McEwen Mining is Still My Favorite Investment

If you were wise enough to take my Sep. 15, 2014 advice to buy McEwen Mining, you would have seen the price per share zoom from US$2.36 all the way down to US$1.10 today (click the image to enlarge)!

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Don’t you love me now?  Joking aside, what could have caused the share price to decline by 53% in five months?

Did the price of gold collapse?  No, the price of gold declined by only 0.34%:
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Did the price of oil, a major cost of mining, skyrocket?  No, the price of oil crashed by 43.32%:
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Did a radioactive meteor crash into a McEwen Mining mine?  No, McEwen Mining achieved record production in 2014: production2014

Did McEwen crash the MUX price by selling shares?  No, Rob McEwen on Dec. 12, 2014 bought 200,000 chares at US$1.28 each.  Then on Dec. 19, 2014; he bought 1,000,000 shares at US$0.91 each.

So there can be only one reason the price of MUX went down so much: rich sellers got stupid.  If you are poor and smart, you will buy more MUX now as the stupid people sell.

My Favorite Investment Now: McEwen Mining (MUX)

If someone alive today had multiplied your wealth 33-fold in thirteen years, would you trust him to manage your money further?  Would you believe that such a person is not only alive and well today, but wants to manage your money for free?

His name is Rob McEwen, and he produced a 33-fold increase in share price in thirteen years for Goldcorp shareholders (click the image to enlarge it):

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McEwen owns 25% of McEwen Mining and pays himself a salary of ZERO:

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McEwen on February 18, 2011 spent US$20 million of his own money to buy U.S. Gold (since renamed “McEwen Mining”) shares at US$6.50 each.  You can buy shares in McEwen Mining today for only US$2.36 each.

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As of June 30, 2014; McEwen Mining owes no debt:

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Are there downsides to MUX?  Of course.  The downside that puts off the most would be an absence of profit.  MUX has never earned much profit ever.  But gold miners never earn a profit before production begins.  This was true of Goldcorp before it struck gold big, and it is true now of MUX as it continues to use the gold mined from two of its mines to finance development of all its future mines.