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Tim Price And Don Coxe: "We Have Entered The Most Favourable Era For Gold Prices In Our Lifetime”

Tyler Durden's picture





 

Submitted by Tim Price, Director of Investment at PFP Wealth Managmenet, courtesy of Sovereign Man

We Have Entered The Most Favourable Era For Gold Prices In Our Lifetime

Acclaimed screenwriter William Goldman (The Princess Bride, among many others) famously began his autobiography with three telling words: "Nobody Knows Anything."

The same logic would seem to apply to much conventional reporting of the financial markets. Any investor looking for informed analysis of market developments can therefore save themselves a few minutes every day by choosing not to read any of the 'Companies and Markets' section of the FT, which typically constitutes a fantastic piece of fiction.

(If there is a more thankless task in finance than trying to explain why certain markets did what they did yesterday, we don't know what it is... unless it's working in the PR department at Goldman Sachs.)

But as Soc Gen's Dylan Grice has frequently pointed out, human beings are suckers for stories. We seek meaning from just about everything, and financial markets are no exception. Why else would otherwise rational people shell out ~£2.50 every weekday just to read a selection of vapid and contradictory speculations about recent market price action?

At the risk of going out on a limb, here is our own inherently subjective "take" on the current market environment: Investors seem to believe that the euro zone debt metastasis has gone into remission. There is an uneasy calm to both equity and bond markets -- it feels like the calm before the storm.

Both Goldman and Barclays have issued research notes recommending equities over bonds. It is certainly difficult to get excited about G7 government bond markets except from the perspective of shorting them. As Stratton Street recently observed, there are over $10 trillion in marketable US government securities, yet their average yield amounts to less than 1%.

But it might yet be dangerous to adopt Goldman's binary response which is to advocate blanket support for stocks. This is not a black vs. white issue; just because most government bond markets are uglier than sin does not automatically justify going 'all in' on the stock market, even as deposit rates remain painfully thin.

We nurse an ongoing fear that equity markets are being largely supported by the inflationist antics of central banks. This may have led to many investors becoming addicted to the effects of cheap credit, and they may not like it when cheap credit is ultimately withdrawn.

But whatever is driving equity sentiment, there are undoubtedly pockets of value for those with the stamina and patience to embrace them. In Don Coxe's latest and typically excellent letter, "All Clear?", he highlights the opportunity in precious metals mining companies:

"If there were one over-arching theme at the BMO Global Metals & Mining Conference, it was that the gold miners are upset and even embarrassed that their shares have so dramatically underperformed bullion...

"On the one hand, they were delighted in 2011 when it was reported that since Nixon closed the gold window, a bar of bullion had delivered higher investment returns than the S&P 500 for forty years-- with dividends reinvested. But some gold mining CEOs find it an insult that what they mine is more respected than their companies' shares...

"In our view, we have entered the most favourable era for gold prices in our lifetime, and the share prices of the great mining companies will eventually outperform bullion prices."

Gold remains one of the most widely misunderstood assets in the investible world. Indeed, it may be better to refer to it as a means of saving that does not expose the saver to counterparty or credit risk or to the depredations of the monetary authorities.

As Don Coxe makes clear, governments are running deficits "beyond the forecasts of all but the hardiest goldbugs five years ago; central banks are printing money and creating liquidity beyond the forecasts of all but the most paranoid goldbugs a year ago."

The choice for the saver is essentially binary: hold money in ever-depreciating paper, or in a tangible vehicle that has the potential to rise dramatically as expressed in paper money terms.

Gold prices have now softened, offering investors yet another chance to get back on board what is perhaps the most compelling form of money- and portfolio insurance available.

Why large cap gold miners are being so undervalued by equity investors relative to gold is an open question that takes us back to the realms of stories. That the discount exists is undeniable; all that is required to crystallise that value, we believe, is patience.

 


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Mon, 03/26/2012 - 13:17 | Link to Comment devo
devo's picture

Why large cap gold miners are being so undervalued by equity investors relative to gold is an open question that takes us back to the realms of stories

  1. People are scared of gold volatility.
  2. GLD gets some of the money
  3. Bullion gets some of the money

Mining stocks are cheap and pay dividends. Makes it a much better play than GLD. Bullion has its role as insurance, but for actual investment miners are better. If the masses ever see this there will be a big move. I'd love to here Warren Buffet's argument against gold stocks.

Mon, 03/26/2012 - 13:25 | Link to Comment yabyum
yabyum's picture

Mining stocks are cheap because I got them when they were expensive! I have much better luck with the metal, PHYS from Sprott has been my only stable paper holding.

Mon, 03/26/2012 - 13:59 | Link to Comment Pladizow
Pladizow's picture

Get in the miners after the shit hits the fan!

Mon, 03/26/2012 - 15:08 | Link to Comment oddjob
oddjob's picture

Long way down to reach 2008 levels on miners.

Mon, 03/26/2012 - 16:55 | Link to Comment Cast Iron Skillet
Cast Iron Skillet's picture

Purchasers of miners are often gold bugs. I think that gold bugs are often people who believe that the shit is going to hit the fan. Miners are stocks, and as such, they will likely drop if there is a big drop in the general stock price. Ergo, the miners will fall when the shtf. Ergo, wait to buy miners until after the shtf.

... and then, these same folks, like myself, are disappointed when the miners don't shoot up like hell ...

Mon, 03/26/2012 - 19:33 | Link to Comment Pinch
Pinch's picture

gold bugs are often people who believe that the shit is going to hit the fan

That may well be, but the shit hitting the fan could be, even should be, massive debt deleveraging and hence deflation, which is not great for precious metals. I'm a gold bug too, but only in the long term (5-20 years).

