Secrets of a Mining Speculator

For the past six years, while other investors played stale blue chips, I've been showing home-run investments to people just like you, year after year.

Greg McCoach is the managing editor of the Mining Speculator and President of AmeriGold, a gold bullion dealer.

His stellar track record is one of the reasons why many of Hollywood's elite go to him to buy physical gold.

Greg's portfolio returns are nothing short of astonishing. Check this out...

2001............+129%

2002............+291%

2003............+348%

2004............+137%

2005............+154%

2006............+144%

Had you invested $10,000 in Greg's portfolio at the beginning of 2001 and reinvested the gains and the original invested capital at the beginning of each year, you'd be sitting on $2.4 million. Now that's the magic of compounding!


This year's not going to be any different.

Now, other analysts might call my stocks "speculative." But the thing is, I don't just pick up any old low-priced stock.

No, no, no. There's a reason why we're sitting on these consistent, massive gains - and luck has a lot less to do with it than you might think.

You see, over the past two decades, my experience has shown that there are three critical elements to raking in eye-popping returns.

Number one: The Advantage of Junior Mining Companies

Why invest in juniors?

That's easy - money and unparalleled leverage.

You see, it's not uncommon for junior mining companies to experience huge gains (tenfold or more) very quickly as news of a discovery leaks out.

On top of that, the exploding bull market in precious metals not only focuses more attention on the sector, but also causes even more money to be spent on exploration. And the payback for a new find increases exponentially.

It works like this:

Say, for example, we find a million-ounce deposit of gold. And an engineering study suggests it could be mined over ten years at a cost of $250 an ounce, including capital. Now, let's assume gold sells for only $350 an ounce.

That deposit's worth roughly $100 million.

But check this out:

If gold shot to $400 an ounce (a 15% increase), the value of the same gold deposit launches to $150 million (a 50% gain). That's over 300% leverage to the gold price (50/15).

Now, with today's gold price of $906, that deposit's worth $656 million. And if gold hits $1,000 an ounce, just like many analysts are predicting, that same deposit would be worth $750 million!

Now that's leverage!

And that's why I like this tiny $2.99 gold company in China so much. With the gold price as high as it is right now and the size of their property - 2.9 million ounces - it's a no-brainer.

But there's more.

You see, in the mining world, it's no secret that the majority of mineral deposits are found by junior mining companies and individual prospectors.

There are several reasons for this:

* Junior explorers are not slow-moving bureaucracies like many senior companies. Juniors make fast decisions both in the boardroom and in the field.

* Senior resource companies generally have a different role to play, namely, to fund and put into production deposits discovered and developed by juniors.

* But it's the talent, motivation and dedication of their management teams that is the secret to most juniors' success.


Number two: Know the Management Team Inside and Out

Listen.

When I'm looking at a company, I spend hours, days, and weeks with CEOs and geologists-even with the companies I would NEVER recommend.

It's the only way you can truly get a feel for their expertise.

After all, in the mining business, if an exploration geologist finds a mine, it's likely that he'll find others.

That's because far fewer than 5% of all exploration geologists will ever be credited with a discovery leading to a producing mine. What's more, less than one out of every 1,000 exploration sites will ever turn into a mine.

But those select, gifted explorers who find numerous mines seem to have a sixth sense that helps them to succeed.

Finding these geologists isn't the easiest task in the world.

I'll admit that it took quite a few failures before I started finding the perfect traits in an exploration company.

But they're all drawn to it for the same reason... money.

It's the huge potential that comes when a discovery's made.

You see, as part of a junior mining company, the geologist who makes the discovery might get $10 million, $20 million or $100 million in capital gains for his efforts.

After all, in the life cycle of a mining stock, it's the exploration phase that provides the biggest move in share price (leverage). A jump of several thousand percent isn't too uncommon - especially with a massive find like the one in Northern China.

The best and brightest mine finders know it. And they'll search the world over to make a new discovery. When they do, the monetary rewards are tremendous, for both the management team and for investors.

In your free report, you'll learn all about the dedicated management team behind my number-one play for 2008.

Number three: The Final, Simplest, and Most Overlooked Part of Making a Fortune Investing

It's best summed up by J. Paul Getty, one of the most successful investors of modern times. What did Getty know about building wealth and investing for spectacular gains that his contemporaries didn't?

Several years before he died, Getty shared his "secret." In his autobiography, he explained that whenever he made an investment, he tried to apply this simple principle:

If you want to make money, really big money, do what nobody else is doing.

In Getty's own words, "Buy when everyone else is selling and hold until everyone else is buying." This isn't merely a catchy slogan. It's the very essence of successful investing.

But as simple as it sounds, too many people do just the opposite. They buy high and sell low. They're trend followers or, to put it more bluntly, they follow the crowd..

The successful investor is a trendsetter, not a trend follower. He gets in - and out - ahead of the crowd.

The ones who do, especially during a precious metals bull market, are rewarded with explosive rewards.

How big?

Well, the last super bull market in precious metals, from 1975 to 1980, saw many mining stocks go from under $2.00 a share in 1975 to hundreds of dollars per share by 1980.

A $5,000 investment in Lion Mines in 1975 turned into $27.14 million. That's right. Over $27 million from just $5,000.

In 1986, a $5,000 investment in Barick gold would have turned into $329,787!

That's what J. P. Getty was talking about when he said, "If you want to make big money, really big money!"

Guess what?

We're entering another bull market for precious metals.

If you had invested just $5,000 in Denison Mines in 2003, you would have made more than $395,000.

A $5,000 investment in Aurelian Resources in early 2006 would have turned into $390,000!

Mark my words: This new bull market is just getting started. The second I realized how explosive these gains were going to be, I had to seize the opportunity.