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

To: Art Bechhoefer who wrote (21003)	10/31/2002 12:33:20 AM
From: gold$10k	Read Replies (2) \| Respond to of 36161

Hi Art, Based on the idea that "equities are not doing well, so gold and gold shares should do well", gold and gold shares should have done well both this past summer and the previous summer. They did not. You wrote "If one assumes gold prices will remain at current levels or move up slightly, wouldn't gold mining companies with low production costs be a reasonable safe haven, at least until investment funds start adding to equity positions?". Clearly they have not been for the past 5 months, primarily (IMO) because they had been bid up during the previous 6 months. Were they overvalued and by how much? I neither know nor care because both the seasonal cycles and the technicals told me that the rally was (most likely) over. I did not play this market perfectly, but I feel that my attention to cycles and technicals helped me to make and retain some nice profits. I disagree with your statement "Among tech stocks, almost the only significant rises in recent weeks have been war horses like IBM." QQQ is up 25% and SMH almost 40% from the lows of 3 weeks ago. RUT is also up 15%. In the long term, I believe that fundamentals do matter and that true investors will see to it that they do. But in the short and medium term, I believe that traders control the markets, buying and selling on no other basis than "is there a reasonable likelihood of making a reasonable of money within a reasonable amount of time with a reasonable amount of risk?"... I know that I do. I feel the need to comment on the unusual nature of our discourse. This is perhaps the 3rd or 4th time that you have asked me questions based on fundamentals and that I have answered you based on cycles and technicals. I don't mind explaining my reasoning as it also benefits me by clarifying my own thinking, but I hope that you don't expect that at some point I will explain my buying and selling in terms of fundamentals. Your questions are quite good ones, but run at right angles to my view of the markets. Regards, vt

To: Art Bechhoefer who wrote (21003)	10/31/2002 12:00:11 PM
From: Jim Willie CB	Read Replies (1) \| Respond to of 36161

your view of gold miner stock appreciations will be interesting to observe in the next two years I mean this respectfully your view is based upon reason, fundamentals, logic gold miners will be valued instead on reserves locked in ore, and liquidity flows out of mainstream stocks in the next two years, I expect for many gold juniors to exhibit behavior reminiscent of 1990 dotcoms e.g. EBAY, AOL, Netscape, AMZN, CMGI, INKT valuation imho will be out of proportion with earnings, and for a very solid reason production has been held back and withdrawn intentionally the prime reason is suppressed artificially low gold price miners who withhold the most will be rewarded the most initially those like Newmont (NEM) will be rewarded the most, since their productiion is the greatest they made a critical error in acquiring a hedgebook imho this forced them to ramp up production despite low prices in order to satisfy and deliver into that hedgebook just when they should have allowed production to wane but the bigger effect will be liquidity this will become a phenomenal ascent after the bond market clearly tops out and begins a decline, as the entire western world will simultaneously find no alternatives to CASH AND GOLD cash is and has been an impostor to money, more structurally defined as denominated debt gold is real money, has been for centuries, and just like the calls for a New Economy, all this Fiat Currency will experience moth-eating erosion as Western Govts simultaneously debase their currencies, the effect on their bonds will be felt for about 14 months now the real rate of return on shorterm Trez bills has been zero, while some argue it has been negative this historically has been the sentinel signal for Gold to ascend for several years in a reversal of longterm trend the breakdown of the Bond Rally is the next critical ingredient the gold miner sector contains a mere $70B in mktcap with trillions coming out of bonds in the next two years, we are in for some liquidity driven valuations in miners surely bond money will continue to attempt to restart the bond-stock cycle, but I expect it to fail on multiple attempts initially a small amount of money will enter miners, then increasing amounts as stocks & bonds both falter guys like you will be employing sound thought processes if you enter the miner stocks, you will exit in the 4-5th innings of a 9-inning game I want to observe your reaction because you are from a very competent OLD SCHOOL / jim