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Strategies & Market Trends : Fidelity Select Sector funds

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To: Julius Wong who wrote (4396)	4/24/2002 8:54:29 AM
From: Dan P	Read Replies (1) of 4916

Julius: Intersting comments on the gold funds: basically no interest in them by the investing public. haven't checked lately if any money has moved into FSAGX. from "Bob Bishop's market letter" Dan ***********************************************************  An old friend told me over the weekend that his election of a gold fund option in his company retirement program produced a 55% return over the past four months. He also told me that the option was being eliminated in the program he was in, not because it wasn’t working—it trounced all other options—but because fewer than 1% of the people in the plan had opted for exposure to gold shares. Despite its superior performance, the gold fund option was being cancelled for lack of interest.  At the recent Atlanta Investment Conference, the story was told of how invitations had been extended to two of the top performing gold funds, and of how each declined to participate. The reason? Gold funds are receiving almost no new money, and as a consequence, the funds do not yet have marketing budgets that would have allowed them to participate. The clear message of no new fund flow is that people don’t believe the gold market is for real. I could go on, but I trust you get the message: gold and gold stocks are the Rodney Dangerfields of the markets. In spite of 15 months of superior performance, gold and gold shares still can’t get any respect. Based on earnings and on what they sold for not long ago, I’m not about to tell you that gold shares are on the bargain counter. What I am going to tell you is that recent market action and a long list of changed market fundamentals suggest that both gold and the shares are on the cusp of becoming much more expensive. My distinct preference would be to own all the gold shares I could before, not after, a rising gold price has further revalued the sector.

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