What's on my Mind.....

1. This may sound weird but I am very happy to see Silvercorp finally pull back. Remember, we went up 46% last week alone and we definitely needed a healthy couple of down days to consolidate and shake out weak hands.

I hope you're not one of the people who were selling today because that would be a mistake. Perhaps we have a bit more downside to go, but I highly doubt it would be more than 10% until a bottom. If tomorrow is down again, I might buy some more. And if it turns around, well that's great.

That's why today I added to my Silvercorp position. It was very easy to get shares so I could tell that many people were just cashing in their gains from last week.

It's not a bad idea, but they will be regretting it when they check out the share price of Silvercorp in a couple months and see it over $20!

2. I started to let you know about the US Gold acquistions yesterday. Qbit was telling me how share holders of the 4 small companies will have their shares exchanged for US Gold shares.

The only trivial thing is that the exchange rates don't quite work out perfectly. You can buy for example Coral Gold Resources and they will give you 0.63 shares of US Gold for every share of CGR you own.

The current price of US Gold is $6.24. In Canadian: $7.18; times .63=$4.52

So technically since CGR closed at 4.14 today, they are trading at a ~8% discount to what US Gold is offering. (If my math there is correct).

I am still baffled as to why this is the case....It seems too good to be true to me. I thought that all these stocks would open much higher this morning but instead they opened down.

That's why I'm not making any moves until I read more information regarding these acquisitions. Just keep in the back of your mind that most trades done for a quick profit, usually end up with a quick loss.

The details to these deals are very murky and unclear if not even talked about. There is no deadline date to close the deals. It's all quite...weird, unprofessional and unprepared...to me.

Maybe I'm just thinking too hard but until I get more information on these deals, I'll wait for US Gold to start trading on the TSX and then I'll look very closely into buying them.

If you're an American investor, I think that buying US Gold over the counter would be a good trade even right now. There are few good gold exploration plays in the US and all it'll take is to have a Barron's article about this company for the stock to go crazy. Somebody else who will pump it in a couple months will be Jim Cramer.

The US media are still sleeping to the commodity market but when they wake up, US Gold will be one of the go-to mania stocks whose stock charts will remind us all of the tech bubble.