Blue Chip Gold Stocks HM, NEM, ASA, ABX, PDG Message Board

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Gold/Mining/Energy : Blue Chip Gold Stocks HM, NEM, ASA, ABX, PDG

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To: Exsrch who wrote (423)	6/27/1999 3:43:00 AM
From: Wade	Read Replies (1) of 48092

Exsrch, I have been longing ABX for over three years since it was below $10 and I actually replaced all of my HM and CDE holdings with ABX last week. I have no plan to sell ABX at all. But, it does not dilute my bearish view of POG since about 3 months ago. I am in ABX for value and growth as you do. But, I am very concerned about the future of gold stocks including ABX. I know ABX has about 3 years production hedged for higher prices. However, you have to think about they still have to hedge continuously for future gold beyond those 3 years production as the dates move on. The only reason they can have people to buy gold at much higher prices is those people believe that POG could rise in the future. What is the premium will those people willing to pay if POG continue to slide if more central banks announce to sell gold? If gold lost importance as currency then it will be treated as a commodity which will be determined buy supply, demand and cost of production. I can see gold is at a very dangerous situation to become a commodity. If that happens ... all of the goldbugs will be slaughtered. If POG continue to fall all of the mineral reserve worth for mining will shrink very rapidly. ABX still can lose big value from calculation of its reserves. It is important for us to know the role of gold in the views of central banks in the next 20-30 years. I agree with you that eventually the truth will come out. But it could be either way. But..how long? May be only very few people really know the truth. In fact, we are all dead "eventually". How should I play gold stocks in my life time? I think it is better off not to think about the ups and downs of POG. I have two plays, the first one is in ABX as we all did. The second one has more fun, less headache and use much less cash. I will buy a few best junior gold mining stocks and keep them for a very long time. Those stocks are dirt cheap and you can buy them by boat loads at very low costs. If POG went down so low all of the juniors will go bankrupt. These stocks are worthless and I know the worst case up front. I will only bet what I can afford to lose. If gold rockets back to $385 or over $450. Those juniors will give more than 10 times of return. This is my another play. I believe many people are doing so already. Of course I wish POG to go back up again from the bottom of my heart. Good luck. Sincerely, Wade

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