When NIA's President was 13 years old in an IRC chat room for stocks, he learned from somebody he had frequent conversations with about how Books-A-Million had a new web site set up that said, "coming soon online bookstore". This was when Amazon (AMZN) stock was the biggest play on Wall Street. He didn't have any money to buy Books-A-Million stock, but his online friend said he bought $200,000 worth at $3 per share. He remembers clear as day on Thanksgiving Eve, BAMM stock went from $3 up to $30 in a single day when they announced that they were building this so-called online bookstore and would go head-to-head with AMZN. After that day his online friend never logged on again. Presumably, he moved to an island or something.
One day at the dentist office in the waiting room somebody overheard NIA's President talking about BAMM stock. The man said that these dot-com stocks were a "bubble" and they would all crash by 90%. The man said that real money can be made on the Vancouver Stock Exchange where these magical gold exploration stocks have these cycles where they go from $0.50 to $10 to $0.50 to $10 to $0.50 to $10 over and over again. He said that while dot-com stocks were a bubble, the Vancouver Stock Exchange was in a depression due to a company called Bre-X, which he said went from $0.50 up to $250, but it turned out to be a giant fraud and nobody wants to buy any gold exploration stocks again because of it.
NIA's President laughed at him saying "go buy some more Bre-X pops I am looking for the next BAMM".
NIA's President didn't even look at the Vancouver Stock Exchange until years later after it had become the TSX Venture Exchange, but he remembered every bit of his conversation with that man and realized he was right. The NASDAQ had crashed by 80% and on almost the exact day he had that conversation with that man, the Vancouver Stock Index was at a low. As the NASDAQ crashed by 80%, the Vancouver/TSX Venture Index had doubled in value.
He later learned (still a teenager) that as the TSX Venture Index doubled, certain stocks did better or worse based on how effectively they managed their dilution. If they diluted too much at an extreme low, they only gained by 50%. If they were lucky enough to dilute at higher prices before and/or after the extreme low, they gained 10-20X in value. Some gained 50-100X in value if they made big discoveries.
Augusta Gold (TSX: G) was lucky to dilute at $1.71 and its Executive Chairman is smart enough not to dilute at an extreme low. At minimum it should gain 10-20X, but with AngloGold Ashanti (AU) making America's largest gold discovery in over a decade of 6-8 million oz last month, and G having this Gap Target directly to the west of AU's Merlin discovery... G certainly has the potential to make a similar discovery.
Past performance is not an indicator of future returns. NIA is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This message is not a solicitation or recommendation to buy, sell, or hold securities. NIA's President has purchased 224,200 shares of G in the open market and intends to buy more shares. This message is meant for informational and educational purposes only and does not provide investment advice.
Preparing Americans for Hyperinflation
