Re Hedging. What I meant is that Barrick future profits are limited. They are in no trouble but they wont show great earnings either. And unfortunately, the market do not like them.
I would not underestimate Barrick cashflows, unless you think their production woes will continue. Their hedging book cannot hurt their cashflows, just the bs accounting of the off balance sheet items which even revenue canada ignores,...it is an imaginary number. Watch the cashflows,...you used to be a big proponent of cashflows in mining,...what happened?
It is true, the goldbugs do not like Barrick,...but that suggests that the market is still narrowed to goldbugs,...and for the gold bull to truly roar, you have to have more than goldbugs participating in the advance.
Re lawsuit. Time will tell. I understand from a good source that the thing might not seem as frivolous as the naysayers are suggesting.
I would question this source,...there is no case. You cannot sue a sovereign state for selling off their gold reserves, anymore than you can sue them for accumulating them in the first place,...that already has been thrown out of court. You cannot sue a corporation for taking advantage of something sovereign states do, and in the process locking in a floor price for their future cashflows on a portion of their sales. JP Morgan is the counterparty of about an eighth of Barricks hedgebook. There are at least seven other bullion banks involved, and many soverign states. Question Barricks hedging, and you question all hedging of any kind. Keep in mind many other gold companies did exactly the same thing, including many who now claim they are anti-hedging even though they still carry significant hedgebooks. At least Barrick doesn't try to hide behind bullchit.
The lawsuite is frivilous,...and Barrick will wup their arses,...and I would like to see a few gold ANALysts get their arses wuped too, because from my viewpoint they are no better than the internut pumping trash of a few years ago. Pump tech, pump internut, pump biotech, pump dow, pump dividends, pump oil and gas, pump gold,...pump whatever you can sell.
The chart tells the story,...but the story ain't finished,...what goes up, always comes down,..inflation adjusted (gggggggggg) |
