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Gold/Mining/Energy : Barrick Gold (ABX)
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To: ForYourEyesOnly who wrote (1416)10/19/1999 12:34:00 PM
From: goldsheet  Read Replies (1) of 3558
 
> Barrick is well known as having the biggest short position in the world.

"short" is when you sell something you don't own in the hopes it will go down in value. Forward sales, along with puts and calls, are perfectly legitimate financial transactions to control future revenue streams of a volatile commodity. Barrick has the gold in reserves and has demonstrated its track record to convert it to production. They can meet forward sales committments.

I do the same thing with several stocks I own. I hold shares in a dividend reinvestment plans, which take time to buy/sell, effectively a reserve asset. When the stock get to what I consider a high price I short shares through my broker, which balances out my portfolio, and reduces my risk. If you only look at half of the picture it looks like I am short, but if you look at the whole picture you can really see the entire objective.

Barrick is long 51 million ounces of reserves, has hedged 14 million ounces, for an effective long position of 37 million ounces.
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