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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Wyätt Gwyön who wrote (3470)12/16/2003 3:53:15 PM
From: ild  Read Replies (2) of 110194
 
IMHO gold stocks are no longer cheap. Some are quite expensive. OTOH they are in a bull market, so big dips should be bought. All last year I've been selling naked puts on dips and covered calls on rallies. Did OK even on stocks like AEM and GFI. Recent volatility has increased premiums so I continue to play this game. I usually sell OOTM for 6-8 months out time frame.
When people see that gold MuFu are the only ones with 3-year 30+% returns they think that gold MuFu may have a place in their portfolios. Also many MuFu money managers may want a little bit of gold stocks in their holdings to show that they are "in the game". All that creates support. In big market downturn I expect gold stocks to cave as well. Also in regards to POG we've had only bear market in USD not the real bull market in POG.
From Heinz:
<<<Date: Tue Dec 16 2003 12:55
trotsky (Gedlo, 12:00) ID#377387:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
i agree with the rate argument actually...that's why i said 'short term'. no doubt at least some of the money chasing gold related investments is based on inflation expectations...and when those appear not to pan out, some selling may be based on that. but i really don't know for sure...sometimes it's just a few newsletter writers giving out 'sells'. certainly the gold timers are not exactly bullish according to Hulbert. this is of course bullish medium term, but can likewise have short term bearish effects. >>>
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