re:["I still see a disconnect and think the miners
have a very long way to catch up."]
In general, I'd agree, and I think we're about to get it.
But, costs for many of the miners have increased nearly
as fast as the gold price. Reserve and production growth,
and attractiveness as a takeout candidate will separate
the leaders from the also rans.
For example: There is absolutely no reason for any
individual investor to own NEM. It's only redeeming
value amongst it's competitors is it's deep liquidity
and market cap/size for large institutional investors.
There is still more leverage in the stocks than in
the metal - but, only if you are in the right
mining stocks.
Individual stock picking will become more, and more
critical from here on out... ie: this two year chart:
Also, gold the metal (the GLD ETF) could very easily
outperform the gold miner indicies on interim legs. Of
late, it's had less volatility on the corrections.
You can't just throw a dart at the mining stocks any more.
The mindset from here on out needs to be:
1. What catalysts are on the near horizon to drive prices
significantly higher?
2. Are there large classes of new buyers still remaining
who will be attracted into gold at higher prices by those
catalysts?
And.... you MUST be a successful market timer because of
increasing, not decreasing volatility - and ramping risk
vs. reward, as the cycle matures.
What you want to avoid on interim trading legs, and
ultimately at the end of the cycle - is to be standing
around looking at a room full of fellow gold bugs and
speculators - all stampeeding for that very narrow
exit door at the same time....because there are no
remaining large groups of new buyers in which to
pass of the bag.
You must be willing to exit, and take profits while the
fundamentals, the technicals and investor sentiment
are still strong.
...and I believe that's the single hardest thing for
most traders to do. It goes completely against how
humans are hard wired. ie: the entire "doomed by their
own DNA" reality...
That's why Vegas makes billions.
It's all about human nature and emotion.
It's not about logic, or reality.
S.O.T.B. |
