After yesterday’s market action you might feel like a little bit like a piñata.
It doesn’t matter what you were long yesterday – unless you shifted into Treasuries or the dollar at the open, you got beaten up pretty good.
And I normally avoid talking about daily movements at all. I don’t find them very useful when the market ticks up slowly (as it has for much of the past 24 months) nor do I find daily gyrations very useful even when the market takes a serious stumble. They’re usually completely pointless, boring and I have zero interest in reading or writing about daily movements in general.
Notice I’m not even talking about a specific market. It didn’t matter yesterday: nearly everything was correlated to the downside.
I got smacked around a little bit too. I bought silver a few weeks ago when it was at $43 an ounce. After yesterday it’s selling for under $36.
Now I could panic and sell my silver. I could lock in that loss.
But I see no reason to. The broad selloff yesterday should tell me that today is a better time to be bullish than yesterday – or two weeks ago.
I also don’t care why the market fell yesterday – or really where it might go today.
There are lots of reasons to be less than bullish on the broad stock market. There are even some reasons to be cautious of the bull market in commodities.
But I’m not going to venture a guess as to why the market fell yesterday.
I am excited about the prospect that it might go down further in the short term. And I do believe that sovereign debt issues in Europe and the United States probably play a large part in what happened yesterday.
But those sovereign debt issues weren’t fixed yesterday. They won’t be fixed today or even next week, month or year.
We’re stuck with these problems because they’re so incredibly massive.
How massive are they?
They’re so massive that world governments and the market as a whole simply hasn’t come close to recognizing how much debt is out there.
And yes, while the markets react and overreact to uncertainty, debt, crisis, war, unemployment and politics, we will see our commodity investments ebb and flow over the short term.
But I really hope you’re not selling into this weakness if you’re a commodity investor.
If you’re not MORE bullish than you were two days ago, then you simply aren’t looking at the markets in the right way.
As famed resource investor Rick Rule says: if you’re not a contrarian, you’re a victim.
So what do we do now? I’m buying more gold and silver in the coming weeks and months. I’ll also be looking for high quality gold mining stocks selling for a substantial discount after yesterday’s beating.
My friend and colleague (and expert small cap analyst) Tyler Laundon has been waiting for a market correction like this one. He’s about to release a report on his favorite gold miners. When he does, I’ll let you know.
Or, you can take a free trial to his service Small Cap Investor Pro by clicking here now. Then you’ll receive his gold stocks in your inbox as soon as he releases the report, which I believe will happen any day now.
Check out Tyler’s service. He’s been doing the kind of in-depth analysis to target strong junior gold miners – and now the time is perfect to start buying.