January 21st, 2012
It used to be easy to pick stocks before the Internet. Just look for a company with a good balance sheet, good management and a good product made in the US. Now there are thousands of choices and many of them are outside of the US. With online trading you can literally check the stock market in almost any country and purchase stocks with a keystroke or two.
Different categories of stocks have different safety tests. With mining stocks there are many aspects of a company to look at. With the recent changes in laws, taxes, and royalties in some South American and other countries, one of the first things to look at should be where is the mine. Argentina, Bolivia, Peru, Australia, and Venezuela are countries that have recently created an adverse environment for mining and oil companies. In some instances outright nationalizing some assets. Some mining companies like Hecla saw the future and sold their assets in Venezuela saving them from the horrors the oil companies are going through there .
Some of our favorite mining stocks now have some question marks on them. SLW, AUY, and PAAS have large holdings in some of these countries. SLW is a perennial favorite of ours and probably will continue to be, but one must look at the country the mine is in and assess for yourself your level of comfort before buying that stock. With all the information available to you on the Internet it is a relatively easy, but time consuming job. One only has to look at Yahoo finance, or most any other financial website. You can see recent articles on that stock, the officers, location, profitability, experts analysis, profile, earnings, trading volume, research, shares traded, dividends, P/E, balance sheets and charts. Do yourself a favor and check before buying!