Investors do not purchase gold stocks because of low pe's, cash on hand or any of the other usual fundamentals that can be applied to investing in most other equities.
Ok, but that is only part of what goes into valueing a gold company.
Buyers of gold shares want leverage to an increase in the price of gold during periods of uncertainty.
Buyers of gold shares want returns on investment. Anyone suggesting leverage, safety, preservation of capital; is lying. Leverage would best be done in currencies, safety into cash {or gold if you are so inclined; which is really a currency hedge}, and to preserve capital: CASH is king.
This move on friday was, amusing to say the least. It goes to show that many here, and elsewhere make a direct connection between: no further hedging; and closing a hedge {when none exist!!!!} The ironic part is, that what occurred in Sept and friday, is still playing into the hands of the shorters'. When I said that before, gold was at $329. Gold then found a way to fall to $275 {-$54}
Hutch
I know what I'll be shorting this week |
