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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: peter snowdon who wrote (20379)	9/13/2003 10:23:04 AM
From: gold$10k	Read Replies (1) \| Respond to of 39344

Peter, <<very interested to hear from those who are 20% PM or less what they are still holding and why>> The biggest part of my PM core at this point is MNP.V... for 2 reasons. 1. It has great potential leverage and its chart now looks to me the way DROOY did 2 weeks ago. 2. I haven't had a good selling opportunity (yet). <g> If the POG goes above $400, 5% in MNP could provide the same profits as having 10-20% or more in NEM. I am also still holding DROOY for similar reasons. vt

To: peter snowdon who wrote (20379)	9/13/2003 10:51:48 AM
From: que seria	Respond to of 39344

Peter: I'm partial to keeping junior explorers and using the bigger juniors and any mid- or senior-size producers as trading vehicles when I expect a turn down in the POG, as I have been expecting lately. The main reasons: 1. When POG declines, that hits hardest and fastest the companies that are valued based upon existing or (to a lesser extent) anticipated production, because the market has already priced in the value of that production. Exploration juniors without resources have not yet priced in anything beyond prospects. 2. When juniors' mineralization targets are ones that (if found) would be economic even at a lower POG, there's very little POG expectation built into the shares. You still face the (sometimes significant) way that bull and bear cycles move all stocks in the sector. But if you're going to hold some gold stocks, the key issues are which types get hit worst, and which can make you money even in the face of a flat or declining POG, or expectation of it. 3. Generally the seniors and mid-level producers will snap back first and harder at the start of any sustained POG rise. But you can always position yourself quickly in those to take advantage of it. It's much more difficult and typically more expensive to position yourself well in the juniors, which alone weighs in favor of using them for permanent exposure when you're cutting back on gold stocks. 4. Using junior explorers as your core exposure, not only can you make money in a flat or declining POG environment, but you also position yourself for LT cap gains tax rates on the biggest cap gains you'll see in the sector (junior explorers hitting paydirt). That said, I admit to being partial to no- or low-cost long collars, out of the money, on top-tier mid-level producers/royalty plays (e.g., GG, GLG, and to a lesser extent MDG and RGLD)--even if I think POG is going down. Then, it is a way to keep much of the upside exposure I may sell off elsewhere (I recently sold or reduced many positions in the resource-rich or producing or just overbought juniors). I may even buy short-term puts on the more volatile large- or mid-caps to hedge my juniors when I think POG is overdue to fall, but generally I don't like to pay premium. The tradeoff is what to me is minimal downside risk. That risk is the naked put side of the collar. I see it as low because the puts I've sold are on the stocks of excellent companies, which I'd be willing to buy and hold at the strike price because I think we're in a LT gold bull market. Obviously you want to go out as far as you can with the collar when doing that, to avoid ST price moves that could well be down (in fact, you expect that if you're putting on a long collar to offset sales of shares). If I get put any shares, it is because POG has fallen, in which case I should be able to redeploy into juniors, at lower prices, the cash I got from share sales when I put on the collar. Clearly, this strategy assumes a bull market in the shares being traded, and is intended as a means to trade the dips without giving away the upside or the favorable tax rates.

To: peter snowdon who wrote (20379)	9/14/2003 3:54:58 AM
From: crustyoldprospector	Read Replies (1) \| Respond to of 39344

"...what they are still holding and why." For the most part, que seria says it better than I would. " ..if we move into an environment where even news may have little positive impact ..." There will be plenty of folks who made profits in this latest bull run, and they will greedily pile into whatever hot news item jumps out during the next few months with the expectation of higher POG/POS "sometime" in the relatively near future. IMR, for example, should go ballistic on some good drill results. Regards, crusty