 

 

 

Rush Limbaugh in his own words: I'M A NAZI, OH YES I AM!

 

Mon, 03/26/2012 - 18:44 | Link to Comment cranky-old-geezer
cranky-old-geezer's picture

 

 

Get in the miners after the shit hits the fan!

Miners will never be a good investment again.  Mines are too exposed to government control.  If gold rises substantially, mines will be nationalized or something like that.

Don't invest in anything so exposed to govt cotrol.  This govt can regulate gold mines right out of business.

Physical in your possession is the only thing govt can't control.  If it's in some account somehere, forget it, govt can seize that account anytime they want.

Mon, 03/26/2012 - 18:58 | Link to Comment Deo vindice
Deo vindice's picture

Yep. Invest in miners AFTER the product has been mined, refined and designed (preferably in 1 oz rounds).

IOW - buy physical.

Mon, 03/26/2012 - 14:23 | Link to Comment Dre4dwolf
Dre4dwolf's picture

From a short term view you are correct, but on the long run (say 10 ~ 20 years) the mining stocks could be worth more than gold.

 

A proper comparison would be "owning the golden egg, vs. owning the goose who lays the golden eggs".

:P

 

I just dont trust the mining companies ATM (fraud).

Mon, 03/26/2012 - 14:49 | Link to Comment Buckaroo Banzai
Buckaroo Banzai's picture

There is HUGE political risk in owning mining shares. Government nationalization of mines is a real problem in parts of South America. And given that the US has now become a banana republic, in an environment of rapidly escalating gold prices, it's easy to anticipate either (a) "windfall profits taxes" on gold miners or (b) outright nationalization.

Seizing physical (a la 1933) makes no sense this time around, for a variety of excellent reasons-- the most salient of which is that, unlike in 1933, gold is no longer legal tender. But taxation and nationalization of miners will be real threats in the near future.

Mon, 03/26/2012 - 15:07 | Link to Comment AgShaman
AgShaman's picture

"Windfall Profits Tax" will be all the confiscation they need on the physical metal also...should you want to convert it into something else and "realize" any gains.

I'm sure they'll have to of course update their ledger at the Treasury....and re-index their holdings at the "new and improved" book value of an ounce of gold....vs...the $42.22 it currently resides at.

Oh...and for those pesky Silverbugs....it's a strategic metal....so ownership needs to be outlawed for "national security" purposes. As a show of good faith....the govt. is prepared to take it off the hands of all the hoarders....at current spot pricing of course, since our generosity knows no bounds.

The govt. will look out for us all

Mon, 03/26/2012 - 18:37 | Link to Comment passwordis
passwordis's picture

Silver has too many industrial uses. It's hard to image how they would go about confiscating it again. Although countries have outlawed the sale of Silver Colloidal.. and the FDA is working very hard to do the same.... but this is because of the health benefits. The FDA is a front for the pharmaceutical industry and anything that actually works to improve health is the last thing they want on the market.

Mon, 03/26/2012 - 18:59 | Link to Comment AgShaman
AgShaman's picture

What part of "strategic"....in terms of industrial uses don't you understand?

https://en.wikipedia.org/wiki/List_of_United_States_defense_contractors

Can't make the global war machine move without silver.

Do you have inside information about the pending World Peace they are planning on rolling out soon?

Mon, 03/26/2012 - 20:49 | Link to Comment smiler03
Mon, 03/26/2012 - 22:35 | Link to Comment passwordis
passwordis's picture

 

Hey, five people claim Silver colloidal caused them to turn blue and three of them are named John Doe.!!!   I'm convinced!!

Actually I know all about argyria.. The Atomic Size Particles in colloidal silver are are 250,000 times smaller than nanoparticles.  It's the nanoparticals that are claimed to embed themselves in the skin. The silver particles in Silver colloidal are much too small to become embedded in the skin tissue.

 18,000,000 people use colloidal silver a year and they can only come up with three people who claimed to have turned blue because of it and two of them are pictures of people taken in the 1950s..  Use the ole noggin.

There are many examples of people with blue skin throughout history,  Here is a story from ABC about a family of blue skinned people.http://abcnews.go.com/Health/blue-skinned-people-kentucky-reveal-todays-.....

 

Mon, 03/26/2012 - 22:31 | Link to Comment passwordis
passwordis's picture

 And please, do a little research on http://www.quackwatch.com.    This site ranks right up there with snopes.com as far as being a source for legitimate information.

Mon, 03/26/2012 - 13:39 | Link to Comment n8dawg84
n8dawg84's picture

How does one start buying mining stocks?  Can it be done with a 403(b)?

Mon, 03/26/2012 - 14:01 | Link to Comment Pladizow
Pladizow's picture

Easy, with DGX or DGXJ, but HIGHLY unlikely your 403b will allow this!

Mon, 03/26/2012 - 14:47 | Link to Comment Random_Robert
Random_Robert's picture

"Easy, with DGX or DGXJ, but HIGHLY unlikely your 403b will allow this!"

Dude-

The first rule of pumping (or even simple touting) is to GET THE SYMBOLS RIGHT...

GDX

GDXJ

 

:-)

Mon, 03/26/2012 - 14:03 | Link to Comment devo
devo's picture

Research the stocks, then buy them? GG, ABX, NEM etc are the big ones.

It's not hard. Start with a few shares if you're risk adverse, then dollar cost average.

Mon, 03/26/2012 - 18:46 | Link to Comment passwordis
passwordis's picture

 

Research the stocks, then buy them?.. It's not hard

 

 I found it extremely hard to find out which minors to invest in.. so hard that I decided not to invest.. Although Ron Paul released his portfolio and I thought of just picking one or two of those minors.  There is so much to learn that sometimes it's better to listen to someone who you trust... take a chance and buy the companies he buys. 

