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Strategies & Market Trends : Roger's 1997 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Russian Bear who wrote (7573)	11/27/1997 7:12:00 AM
From: John Hunt	Read Replies (1) \| Respond to of 9285

RB & MC re Barrick Gold, Here are some Barrick statistics from their www site for the end of 1996 to mull over with the turkey: Barricks average cost for 1996 was $193 per ounce barrick.com Barrick's hedged price for 1997 gold averaged $420 per ounce barrick.com Have a great holiday. John

To: Russian Bear who wrote (7573)	11/27/1997 10:38:00 AM
From: vegetarian	Read Replies (1) \| Respond to of 9285

>>Barrick is a fine company. About a year ago, I had a very substantial position in Trizec-Hahn (then Horsham,) a holding company that is ABX's parent, in a way. I have not been following ABX of late, but I do not think they have changed their basic approach to the mining business in the last year. As I recall, ABX was completely hedged against adverse movements in the price of gold for the next several years. Using forward contracts, ABX locked in a number of years of anticipated output, at a price of $400 - $425 per ounce (the numbers are from memory, but I'm pretty sure that is the range.) Additionally, ABX is a low cost producer, with costs of $225 - $250 per ounce (again, from memory.)<< ABX is probably a good company, the following comments are in order: -A short sale is not always established because the company management is bad, it is but one of the reasons -A short sale may be established if the sector itself is in a bad shape with no hope of recovery in near future, as gold currently is; and if ABX is a great company as you say its performance only confirms that the gold stocks are in a bad shape -Recent news coming out of Europe Australia and other central banks indicate they have no interest in gold and may likely try to sell their holdings -ABX may have been hedged, but that does not look "complete" to me now, a look at its chart will confirm that -Just because a company is well managed and that one had good experience with it in the past should not prevent one from shorting it in the future -With short positions and options usually a short to medium time span is desirable (because so many things can go against you over a long period) so the short term future for gold does not look very appealing to me -I have not shorted it and will do so only if it gets a bounce, if you want to go long with gold stocks at this point, I hope you have a good justification other than the company has done well in the past and is well hedged (all such companies dealing in commodities need to hedge themselves); good luck