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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: the options strategist who wrote (8739)	10/4/1998 10:07:00 PM
From: Herm	Read Replies (1) \| Respond to of 14162

Jen, There was a debate in Barron's this week on the topic of gold stocks. They read my mind about the same question. Why is everyone so bullish on gold when we are heading towards de-inflation and not inflation. The growth rates show the true values for precious metals stocks. The P/E can not be justified. It seems that the only ones touting gold are the people that make a living off of it! Of course, they are going to give you a song and dance! Even a used car salesman will tell you he would let his own mother drive that car they are trying to sell you! Anyway, because there is two points of view on this sector right now I think it is a target for some rock n roll volatility as a bear trap. The fact that Barron's was not too crazy about gold right now may even move individuals to dump it just in case. To answer your question I will resort back to the W.I.N.S. approach. The stocks are ncreasing and will reverse and [w]ithdraw. Why? The technicals (tag of upper BB and very strong RSI) and the fundamentals such as the P/E vs. the growth rate. Why would you pay more than 7.5 for precious metal stocks. Would you pay $10 for a $1 loaf of bread? Well, that is just about what investors are doing with gold stocks.