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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: timers who wrote (62607)	1/29/2001 12:43:02 PM
From: Archie Meeties	Read Replies (1) of 436258

Mining stocks do best (as in reach higher valuations) when the pm rise steadily and slowly. In swift, severe rises, like sept. 99, metal stocks struggle to keep up with the actual physical metal. Given the short position in Ag/Au t we're going to get more of the latter, and you'll do well with the physical. The other point is that you hold physical gold because of a threat of an extreme crisis - think bank closings, market closings, brokers going busto, etc... It's the little bit of insurance that nobody has an obligation on. There's always the unforeseen with a mining stock. For example, this Cali thing could really raise the cost of mining in West - you already see that PD will probably close down some copper mines and one of Homies Cali's mines is seeing their costs rise $10/oz. What if you held a mining stock with great leverage to higher silver, only to see the cost of mining outpace the rise in silver? One last thing. If everybody said to themselves "I'll buy my gold insurance in the form of paper gold" then gold would never rise, and miners would eventually be dumped as the pog fell. Fortunately, those that buy gold haven't fallen into this trap.

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