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Gold/Mining/Energy : Precious and Base Metal Investing

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To: russwinter who wrote (20885)	9/21/2003 6:28:52 PM
From: krishnamurti888	Read Replies (2) of 39344

<<My primary point is that we've ALREADY HAD a great bull market in gold stocks for nearly three years. Sure, it's been stealthy, and has had a couple big corrections, but 500% is 500%, and I would define that as a "big bull market", not an "early transition" from a bear market.>> That is undeniably matter of fact, however, our gold bull market has only seen gains of 50% from the low, which makes it's return seem rather pedestrian in comparison to the HUI. However the gold equities, are really no more than options on the gold price and as such it is not so extraordinary for options to benefit by up to 10X the underlying. I would make the observation that many of the gold stocks were priced, at their low point, like options with very little call time left. This was clearly an 'error' of the market or an 'opportunity' for those who bought at the low. Furthermore I would argue that at $400 gold there are many gold stocks which offer compelling absolute return valuations (GBU is a case in point) and there are many relative value plays still left (for example a WHT looks very interesting compared to a MDG or GLG).

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