 

 

 

Tue, 03/27/2012 - 00:04 | Link to Comment Newager23
Newager23's picture

Research the stocks, then buy them? GG, ABX, NEM etc are the big ones. It's not hard. Start with a few shares if you're risk adverse, then dollar cost average

That's true if you buy ETFs,  but Juniors (where the big money is made) takes some time to learn. I recommend buying ETFs to start (GDXJ for gold miners, and SIL for silver miners). Also, some bullion for a foundation. They you can begin to learn how to invest in Juniors. I have an article and a video on my web page (www.goldsilverdata.com) that will help you. I also have a book that teaches you how to invest in gold and silver mining stocks. Currently the Juniors are extremely undervalued. I have over 50 companies in my database (on my web page for free) that have ratings of 3 or higher (potential 5 baggers).

Currently no one wants to invest in gold and silver mining stocks (notice all of the negative posts!). However, that will change once gold reaches $2000 and the miners become very profitable. In my opinion, now is a good time to get in. The XUA index is actually lower than 2008, which is remarkable considering the increase in the gold price.

Newager 

 

Mon, 03/26/2012 - 14:00 | Link to Comment Sudden Debt
Sudden Debt's picture

People hate miners because you can't trust internal geological surveys which all promise El Dorado

Mon, 03/26/2012 - 14:12 | Link to Comment devo
devo's picture

Yeah, but you can't trust anyone or anything. Didn't you see that tungsten kilo bar the other day? I trust miners and their surveys more than federal reserve notes so I trade in my notes for shares and get a higher interest rate in the form of a dividend. Risk is a gradient and relative. Even bullion has risk (Robbery, fake gold, etc).

Mon, 03/26/2012 - 15:54 | Link to Comment FrankDrakman
FrankDrakman's picture

I trust miners and their surveys more than federal reserve notes

Absolutely. I'm sure you've recovered your losses from Bre-X and Cartaway by now.

Watch out for falling geologists, though.

Mon, 03/26/2012 - 15:09 | Link to Comment Spitzer
Spitzer's picture

All of these reasons have been done to death.

Kinross fell 20% in one day because they where having some problems with a mine. A few days later, that Carnival cruise ship capsized and people died. Carnivals stock fell a measly 8%. wtf

Kinross went below its 2008 low in the same year gold made its all time high. ????

Mon, 03/26/2012 - 21:53 | Link to Comment dereklutz
dereklutz's picture

Kinross is below its 08 low for blowing billions overpaying for redback---a wee bit more than a mere "mine problem"........christ, with all due respect, i hate your face............but fully respect your taste in trim

i think the miners also are getting killed by costs (energy) rising as fast as bullion..........mayber the bullshit HF short crap too

wow.......that felt good, don't think i've ever posted, or at least in a yr or two

Tue, 03/27/2012 - 00:29 | Link to Comment ClipperBASIC
ClipperBASIC's picture

When stocks are cheap there is usually a good reason.

In the PM mining sector, there is an 800lb Gorrilla sitting on the market.

That beast has unlimited funny money to naked short.

IMHO best to steer clear of rigged casinos and rigged markets.

 

Mon, 03/26/2012 - 13:14 | Link to Comment aVian
aVian's picture

Jim Sinclair was cool before Gold was cool

Mon, 03/26/2012 - 13:18 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

'Gold prices have now softened, offering investors yet another chance to get back on board what is perhaps the most compelling form of money- and portfolio insurance available'

"Gold is money, everything else is credit" -- Some Muppet or other

 

Mon, 03/26/2012 - 13:17 | Link to Comment kito
kito's picture

I will give you 1 egg and some cheese for your stock certificate.....sorry, no....keep your now defunct stock certificate from the now nationalized mining company...

Mon, 03/26/2012 - 13:24 | Link to Comment Al Huxley
Al Huxley's picture

So why not nationalize AAPL then, or HD, or CMG?  I'd like to see some evidence as to why this argument's more compelling for mining companies than tech or retail.  Otherwise it's just another narrative to try and explain why the market's doing what it's doing.

Mon, 03/26/2012 - 13:30 | Link to Comment manhunter
manhunter's picture

Because gold is the ultimate wealth reserve, and mines will be treated as utilities. Gold is too valuable; allowing companies to mine it at the future price is allowing them to print money, a government monopoly.

We don't know the price of physical gold, and haven't for a long time. We only know the price of paper gold which trades at par with physical currently, but not for long.

Mon, 03/26/2012 - 13:33 | Link to Comment Al Huxley
Al Huxley's picture

My point is that if countries want to steal money from profitable corporations, then they can just as easily hit retail, tech, etc, as mining companies, a fact that many people seem to ignore.

Mon, 03/26/2012 - 13:35 | Link to Comment Quinvarius
Quinvarius's picture

You mean like GM?

Mon, 03/26/2012 - 13:39 | Link to Comment Al Huxley
Al Huxley's picture

They didn't steal GM, they bought a bankrupt company for political reasons.  The rationale for buying gold miners isn't to 'save the jobs' its to 'confiscate the profits'.

Mon, 03/26/2012 - 13:54 | Link to Comment Quinvarius
Quinvarius's picture

I think the bond holders would disagree that it was not stolen.

Mon, 03/26/2012 - 15:16 | Link to Comment Al Huxley
Al Huxley's picture

Fair enough.  But my point was the motivation.  True, though, the bondholders got screwed.

