your view of gold miner stock appreciations will be interesting to observe in the next two years
I mean this respectfully
your view is based upon reason, fundamentals, logic
gold miners will be valued instead on reserves locked in ore, and liquidity flows out of mainstream stocks
in the next two years, I expect for many gold juniors to exhibit behavior reminiscent of 1990 dotcoms
e.g. EBAY, AOL, Netscape, AMZN, CMGI, INKT
valuation imho will be out of proportion with earnings, and for a very solid reason
production has been held back and withdrawn intentionally
the prime reason is suppressed artificially low gold price
miners who withhold the most will be rewarded the most
initially those like Newmont (NEM) will be rewarded the most, since their productiion is the greatest
they made a critical error in acquiring a hedgebook imho
this forced them to ramp up production despite low prices in order to satisfy and deliver into that hedgebook
just when they should have allowed production to wane
but the bigger effect will be liquidity
this will become a phenomenal ascent after the bond market clearly tops out and begins a decline, as the entire western world will simultaneously find no alternatives to CASH AND GOLD
cash is and has been an impostor to money, more structurally defined as denominated debt
gold is real money, has been for centuries, and just like the calls for a New Economy, all this Fiat Currency will experience moth-eating erosion
as Western Govts simultaneously debase their currencies, the effect on their bonds will be felt
for about 14 months now the real rate of return on shorterm Trez bills has been zero, while some argue it has been negative
this historically has been the sentinel signal for Gold to ascend for several years in a reversal of longterm trend
the breakdown of the Bond Rally is the next critical ingredient
the gold miner sector contains a mere $70B in mktcap
with trillions coming out of bonds in the next two years, we are in for some liquidity driven valuations in miners
surely bond money will continue to attempt to restart the bond-stock cycle, but I expect it to fail on multiple attempts
initially a small amount of money will enter miners, then increasing amounts as stocks & bonds both falter
guys like you will be employing sound thought processes
if you enter the miner stocks, you will exit in the 4-5th innings of a 9-inning game
I want to observe your reaction
because you are from a very competent OLD SCHOOL
/ jim |
