I'm watching LT trend lines on all SA POS-s AU is in part
Australian, I think, about 40% SA-based. GFI, HMY, and the POS
all knocked on long term downtrend (from 2002). I'm not sure
why these technical lines have such enormous influence, but
they do. For example, KGC sat under important level of 12 for
a long time, and then it simply took off. Fundamentally they
look a whole lot better than they did in 2004-2005. The POS
of all POSes, DROOPY, actually started to make money in 2007,
got rid of all hedges and debt, etc.
A break of LT downtrend happened to the POS in 2001-2002, and
you can see the result. The key to their undervaluation is
their high cost deep mining operation and the high
price of energy in gold, which is bound to change in a mania.
Gold/oil ratio has been as high as 30 in the past. The higher
the ratio, the more money miners will make. Note how Oil
consistently hovered around 40% higher than average, in
gold, over the past decade. Last year it actually was undervalued
for a brief moment. This does not automatically translate
in higher profits, as utility companies will rarely drop
their rates. They charge because they can, especially in SA,
it seems. This was the key reason miners "lagged" gold - this
affects their margins.
pricedingold.com
Our POS knocked on LT downtrend line in May, and before that
in February/March. As silly as it sounds, it could become
even more ridiculously cheap until that 9-10 line is taken
out. p/e = 10? Sure, why not? Does it matter? No. The Spoos
have p/e over 100, and soaring -g- |
