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Strategies & Market Trends : Ride the Tiger with CD -- Ignore unavailable to you. Want to Upgrade?

To: tyc:> who wrote (61681)	9/19/2006 3:23:25 PM
From: Claude Cormier	Read Replies (1) \| Respond to of 313046

Tyke, What you want to hedge is this portion of the stock of a junior gold that is affected by the price of gold. One cannot hedge the risk of bad exploration results except by selling the stock. When nothing has changed in the big picture of a junior other than the mood of the market influenced by the downtrend in the price of gold, then why sell the junior. Although it is not as easy as in a bull market, some juniors will perform very well given good progress on their properties. That is why we buy juniors, because they can increase their value by adding mineral assets through exploration. It is another ball game for those who play "momo" stocks. And of course, I would consider holding juniors through a period of market correction ony if they have a solid balance sheet that will limit their need to finance in a down market. So using a gold index like the HUI or XGD, or even a stock like Newmonth will accomplish that role of hedging. In other words, if you need to trade, trade senior golds or in the money options on gold indexes or senior golds. Of course, there comes a time when a junior has reach maximum value...then you sell if you still own it at that time. My opinion and that is the strategy I am trying to stick with.