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Microcap & Penny Stocks : Tokyo Joe's Cafe / Societe Anonyme/No Pennies -- Ignore unavailable to you. Want to Upgrade?

To: DebtBomb who wrote (3792)	9/11/1998 8:54:00 PM
From: Thumper	Read Replies (1) \| Respond to of 119973

Like I said -have at it-the Religious Wrong lose out either way!!YUCK YUCK!!

To: DebtBomb who wrote (3792)	9/12/1998 3:07:00 PM
From: The Street	Read Replies (2) \| Respond to of 119973

OK, let's start some serious DD on Gold Stocks. First, Gold stocks will outgain physical gold on a rally. The point being that most mines have a fixed Cost of Production (CP). So, let's say gold goes from (round numbers for simplicity) $400 an oz. (not pot-- the metal) to $420. Let's say, XYZ's CP is 300 an ounce. That is a FIXED cost. So, at 400/oz their profit is 100/oz. If, 420/oz then their profit is 120/oz. An investment in physical gold (excluding Broker fees and storage) would return 420 - 400 = 20/400 = 5% But, the Net Profit-- which goes DIRECTLY to the bottom line, for the Gold Company goes from 100 to 120; so a 120 - 100 = 20/100 = 20% increase in the bottom line for a company. Now, let's assume the industry PE ration is 10 for Gold Companies. Investor A buys $10,000 worth of physical gold for 25oz's. Investor B buys $10,000 worth of XYZ at $20/share for 500 shares. Gold goes from 400 - 420 (5%) A = Investment value of: $10,500 B = Investment value of: $12,000 (10,000*20%) Gold goes from 400 - 500 (25%) A = $12,500 B = $20,000 (Because profits doubled as did stock price.)