Mon, 03/26/2012 - 16:02 | Link to Comment kito
kito's picture

If a country nationalized a tech company, the company would be dead on arrival. No innovation would ever come of it again. Oil, metals, lumber and minerals are different. The inherent value is in the ground and that value isn't contingent on who owns it.

Mon, 03/26/2012 - 16:15 | Link to Comment Likstane
Likstane's picture

Even the government knows AAPL isn't money; especially 1 second after they deem it so.

Mon, 03/26/2012 - 14:24 | Link to Comment Dr. Engali
Dr. Engali's picture

If I remember my contract law correctly, first lien holders have the debt secure by any property the company owns. The lien holders get paid before anybody else in bankruptcy proceeding. So yes the government did steal GM from the bond holders.

Mon, 03/26/2012 - 14:23 | Link to Comment francis_sawyer
francis_sawyer's picture

 So why not nationalize AAPL then?

Because iPads are not melted down (arguably filled with tungsten rods), then stacked in Ft. Know, West Point, or wherever)... Neither are they demonized & called 'barbaric relics' (though I suppose the same could not be said about the Newton)... If the government nationalized AAPL, sheeple would realize that we've bebome a Soviet style dictatorship... Can't have people REALIZING they have a jackboot on their necks...

It's a full court PR press... By the time TSHTF. TPTB hope to have the people 'trained' to think that nationalizing miners is their patriotic duty...

 

Mon, 03/26/2012 - 14:56 | Link to Comment Buckaroo Banzai
Buckaroo Banzai's picture

Nationalizing miners is politically a very easy thing to do. The talking points practically write themselves:

-- "They are making windfall profits off of a national resource! Social justice demands that we tax this unearned windfall!"

-- "National security dictates that The People (i.e. the government) must control production of this strategic monetary resource!" (Obama's recent EO lays the groundwork for this)

-- "Greedy gold miners are taking advantage of our collective economic misfortune!"

-- "In this time of trouble, everyone must make sacrifices, especially the most fortunate among us!"

Mon, 03/26/2012 - 21:35 | Link to Comment StychoKiller
StychoKiller's picture

"Same as it ever was!"

Mon, 03/26/2012 - 14:01 | Link to Comment Sudden Debt
Sudden Debt's picture

They bought a 1$ value company and waisted billions on it. It's one of the big scars on the economy formely known as "capitalisme"

Mon, 03/26/2012 - 13:40 | Link to Comment manhunter
manhunter's picture

It's not stealing. Miners will be allowed to make a profit. Think of it as a windfall profits tax. Post revaluation the price will be staggering.

Mon, 03/26/2012 - 14:53 | Link to Comment AustriAnnie
AustriAnnie's picture

Miners often operate in multiple countries, minimizing the nationalization threat.  Seems to me that the threat of nationalization in some countries only serves to increase the value of gold in the overall market and miners in the countries that haven't nationalized?

Second, its far more likely the gov't (in the U.S. at least) will not outright nationalize, but rather make it easier for some companies to operate than others (according to campaign contributions).  Just like in most other industries, they will sponsor a few large players while making it costly for the out-of-favor companies to do business.  We see this now in utilities, oil, insurance, banking, car manufacturing.....(point to an industry that doesn't have gov't tipping the scale to some companies over others).

 

Mon, 03/26/2012 - 14:58 | Link to Comment Buckaroo Banzai
Buckaroo Banzai's picture

The individual mines will be nationalized, not the mining companies themselves. This happens in South America all the time.

Tax the mining companies, seize individual mines, or a combination of both. That is how you nationalize the assets.

Mon, 03/26/2012 - 14:14 | Link to Comment tmosley
tmosley's picture

Those companies don't have any money.  All they have are dollars.

Mon, 03/26/2012 - 13:32 | Link to Comment Vince Clortho
Vince Clortho's picture

A good point.  And a tough question to answer.

We know that governments (including the US) have confiscated gold in the past, and could conceivably do so in the future.  If that does happen, it is not a stretch to envision some type of action involving PM mining companies.  I believe during WWII miners of strategic metals were "regulated" by the government.

 

Mon, 03/26/2012 - 13:37 | Link to Comment Al Huxley
Al Huxley's picture

OK, then what about oil - I don't hear a lot of people avoiding Exxon because they're afraid it will be nationalized.  I'm not advocating buying gold stocks, although I do think they're really undervalued at the moment.  Just pointing out that people will always manufacture reasons for why a given asset deserves to be priced as it is, on the bear side and the bull side.  If in 3 years gold stocks are trading at 5 or 10x what they are now, there'll be the same crowds explaining 'why this makes perfect sense and they should in fact be higher'.  It's just human nature to try and provide 'explanations'.

Mon, 03/26/2012 - 13:43 | Link to Comment manhunter
manhunter's picture

Exxon doesn't own its oil fields, most of which have been nationalized. Exxon is allowed to make a profit for their services. Same thing will happen with miners.

Mon, 03/26/2012 - 13:55 | Link to Comment Quinvarius
Quinvarius's picture

You mean like when Chavez nationalized his oil companies?

Mon, 03/26/2012 - 14:31 | Link to Comment oddjob
Mon, 03/26/2012 - 16:21 | Link to Comment Flakmeister
Flakmeister's picture

Fuck... you had to go and bring that up...

Mon, 03/26/2012 - 13:58 | Link to Comment Dr. Engali
Dr. Engali's picture

When they run out of options they will nationalize anything that provides real value.

Mon, 03/26/2012 - 14:55 | Link to Comment AustriAnnie
AustriAnnie's picture

Then they will mismanage those resources, ration the goods of value, and make them even more scarce and valuable than they were before they nationalized the industry.

