This past Thursday, one of the spec gold stocks that I own was the subject of a takeover offer. The largest shareholder (representing ~50% of the voting interests) gave its blessing to the deal, suggesting it is likely to go through. I decided to sell my stock that day, and while the return was not quite as outsized as I had originally anticipated, I am happy to make money in this market (considering the headwinds that I believe lie ahead).
The other moral to this story was that (I think) this episode is the start of a trend in the precious metals space. Gold will flourish in this market, whether you believe in inflation or deflation. It is a true monetary asset, one that has an inelastic supply and which the central banks of the world cannot debase at the first whiff of trouble. Therefore, small companies that hold the promise of gold in the ground will get gobbled up by larger mining concerns. It is why I have tried to build a portion of my portfolio around such companies. Will all of my choices work out? I'm optimistic, but probably not. Nevertheless, it is worth the time and effort to look at these companies. Because even though the company mentioned above did not give me what I was hoping for, it still gave me over 50% in about 8 months. I'll gladly take that as much as I can.
