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The relative timing indicator in the VectorVest Graphics database
program has been increasing for gold in general since the first
of July. Now, the last couple of days it has trailed off some,
but the trend seems clearly up. ALTA tracks pretty closely with
the general trend and is about in the middle of the bunch. But ALTA
has another thing going for it, and that is the "relative intrinsic
value" is the same as its price, while most other golds have a much
lower value than their price, thus making ALTA a lower market
risk
based on fundamentals. Homestake has a market price of $13.80, but
a calculated "value" of only $5.00. From a market point of view,
maybe Homestake will pop more when gold goes up. But in my view it
has a downside risk to $5 or less if gold does not go up. Of course
not all things are equal, and where a company lacks in earnings, it
may make up for it in asset holdings not recognized in "valuation"
calculations using earnings and AAA corporate bond comparisons.
I know this discussion opens a bottomless pit with no good answer
when it comes to gold, but a well run company like ALTA which can
continue to post positive numbers as output and prices of its
primary product declines, help me sleep much better at night.
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