hold gold or gold miners, page-32

... but that's not to say you can't make a lot of money in the gold stocks. A few good investments can provide spectacular returns even if you've made many bad choices as I have done. I reckon about 1 in 50 gold stocks make it really big.

Saville goes on to say this and suggests now is a great time to be accumulating the juniors:

"This doesn't mean that gold stocks should be avoided. It is unrealistic to expect that gold stocks, as a group, will do better than gold bullion over the course of a long-term gold bull market, but during a long-term gold bull market there will be a few 1-3 year periods when the stocks do outperform the bullion.

These periods generally occur a) after gold stocks become very under-valued relative to gold bullion (e.g. the rallies that began in Q4-2000 and Q4-2008), or b) when a rise in the gold price is accompanied by a shift towards risk (e.g. the rallies of 2003 and 2005-2006).

The key is to take plenty of money off the table when there is a lot of enthusiasm for the stocks, so that you will be in a position - at some undefined point in the future - to take advantage when the stocks again become very cheap. In other words, the stocks should be treated as temporary house guests, not as adopted children.

Right now the stocks are uncommonly cheap relative to the bullion. They could get even cheaper, but this is a good time to be accumulating the gold stocks; especially the juniors.

I don't know when the next speculative surge will happen, but I know that there will eventually be another speculative surge that creates wonderful profit-taking opportunities for the owners of gold stocks. I also know that most owners of gold stocks will ignore the opportunity when it arrives, because they will be confident that far greater gains lie just around the corner.