Buying And Selling Gold Coins MRR Ebook

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If you are an experienced investor you may want to consider purchasing individual gold stocks. This way you’re buying into a company that has extensive gold reserves (or is about to mine them) and you’re using the experience of the management to take full advantage of the rising gold trend.

While performing detailed evaluation of gold stocks is outside the scope of this book here are some very important factors to consider when investigating gold mining companies.

Back Experienced Management

It’s like everything in life – experience counts big time. Backing a gold mining company that has an experienced management with a fine track record is far more likely to bring you success than a company with no experience behind it.

What’s The Net Asset Value Of The Company?

This is the question you need answered to find out what would happen if the company collapsed tomorrow. This is the question that will expose the potential downside of your stock play. You can compare the net asset value to the current market cap of the company to see if the stock is being sold at roughly base value. The closer the net asset value is to the market cap the safer the bet. Unfortunately, during many market booms the net asset value may be lagging way behind the market cap.

Does The Company Have The Funds & Resources To Meet It’s Goals?

Mining for gold is a very specialist industry. Gold exploration is a costly process and processing the metal requires extensive and expensive equipment. Cashflow is often a concern when dealing with smaller mining stocks so analyze the current cash situation carefully before investing. Find out how long the company can survive on its cash reserved and how effective it is in securing loans should push come to shove. Is it already geared to a high extent and how is it servicing the debt?

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