Wednesday, October 03, 2007

How to pick a junior gold stock

Hot on the heels of the "Three rules for buying resource stocks" post, we bring you some more of Rick Rule's insight into resource sector speculation, courtesy of the Daily Reckoning Australia.

In this post, we'll take a look at Rick Rule's guidelines for choosing a junior gold mining stock.

But first, why would anyone want to "invest" in a junior mining company?

For a bit of background on that, please see Jim Puplava's 2002 article, "The Perfect Option". This piece was written in the early days of the current gold and gold mining share bull market; as you can see, Jim's been quite right so far.

Now back to Rick Rule's guidelines. As you'll see, Rick offers up his rules of gold mining speculation as a means of sifting out not just the undesirable companies, but also the unprepared speculators and investors.

In Rick's view, it takes someone who is willing to work for the results to come up with winning results in this area of the market. Success favors the well prepared and strong of mind.

In exploration and speculation, one thing never changes: success favours the trained observer. Luck follows those who use the best tools with consistent discipline. Here are some other tools. The right answers to the following ten questions can help you decide if you even want to bother following, much less buying, a junior gold stock.

Read on for the complete rundown of, "How to Pick a Junior Gold Stock".

You may also wish to look at Keith Barron's, "Practical Advice on Picking Junior Mining Stocks", for more wisdom on this topic.

Be sure to note the risks involved with participating in these sectors, and always look to experienced guides for help and advice when navigating uncharted waters.

Another piece of good advice when dealing with speculative ventures: don't risk money that you can't afford to lose.

Enjoy the articles, and see you tomorrow!