Puplava: Gold shares to outperform bullion, and soon

[Chomsky]

Developments such as these will be bullish for gold long term, and with gold shares representing a bargain relative to both gold bullion and energy shares, investments in gold stocks at these depressed values will likely be rewarded in the years ahead.

http://www.financialsense.com/Market...2008/1029.html

[phirang]

Re: Puplava: Gold shares to outperform bullion, and soon

Developments such as these will be bullish for gold long term, and with gold shares representing a bargain relative to both gold bullion and energy shares, investments in gold stocks at these depressed values will likely be rewarded in the years ahead.

http://www.financialsense.com/Market...2008/1029.html

"It should go up because it went down a lot."

I heard that last year about real estate...

[grapejelly]

Re: Puplava: Gold shares to outperform bullion, and soon

talking his book?

[phirang]

Re: Puplava: Gold shares to outperform bullion, and soon

talking his book?

Totally, and cites "printing money" by the Fed.

Too bad velocity = 0...

and when V>0?

FFR goes up.

[Starving Steve]

Re: Puplava: Gold shares to outperform bullion, and soon

Gold stoxx at these levels may well be near a bottom, but that does NOT mean that gold stoxx will out-perform bullion. Far from it.

And gold stoxx have risks such as energy costs, eco-nuts making trouble, injuries to workers, mine depletion, unions, labour costs, government idiots, and stock market risks whereas bullion has none of these risks. In fact, bullion benefits by uncertainty and inflation.

Finally, gold stoxx pay no dividends worthy of the name. If you have to sit and earn nothing, you might just as well sit with gold.

Another stock investment that reminds me very much of gold stoxx is casino stoxx. Some gambling casinos can make nothing but money, but their stock holders get nothing.

I can think of worse investments than gold stoxx, but gold bullion is much better as a long term hedge and even as an investment. The only major risk with gold bullion is robbery and divorce.

[phirang]

Re: Puplava: Gold shares to outperform bullion, and soon

Gold stoxx at these levels may well be near a bottom, but that does NOT mean that gold stoxx will out-perform bullion. Far from it.

And gold stoxx have risks such as energy costs, eco-nuts making trouble, injuries to workers, mine depletion, unions, labour costs, government idiots, and stock market risks whereas bullion has none of these risks. In fact, bullion benefits by uncertainty and inflation.

Finally, gold stoxx pay no dividends worthy of the name. If you have to sit and earn nothing, you might just as well sit with gold.

Another stock investment that reminds me very much of gold stoxx is casino stoxx. Some gambling casinos can make nothing but money, but their stock holders get nothing.

I can think of worse investments than gold stoxx, but gold bullion is much better as a long term hedge and even as an investment. The only major risk with gold bullion is robbery and divorce.

Mining Management tends to be technically saavy and economically brain-damaged.

See Barrick buying back hedges at the top of the gold market as opposed TO hedging at the top!

I think, honestly, the best risk-adjusted return now is with near-term producers that have raised financing... something like a Nevsun.

[mercerbear]

Re: Puplava: Gold shares to outperform bullion, and soon

I have been building a position in AUY and selling covered calls with strike prices above my avg cost per share to make a return on the shares. Just an idea.

[grapejelly]

Re: Puplava: Gold shares to outperform bullion, and soon

I do think shares *will* outperform bullion actually for awhile...because they will correct some of their spectacular crash.

[phirang]

Re: Puplava: Gold shares to outperform bullion, and soon

I do think shares *will* outperform bullion actually for awhile...because they will correct some of their spectacular crash.

Frankly, I'm waiting for DRC to end the review, and then I'll get big in Moto and Banro: best deposits in the world.

As for "risk", the locals defend the mines there, and they're better armed than anyone.

[Guest]

Re: Puplava: Gold shares to outperform bullion, and soon

Could you unpack that without the insider jargon? I assume by DRC you mean Democratic Republic of Congo, and you are referring to a specific permitting issue, but it would be a bit more "user friendly" around here to couch one's references without the racily terse acronyms and without corporate abbreviations? Produces a slightly less glossy reference, but more accessible to the hoi polloi. "Get big in Moto and Banro" leaves some room for "head-scratching".

Frankly, I'm waiting for DRC to end the review, and then I'll get big in Moto and Banro: best deposits in the world. As for "risk", the locals defend the mines there, and they're better armed than anyone.

[phirang]

Re: Puplava: Gold shares to outperform bullion, and soon

Could you unpack that without the insider jargon? I assume by DRC you mean Democratic Republic of Congo, but it would be a bit more user friendly around here to couch one's references without acronyms and without corporate abbreviations? Produces a slightly less glossy reference, but more accessible to the hoi polloi. "Get big in Moto and Banro" leaves some room for "head-scratching".

Moto and Banro are two mining co's in Dem rep of congo.

Both have great deposits, and their valuations are obscene. Moto is especially cheap..

Banro will soon be producing using heap-leech rather than a mill to keep capex low until the markets improve. Banro is depressed because of recent dilutive financing. Moto is depressed because everything sucks now.

[grapejelly]

Re: Puplava: Gold shares to outperform bullion, and soon

there are so many incredible values in mining shares that it is hard to know where to start. Some great companies selling for their cash in the bank...profitable producers.

[metalman]

Re: Puplava: Gold shares to outperform bullion, and soon

"It should go up because it went down a lot."

I heard that last year about real estate...

translation... 'we told you to buy gold mining stocks now they're shit but don't worry they'll go up again. trust us. our record is flawless'.

[phirang]

Re: Puplava: Gold shares to outperform bullion, and soon

there are so many incredible values in mining shares that it is hard to know where to start. Some great companies selling for their cash in the bank...profitable producers.

yup, and some are getting financing.

my little nevsun got $90M on the 30th in project debt(another 60M is in the offing in 09).

[Guest]

Re: Puplava: Gold shares to outperform bullion, and soon

Metalman - actually no. Precious metals mining stocks are coming up on an incredible "sweet spot" in the markets. Generally across the past decade I'd agree with you 100% and own metal rather than stocks. I own no stocks these days and am not a real stocks buff. But after the coming washout in the first couple of months in '09, the US stock market I'm betting will get a big bid from all the liquidity gushing out here, and gold of course will be in "pole position" as the senior money shadowing the USD.

Gold stocks are going to be smack in the middle of several overlapping "preferred circles". You've got the gold metal circle. Then you've got the post market crash equities markets, which will be primed beautifully for a big rally. The gold stocks are one foot in gold and the other foot in what will be totally washed out stock markets. They likely will see a massive rally. I think this coming February / March / April 2009 have promise to become the lowest risk entry point into gold stocks in five years. I think an investment in a diversified gold fund like Tocqueville Gold can return 200% in the 18 months after this upcoming market bottom.

But in broad line I agree with you on the iTulip view - don't even bother with that stuff longer term. Use the gold as an insurance position (primarily - although truth be told, some of us like to back up the truck a little bit more) and don't wander into "thorny thickets" messing around with gold equities as long term holdings.

translation... 'we told you to buy gold mining stocks now they're shit but don't worry they'll go up again. trust us. our record is flawless'.