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

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To: tyc:> who wrote (105089)	5/29/2001 3:57:15 PM
From: pater tenebrarum	Read Replies (1) of 436258

basically, the calculation is not different from other present value of future income streams calculations...it depends largely on interest rates. in the case of gold one has to also consider the gold lease rate and the resulting contango. however, a) a few important variables are missing (for instance the characteristics of the reserve in question) and b) this type of mechanical discounting is not really going to tell you if the asset is worth buying. the price of gold doesn't stay still after all... and i agree there's an option value aspect here. that's inherent in all claims on gold in the ground.

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