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Gold/Mining/Energy : Blue Chip Gold Stocks HM, NEM, ASA, ABX, PDG -- Ignore unavailable to you. Want to Upgrade?

To: LAWRENCE C. who wrote (1253)	1/18/2004 4:55:49 AM
From: Wade	Read Replies (2) \| Respond to of 48092

Hi Lawrence, Good point. The fundamental reasons of dollar crash is huge deficits from government spending and international trading. We are continuously financed by foreigners in order to run our government and pay our salaries. What a shame. This was what I wrote on Dec. 18, 2003: <My 1-month forecast of the range of US Dollar index is 86.8 to 83.8. The most probable target is 85.3,> Message 19612341 The most recent intra-day lows on Jan. 13 and 14 were, 85.27 and 85.32. Both numbers can be round off to 85.3. You got be to amazed about this prediction to the number and to the date. After I used the chart of USDX to run my calculation again. I found that the most likely top of the rebound, if USDX is heading lower in the near future and follow the 490-day linear regression line, should be at 89.70 in 4-5 days. Then, USDX should slide down again to 86.25, followed by bouncing back to 89.33, which should be a failed rebound and USDX should continue to slide to below 85.3 in about 6 weeks, then crashes to below 80. Well. This is the best I can do to predict the movement of USDX. These predictions are just for my own entertainment. I also believe that POG is going to de-couple from USD in about 3-4 months and rally against all currencies. Take a look at rand gold price: stockcharts.com[w,a]daclyyay[df][pb50!b200][vc60][iUl14!La12,26,9]&pref=G There are three fundamental reasons for me to continuously buying GFI during the decline of GFI and the rest of the gold stocks. The first, is the rand gold rally, which just broke out its 6-month high (~3000 rand/oz). In fact all of the S. A. golds should rally instead of following POG, which is based on USD. The second reason is that GFI is way under valued. If Barron's think NEM is too expensive, they should write about the really cheap GFI. This stock is traded at trailing P/E value of 16.6. Its ROA and ROE are 15.3% and 25.8%, respectively. It has extremely powerful earning strength comparing to any US stocks. It also pay 1.98% dividend. It would be a P/E 50+ stock if it is an US gold mining company, considering that NEM has P/E 40 and 6.3% ROA and 7.4% ROE. GFI's long term stock price chart shows that it has been trying to break out its 2-year high at 17.15, only got knocked back due to strong Rand. In any rate, this stock is still very cheap despite the widely spread misconception that SA gold mining companies don't make money due to high labor costs and poor earnings. This is completely untrue in this case. GFI had lower earnings only when that was compared to its historical earnings, not to the US stock market. This is the reason why I am bullish about GFI when rand gold is making its way up again. This stock is going to rocket like a junior when rand gold breaks out to the new high which is at ~3500. The third reason is that GFI is using its earned cash to expand its mining activities all over the world. Recently, they are at China, Australia and Peru. GFI is becoming an international mining company, which will reduce the risk of single currency exposure. BTW, GFI is the largest component ( 33.2%) in ASA's (S. A. PM mutual fund, traded in NYSE) holding. This tell me something about its value. It is a bluest blue chip gold mining stock, imho. I will add more shares next week, especially if it gets knocked down again. Furthermore, if every one hold back buying gold and wait for some one to support POG at $395, then I don't think $395 can hold. I will bet the bottom to fall off. This is exactly the same reason if we all sit around and wait for the suckers to buy at $470. If we really believe in gold we should buy one oz gold coins for each of our loved ones. Good luck to all. Wade