio is now 1.7%.
Currently the precious metal stocks are very cheap compared to the metal price. The gold bull market has a long way to go until it forms a bubble phase. The precious metal stocks that I bought have probably an upside of up to 400% long-term (3+ years). I still believe that gold will correct more, probably going to $1400/oz, or even $1200/oz, before resuming it’s uptrend. Still that didn’t stop me from doing these purchases because they are all unique and special situations that might go up significantly, no matter what the price of gold does.