Precious and Base Metal Investing Message Board

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Gold/Mining/Energy : Precious and Base Metal Investing

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To: Gary H who wrote (20874)	9/22/2003 12:56:52 AM
From: Elizabeth Andrews	Read Replies (3) of 39344

You don't short a stock because it's too high because that is impossible to define. You short a stock because the business plan is baloney. The bet on the short side is that the business can't or won't return the invested capital at a rate that is greater than the opportunity cost of money. With money at 1% that is generally a bad bet on any company. With negative real returns, which currently exist it is particularly a horrible bet on any precious metal related security. Recently, I said that IVN was overvalued at C$4.50. It was "too high" It probably was but the stock is now C$7. What is too high? The business that IVN is in is in vogue and strange things happen to valuations. How many people who know zero about the market have told you to buy IVN? I know something about valuations and I told people to sell it. It is more than valuations and timing.

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