Mon, 03/26/2012 - 22:00 | Link to Comment dereklutz
dereklutz's picture

putting aside the nationalization stuff, a whole lota of 'em look pretty damn good on the charts.......you can buy proven cheaper on the street than the field..........kinda like the oils in the 80's

Mon, 03/26/2012 - 13:42 | Link to Comment AgShaman
AgShaman's picture

FDR nationalized the mines a year after he issued his Confiscation Act.

If you don't take ownership of your mining shares in paper form....they remain digits that your broker will not keep others from borrowing should they become interested in shorting your own shares against you.

The DTCC Re-Hypothecation Warehouse will continue to be unfriendly for all those interested in playing the stock markets

Mon, 03/26/2012 - 13:44 | Link to Comment Al Huxley
Al Huxley's picture

Homestake Mining's shareprice appreciated pretty consistently through the 1930's, one of the only places that 'buy and hold' would have made you good money.

Mon, 03/26/2012 - 15:39 | Link to Comment billsykes
billsykes's picture

they don't even issue certs in paper anymore. and it will not help if the mine gets nationalized, just look at venezuela, or Columbia.

Mon, 03/26/2012 - 13:37 | Link to Comment Floordawg
Floordawg's picture

I'm no economist, but if I'm not mistaken, gold IS money, an iPad is not money... it is food. At least that is what Zero Hedge has taught me.

Mon, 03/26/2012 - 13:40 | Link to Comment Fuh Querada
Fuh Querada's picture

As I see it, owning mining stocks is even more a matter of philosophy than the metal. Many of the producing mining companies have f***ed up big time by lousy PR and low dividends. The juniors have been shafted ever since gold retreated from $1900 and since general sentiment says that the gold bull market is finished. It is true that both producers and explorers have been a f***ing lousy investment over the last 12 months. Nevertheless I still have a small position in them in my portfolio in additional to physical because:

- diversification. No hassle about storage, and a hedge against confiscation

- with good selection, some are still technically in good shape (Yamana)

- royalty streamers like Franco Nevada and Royal gold are also holdng up well

-historically miners have done well even after gold metal peaks out at the end of the bull market

- silver miners have held up even better, presumably because some are being used directly as a source of metal during the Crimex paper manipulations 

I have no argument to counter the nationalization scenario. Just my 2 c.

 

 

Mon, 03/26/2012 - 13:41 | Link to Comment Hobbleknee
Hobbleknee's picture

I think the backward, insane, illegal idea is that somehow the government has the right to own all the country's natural resources- just like they think they own all the land, water, air, people, etc.

___________________________________________

compare gold and silver prices

Mon, 03/26/2012 - 13:47 | Link to Comment Floordawg
Mon, 03/26/2012 - 15:06 | Link to Comment Mary Wilbur
Mary Wilbur's picture

I didn't read the entire exorder but enough to understand that BHO is getting very paranoid. Wouldn't the answer be to by foreign gold/silver mining stocks? I have been looking at a Canadian company, agnico-eagle.com. Thanks for the heads up.

Mon, 03/26/2012 - 13:56 | Link to Comment Dr. Engali
Dr. Engali's picture

Apple isn't money. When fiat burns the governments will be taking over the companies that dig the real money out of the ground.

Mon, 03/26/2012 - 14:04 | Link to Comment devo
devo's picture

The best argument I can think of: they can increase the money supply (i.e. steal and redistribute money) at will and have a backed currency. Also, and this is key: they can control who gets the gold.

Ipads depreciate toward zero so they can't serve these functions. Gold doesn't do that. Other commodaties could, but gold and silver are more recognized in this role.

Mines could be nationalized and turned into utilities. But they could trade like tech stocks if gold ever does reach the bubble stage, which is likely.

Mon, 03/26/2012 - 13:56 | Link to Comment bernorange
bernorange's picture

bird in the hand...

Mon, 03/26/2012 - 15:26 | Link to Comment americanspirit
americanspirit's picture

Anybody want some Crystallex stock?

Mon, 03/26/2012 - 15:44 | Link to Comment billsykes
billsykes's picture

That cocksucker Robert Fung should be locked up for fraud. He blew about 40m in a couple yrs knowing full well that he will never get the mine. most real CEO's would have just bought a new piece of land in a diffent country, he had more cash than most juniors and could of drilled up some good peices and gotten more money for drilling. but the lazy nig just sat around in TO and blew the money. 

Mon, 03/26/2012 - 13:17 | Link to Comment Bazinga
Bazinga's picture

Now that countries are using gold for purchases (oil) do your due dilligence on quality mining companies and snap them up at these prices. I have been and continue to be a mining investor - yes I have my physical too.

Mon, 03/26/2012 - 13:18 | Link to Comment MountainGreenhouse
MountainGreenhouse's picture

What are some good mining stocks?  And aren't you guys afraid that if the market craps its pants again that mining stocks won't take a crap along with the market?

I have PM's but have always contemplated investing in some dividend paying mining stocks.

Mon, 03/26/2012 - 13:22 | Link to Comment Bazinga
Bazinga's picture

Never take stock tips from a chat board LOL. SLW and AUY have treated me very well (DYODD).

The Aden sisters put out an excellent gold newsletter and get into technicals and world factors. Definitely worth a look.

Mon, 03/26/2012 - 13:24 | Link to Comment devo
devo's picture

Of course that can happen. There's risk in everything. Near 52 week lows and dividends abates some of the risk, though. I like NEM best. People are scared off by the 1 time write off and what it did to the p/e, but if the Peru project kicks off they'll be a nice bump. $62+ stock a year from now imo.

