Barrick Gold (ABX) Message Board

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Gold/Mining/Energy : Barrick Gold (ABX)

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To: Enigma who wrote (3237)	1/4/2003 10:54:16 AM
From: tyc:>	of 3558

>>their hedging policy is difficult for the layman to understand Yes but the layman certainly understands the risks of holding gold ! What proportion of his assets do you suppose the average man allocates to gold ? Why so low ? Simply because of its risk ! Barrick is my choice of gold producer because it hedges? I see it as a form of diversification. Part of the gold in the ground is sold in advance and the proceeds of the sale are invested in bonds. Thenceforward, the company is mining gold and bonds. What could be simpler ? The bond element yields to the company a bond return at the lower risk associated with bonds. The (unhedged) gold element will no doubt produce a higher return but at greater risk.... the amalgam is a stock with perhaps lower returns than an unhedged producer, but also less volatile (i.e less risky). It satisfies me, and that's what counts.

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