<plan/review of the 4 major sectors of gold stocks.
I still see it as a quest to find the best candidates in the low cost "top quartile" production class regardless of sector. But, the producer sector in that class is overpriced IMO as are the producers in the next higher cost class. The hedger (insurance company) sector is a pariah, although there may be a play if someone like PDG or ABX suddenly announced they were quickly getting out of hedging like AU appears to be doing. Still with their attitudes, I wouldn't bother to speculate on that. I have no interest in high cost production and SoAf golds, but it seems to be working as a play.
Then we have the advanced staged companies (buying opportunity of a generation, etc, etc.) that I begged everybody (often to a mostly empty audience) to buy last year. I'm starting to see them as fairly priced, but not outright sales. I'm gradually reducing my enormous exposure (just sold 10% of my ELD position a minute ago as it went LT today, have another 10% on 4-29, etc), which is natural if you have my luxury. For people looking to get in, I'm not sure what to say? In that sector MAN and GBU appear to be decent bargains. And yes, you are correct, the sector will have leverage to POG.
The real yeoman work, which really isn't being done very much because it's difficult and riskier, should be in the grassroots field trying to find financially backed good exploration teams and properties at nominal valuations. That's where I plan to focus most now. |