Mon, 03/26/2012 - 13:28 | Link to Comment Rakshas
Rakshas's picture

Silver Wheaton is just a good stock for PM exposure, it was a hell of a lot better when it was trading for 8 bucks but I can't change my stupidity - "oh look what they are doing that seems like a really good idea, I should invest" Stupid is eternal....

If you are intersted in past performance and someone that does not seem to suffer from auto-head-up-his-own-assis you may check out Rob McEwen with McEwen Mining they merged with Minera Andes and have reasonable sounding reserves and potential for the current share price.

I like a little slow starter called Aurcana for the spec silver growth story trading below a buck right now but looking to springboard to major Ag producer within the next 18 to 24 months, currently brining Shafter silver mine in west Tx back into production lots of O/S shares but lots held by institutions

Actualy there are a number of really good Co's to look at I just like rolling the dice on the longer shots.....

 

Mon, 03/26/2012 - 14:32 | Link to Comment Jack Sheet
Jack Sheet's picture

Shafter sounds like a good bet

Mon, 03/26/2012 - 15:29 | Link to Comment americanspirit
americanspirit's picture

Dude - pay close attention to the name. Shafter. Somebody's idea of fair warning, or a joke? Don't know anything about the stock tho.

Mon, 03/26/2012 - 14:56 | Link to Comment rosiescenario
rosiescenario's picture

Bought Aurcana quite awhile back....Shafter has big potential, if it works out. Also, if you like Aurcana, you may also like Impact. They will be starting up a new open pit mine in the next few months to add to their current production. They have extensive proven reserves and "unproven" though the unproven area has been mined for many hundred years and undoubtedly has significant silver reserves as the old time (Spanish and Indians before them) miners did not posses the pumping equipment available today.....their mines all stop when their adits meet the water table.

Mon, 03/26/2012 - 15:43 | Link to Comment toothpicker
toothpicker's picture

There are so many good PM miners out there *drools*. I always buy too early - but rather too early than too late

Mon, 03/26/2012 - 13:37 | Link to Comment Paul Atreides
Paul Atreides's picture

This is the one mining stock I have my eye on:

http://www.detourgold.com/ TSX.DGC

Overview
-Emerging mid-tier gold producer
-Building Canada’s largest gold mine
-Open pit gold reserves of 15.6 million ounces
-Projected average annual gold production of approximately 650,000 ounces
-Significant exploration potential on prospective 540km2 property

I do not recommend stocks for anyone right now and everyone needs to do their own research before investing. Personally I am not going to buy in now, but when the stock market bubble pops and stocks are pennies on the dollar you can be sure I will be long on this one.

 

Mon, 03/26/2012 - 13:52 | Link to Comment EL INDIO
EL INDIO's picture

The spice Muadib,

Control the spice.

Mon, 03/26/2012 - 15:26 | Link to Comment Paul Atreides
Paul Atreides's picture

Indio, do we have wormsign?

Mon, 03/26/2012 - 16:14 | Link to Comment Buckaroo Banzai
Buckaroo Banzai's picture

"The Spice must flow"

Of course, the analogy that Frank Herbert was drawing to our current global economy here on earth was spice : oil, not spice : gold.

Mon, 03/26/2012 - 22:11 | Link to Comment dereklutz
dereklutz's picture

there's only one guy you gotta follow.............SEYMOUR.........compounded franco 40% over 2 decades then merged into a little shop named NEMONT...........bought size oil sands in 2004....he's back with a great story

Mon, 03/26/2012 - 13:20 | Link to Comment mr_T
mr_T's picture

If u don't hold it ...u don't own it.

Mon, 03/26/2012 - 13:23 | Link to Comment Bazinga
Bazinga's picture

Agreed. I request the stock to be in MY name, NOT STREET NAME. In street name you will get MF Global'd.

Mon, 03/26/2012 - 13:27 | Link to Comment yabyum
yabyum's picture

Corzined, with out even a  kiss.

Mon, 03/26/2012 - 13:24 | Link to Comment Hedgetard55
Hedgetard55's picture

Actually, priced in gold, gold has not made any return, ever...  :~)

 

Gold has not increased, the dollar has been raped by Bennie and the Inkjets.

Mon, 03/26/2012 - 13:28 | Link to Comment malikai
malikai's picture

Your statement is an insult to central bankers the world over. They have much more class than to use inkjets. They are a traditional people. They use plates and rollers. Get it right.

Mon, 03/26/2012 - 13:30 | Link to Comment Bazinga
Bazinga's picture

Most sheeple don't get that gold is a store of wealth because it protects you from the devaluation of fiat. A top notch men's suit hundreds of years ago cost an ounce of gold; a top notch suit today costs you an ounce of gold. The same goes for oil over the decades.

Mon, 03/26/2012 - 13:27 | Link to Comment William113
William113's picture
Yuan-settled gold and copper futures to launch in Hong Kong by July

According to the exchange's president, the Hong Kong Mercantile Exchange will launch yuan-settled gold and copper futures contracts by July to tap into the growing Chinese investor demand for commodities

Posted:  Friday , 23 Mar 2012

Mon, 03/26/2012 - 13:33 | Link to Comment Quinvarius
Quinvarius's picture

Maybe it is because the idiot miners keep selling hedges, and then buying them back for a loss.  No one trusts them.  Gold goes up, they lose on hedges.  Gold goes down, they lose operations.  And besides that, I don't think most of them are very profitable anyway.  Their costs are rising at least as fast as gold prices.  Then there is real risk of government mine grabs as the current finanical system implodes into rampant Socialism.  On top of all that, every couple months the government tries to put them out of business with a paper raid.  I will take the gold, thanks.

