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Gold/Mining/Energy : RANDGOLD and EXPLORATION (RANGY) -- Ignore unavailable to you. Want to Upgrade?

To: baystock who wrote (311)	3/15/1999 2:19:00 AM
From: baystock	Respond to of 448

Some thoughts from a South African gold guru, Nick Goodwin. He likes both DROOY and RANGY in his speculative portfolio: moneyweb.co.za Interview with NICK GOODWIN - Friday, 12 March 1999 AH: Welcome to our gold guru, Nick Goodwin of Fedsure Asset Management. Nick, last time you were on this programme which was on the 19th February - so we're getting to back to our pretty much once a month call - you said, I think, those people who are following me are starting to learn what cold sweat means. Well it's been anything but cold sweat in the past week, or in fact since the beginning of March. The JSE all gold index up almost 20% - how's your portfolio been doing? Nick Goodwin: I think the portfolio that I recommended way back in November has gone up 7% by this point in time. AH: It turned around after going through. Nick Goodwin: That's right it turned around and I think what's nice about the cold sweat is when the market runs the ecstasy is far greater than the agony so it really makes up for it. Because a gold market can run so fast that within a few weeks, two to three weeks, you can make up all those losses that you had in the past. And it's far more volatile than the industrial index and can out-perform it very quickly even though you have to wait so long. So again patience is the name of the game in this and you must actually buy when the market's weak as opposed to trying to chase it up. AH: So don't buy now. If you haven't bought yet can you still buy? Nick Goodwin: Yes I think it hasn't actually run up that much yet. I still think there's potential to about 1200 on the index, so you can still buy. But time is running out and I think later on I'd like to actually give you a speculative portfolio as well as just reinforce the original low-risk portfolio. AH: Before we get to that. The performance of the bullion price itself. It reached it's highest fixing for the year earlier in the week and it's been holding around about the $292 and $293 level - what is the actual figure that we should watch for, for the bullion price to break through that is going to mean time to smile again? Nick Goodwin: Well the level most recent was $290. It's gone through that, that's where the 200 day moving average is at. That's a very important level, in fact world-wide they would watch that level. Also the moving average is actually flattening now and I think if the price moves a bit it could start picking up, which would indicate a major break on the gold price. Then the next resistance was $293,30 which it's actually been through, we've been above $294 and it's sort of come back now, and thereafter it's $298 and then $305. If we can get to $305 it will go to about $315 and that will really push the shares substantially. But the pattern that the gold price has formed in the last year is very encouraging. It's actually a reverse head-and-shoulders for those technical analysts who understand that, in that you had a low in January and then you had a point lower than that about in August, and now a point higher. So that pattern is actually very positive I would say for the gold price. AH: In mid-December coming up to early January we had a nice run in the gold shares but then they dropped back a little bit, it proved to be a false storm - is it possible that this run we've had now could be of the same type? Nick Goodwin: I think the shares don't just run all the time. You'll get some running say for three or four days, then you'll get a settlement for maybe one or two days and then you're ahead again. We could probably see a settlement say Monday/Tuesday and then a move again. But every time the shares weaken that's when you must add to your portfolio. AH: Let's go through those portfolios right now. The solid Nick Goodwin portfolio that's up 7% since November. Nick Goodwin: I haven't actually changed it. I've still got Gold Fields at 40% and the Anglo Golds at 20%, Harmony at 20%, Randfontein at 10% and JCI Gold at 10%. And then in terms of the specs portfolio which is the first time I've actually mentioned this, I've got Durban Deep at 25%, Rand Gold at 25%. Kalgold at 20%, Harmony Options at 10%, Avgold at 10% and the Gold Fields warrants at 10%. Now there's two warrants there, there's the 3GFL warrants, which is the Standard Bank warrant which expires in September this year, and then the 1GFL which is the DMG warrant which expires in June next year. Now 1GFL is safer than 3GFL but it's not as geared. If the market runs, 3GFL will run much faster than 1GFL. AH: So if it's speculative go with 3GFL. Nick Goodwin: I would say so. But you've got to understand about specs, I don't want people to take all their money and stick it in specs. Normally you would put 10 to 15 per cent of your money in there and if you're a real gambler, if you're someone who goes to Sun City or nowadays to all the other casinos, then you could perhaps put a bit more. But you must understand that in the spec portfolio you can lose your money. AH: So it's money that you would put onto a "Horse Chestnut" or perhaps not a "Horse Chestnut" as the odds are too short. It's in fact even more of a gamble than a "Horse Chestnut". Nick Goodwin: If you get a big run in the gold price that spec would perform phenomenally - could go up by 500%. AH: Well there you have it. You have Nick Goodwin's solid portfolio, the one that we've been sitting with since November and for those extra few.