Gold and silver penny stocks could be next trader obsession

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Gold and silver penny stocks could be the next Robinhood trader obsession, says this portfolio manager

“Wait until the Robinhood traders learn about the gold and silver penny stocks, that’s where we’re long,” Costa told MarketWatch. He was referring to a low-cost trading app that has lured a flood of new investors, who have lately won some bets on beaten-down stocks.

“The mining space has been in sort of a recession since the 2011 peak of gold and silver prices. The capital in the space has dried up significantly. I think that now with the macro and fundamentals aligning with technicals on the long-term side, I’ve never seen such a good setup for an industry like precious metals,” said Costa.
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https://www.marketwatch.com/story/g...is-portfolio-manager-2020-06-25?mod=home-page
 
I have a disconnect between what it means to own physical gold versus a gold fund or ETF. Besides maybe market timing the gold index and increase your purchasing power through cash, gold in my mind is a secure asset that will hold when the U.S. dollar crashes and brings down the worlds monetary system with it. So if someone holds a gold ETF do they really 'own' gold?

I guess I hold the same issue with Robinhood's cryptocurrency market where you can trade bitcoin but you don't actually hold it like you would buying it from Coinbase.
 
ETFs like GLD actually owns the gold, and you'd never actually have it in your hand, but you own a portion of it.

On the other hand an ETF like GDX contains gold mining companies and they may not hold any gold.

If society collapses, gold coins may be worth a lot, but I'm not sure what happens to your GLD if the broker or ETF managers go off the grid. We may have bigger problems on our hand if that happens. :)

Same with GBTC who owns a lot of cryptocurrency, but the owners of the company stock only own the value of the holding company.
 
Lots of risk with any individual gold miner that isn't KGC, NEM, AUY or GOLD. Might be best off just buying GDXJ for juniors. TSX is loaded with fly by night penny miners - many of them fraudulent.

Seems the Robinhood clan has no idea of stock valuation. They think if the price is low, it's cheap. Was AMZN cheap at $1,800 a share?
 
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