Mon, 03/26/2012 - 13:47 | Link to Comment Al Huxley
Al Huxley's picture

I'm not advocating against holding gold, but check the financials of the producers - they're margins are huge, and they're sitting on stacks of cash.

Mon, 03/26/2012 - 13:58 | Link to Comment Quinvarius
Quinvarius's picture

And who likes stacks of cash + gold?  Uncle Sam! 

And when the gold miners are confiscated, people will cheer as the TV tells them to.  That is how capitalism and free markets die--To thundering applause.

Mon, 03/26/2012 - 15:01 | Link to Comment rosiescenario
rosiescenario's picture

Last time I checked, my major silver mining holding had net margins far exceeding those of AAPL...45%....

Mon, 03/26/2012 - 15:08 | Link to Comment rosiescenario
rosiescenario's picture

Just double checked that and the Operating Margin was 50.2%.....

Mon, 03/26/2012 - 13:32 | Link to Comment AgShaman
AgShaman's picture

Tim and Don must've been in a coma.

This era started a decade ago

Mon, 03/26/2012 - 13:33 | Link to Comment stopcpdotcom
stopcpdotcom's picture

Exclusive: Greek government robbed public institutions to complete bond swap:

https://hat4uk.wordpress.com/2012/03/26/exclusive-greek-government-robbe...

Mon, 03/26/2012 - 13:33 | Link to Comment q99x2
q99x2's picture

Unless you live in Turkey.

Mon, 03/26/2012 - 13:33 | Link to Comment Amish Hacker
Amish Hacker's picture

A lot of the money that would go into shares of mining companies gets diverted into the ETFs (gld and slv). To the small investor, these products seem so easy to invest in, without all the company risk that goes along with equities.

But one look at who operates those funds should raise alarms, and when you really look into it you see that the ETFs have become just a slush fund for the COMEX.

Never fear, when the Ponzi of paper metal collapses, PM equities will come back into favor---just in time for the government to slap them with huge new "windfall profits" taxes.

Mon, 03/26/2012 - 13:37 | Link to Comment EL INDIO
EL INDIO's picture

Ben is not gold bug's friend, he is more like gold bug’s boyfriend

 

And Gartman just said he is bullish on gold again...

 

Ruuuuun...bitchez

Mon, 03/26/2012 - 14:38 | Link to Comment oddjob
oddjob's picture

-1 for even mentioning that shill pig, sorry nothing personal.

Mon, 03/26/2012 - 13:40 | Link to Comment Silveramada
Silveramada's picture

bla bla bla...the stocks are telling us that something is wrong. paper is not the real asset...geopolitical risk, nationalized mines, strikes, accidents, enviromental risks...you name it. i did make $ with silver and gold shares, but i am scared of that paper shit from now on....

Mon, 03/26/2012 - 13:45 | Link to Comment fuu
fuu's picture

Of course we are.

Mon, 03/26/2012 - 13:52 | Link to Comment Hallpass2012
Hallpass2012's picture

I agreee the fundamentals behind gold are epically overwhelming, butttt do people really understand what this means? in the case of a financial meltdown of the credit system, those gold mines will be nationalized thus why would anyone own shares in something in which your ownership is not going to last and perhaps no massive premium is even paid to current shareholders?

Obviosly, the miners are cheap (& have been for a while) if ones forecast for gold (yellow metal) is bullish, this increases their future earnings, but hmmm I would say gold bullion is the best way to go... I have zero trust in any government

Mon, 03/26/2012 - 13:57 | Link to Comment Zola
Zola's picture

Its very simple actually, if miners want their stock prices to go up they need to raise dividends...Especially the big ones where the value of assets in the ground to market cap shows a huge disconnect. A doubling of the yield across the sector would work wonders. 

Mon, 03/26/2012 - 13:59 | Link to Comment pitz
pitz's picture

My personal theory is that "ABX", the very famous gold stock, is also the same 'symbol' used for the subprime mortgage index -- "ABX".  Traders, obviously, don't want subprime mortgages, so they avoid ABX.  Even though ABX is a perfectly fine gold company, plenty of reserves, operating mines, dirt cheap valuation, etc.

 

Its almost like refusing to join the SUKI (tm) RELIGION because you had a bad experience with Japanese hot-pot a few decades ago (sukiyaki), even though the only similarity between the RELIGION SUKI (tm), and sukiyaki, is the name.   (SUKI (tm), The New World Religion (tm) -- motherfucking RELIGION)

Mon, 03/26/2012 - 15:32 | Link to Comment americanspirit
americanspirit's picture

Pronounced suckee? Or maybe sucky?

Mon, 03/26/2012 - 16:48 | Link to Comment pitz
pitz's picture

Nope, the SUKI (tm) RELIGION's name is pronounced "sookie".  Rhymes with 'cookie', the (tm) is silent.  SUKI (tm) is brand-name RELIGION, The New World Religion (tm).

Mon, 03/26/2012 - 20:47 | Link to Comment pvzh
pvzh's picture

name is pronounced "sookie"

That religion will not get many followers in Russia because that is how in Russian word "bitches" is pronounced.

Mon, 03/26/2012 - 22:21 | Link to Comment pitz
pitz's picture

Perhaps.  But everyone knows that SUKI (tm) is The New World Religion (tm), a motherfucking religion with over two million members worldwide.

Mon, 03/26/2012 - 18:12 | Link to Comment Vlad Tepid
Vlad Tepid's picture

You lost me after "etc."  Are you selling something?

Mon, 03/26/2012 - 14:06 | Link to Comment dumbfounded
dumbfounded's picture

Assuming the gold price is driven by currency devaluation then wouldn't the price of goods and labor required to operate the gold mine be impacted by the same currency devaluation, and thus rise in step with the price of gold. The result would be that profitability does not rise in real terms, i.e. stock value remains constant (in real terms).

