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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (16904)	8/5/2002 4:32:08 PM
From: Louis V. Lambrecht	Read Replies (2) \| Respond to of 36161

Not only is the XAU below 200 DMA, it also prints below 400DMA. I also rule as possible a technical correction of the PoG towards 295, it then would be below (down sloping) 200DMA and further correction could not be excluded. I am not as bullish as you are for the HUI. If XAU tanks, people who entered this rally late will make no difference between hedged and non-hedged. IMHO, they'll sell all. BWTHDIK As I also expect PoG @350 with the next rally, I am waiting for a re-entry. (Maybe stoopidly).

To: Jim Willie CB who wrote (16904)	8/5/2002 8:01:50 PM
From: Sharp_End_Of_Drill	Read Replies (2) \| Respond to of 36161

Jim, why would you expect a large hedge position to result in loses? Why would it blowup? Assuming they hedged at a level that allows a profit (and why would you do it any other way?) they won't lose anything but the opportunity. Say my production costs are $280, and I've hedged away production at $285, I still make that $5. Somebody else makes the difference between spot and $285. I would like to hear your explanation as I've heard this story of hedge book disasters from many sources. Sharp