Now if there's a fear premium on gold things may be different.

Mon, 03/26/2012 - 14:41 | Link to Comment devo
devo's picture

I responded but didn't like my response. Consider this a delete

Mon, 03/26/2012 - 14:23 | Link to Comment dumpster
dumpster's picture

gold comments 10 years to late

where were the wizzez 10 years ago when gold was 300.. 

they were in a coma of never land

late to the party , late to the dance .. but now act like the sages of spit

 

Mon, 03/26/2012 - 17:30 | Link to Comment Rakshas
Rakshas's picture

Embry, Turk and Sprott, Greyerz and a bunch  of other "Nuts" {including an old teller at my local big bank; she may have been nuttier than squirrel shit but she was a big fan of gold for as long as I can remember}would have been the names you listened to - but then WTF would have done that a decade ago...... hell where would you even find people to frequent a site like this a decade ago.

 

 

Mon, 03/26/2012 - 14:20 | Link to Comment HarryHaller
HarryHaller's picture

@n8dawg - Depending on who is the custodian of your account you might be able to use an outside broker - but at a premium.  In my case it's (like it or not) my account is managed by Fidelity.  Closest I can get w/o going outside is FSAGX.  If you want to pick stocks individually give whoever manages your account a call to see if an outside broker is an option.

Mon, 03/26/2012 - 14:23 | Link to Comment dumpster
dumpster's picture

just buy the dang gold stocks for 7.50 a trade at fidelity

any one asking how and why is brain dead to the action of the last ten years

Mon, 03/26/2012 - 14:26 | Link to Comment dumpster
dumpster's picture

hui was at 40 now 480 .. thats a pretty decent ride ..

dah ,, now the plethora of wise guys

Mon, 03/26/2012 - 14:27 | Link to Comment dumpster
dumpster's picture

very simple if apple goes up it needs dividends .. oh wait lol

Mon, 03/26/2012 - 14:43 | Link to Comment devo
devo's picture

When Joe Sixpack is panning the riverbed on his seven day weekend, you'll know gold is in a bubble. Until then...

Mon, 03/26/2012 - 14:47 | Link to Comment Bam_Man
Bam_Man's picture

Acclaimed screenwriter William Goldman is also the author of "Marathon Man" and wrote the screenplay for the film starring Dustin Hoffman and Sir Lawrence Olivier.

Some of you may recall a particular scene where the question "Is it safe?" is repeatedly asked.

In the case of Gold, the correct answer is "Yes, it's safe. It's so safe you wouldn't believe it." 

Mon, 03/26/2012 - 15:06 | Link to Comment mogul rider
mogul rider's picture

So let's review

You bought silver at 45 - sold it last week at 32

You bought gold at 1910 - sold it last week at 1620

The pumpers, banksters, and smart money bought all  of it. Shares, bullion, etf's etc.

Now they put an article out that it is the best deal of the millenium and you line up and you stare in disbelief that that last week it was a train wreck.

What changed in the week you say.

The short, banksters, and pumpers took everything you own including your wife, they gave you the fiat bend over and they became longs as you became short and you are out and hte phone is ringing from the margin desk.

This next year will be fabulous. This time sell when every pumper here says 5000 silver. Leave them hanging for a change.

 

You are being played here. Wake up

Mon, 03/26/2012 - 15:02 | Link to Comment rickadoh
rickadoh's picture

ihate the pumpers, but this mining co. is performing well MGN.

Mon, 03/26/2012 - 15:02 | Link to Comment Chappy
Chappy's picture

What are the best mining stocks?  TRX?  Suggestions??

Mon, 03/26/2012 - 15:08 | Link to Comment jmk
jmk's picture

Gold may well be confiscated and the extraordinary profits almost certainly subjected to a windfall profits tax.  Anyone who thinks they are going to walk away with a piss-pot full of money from their gold and gold-related assets while we are governed by these greedy sonsabitches is kidding himself.

Don't keep the gold in your tax domicile country and get a second passport.  There are places to hold physical gold where it is reasonably safe from all the machinations of the current cast of highwaymen and criminals.

Dealing with this and future governments during the worst Depression in the history of civilzation will require some well-honed survival skills.

Mon, 03/26/2012 - 15:14 | Link to Comment Watauga
Watauga's picture

There is a great deal of noise about the risk in mining shares.  Bottom line is that gold is going to $5000 per ounce, and those who produce it will see enormous profits in the coming three years.  Good miners will outperform bullion by a considerable margin.  The key is to pick the good ones.

Mon, 03/26/2012 - 15:18 | Link to Comment debtor of last ...
debtor of last resort's picture

the problem is

 

how to loose a mining share in a boating accident

Mon, 03/26/2012 - 15:18 | Link to Comment debtor of last ...
debtor of last resort's picture

no paper, as we promised

 

in a world full of shit

Mon, 03/26/2012 - 15:26 | Link to Comment Bansters-in-my-...
Bansters-in-my- feces's picture

Ain't too smart don't know much,but I do know mining companies will NEVER outperform bullion...!

NEVER.

Mon, 03/26/2012 - 15:55 | Link to Comment billsykes
billsykes's picture

Don't even touch the junior miners most are incompetent and ego driven useless fucks spending investors money on fancy hotels and excessive travel, instead of putting 90% of the money in the ground drilling.

250-600k a yr salary is fuck all, but when you are pre-revenue that is excessive.

$60-80k yr tops with a bonus for share performance or feet/GPT drilled or found. And minimum 10% skin per executive in a companies stock. most of these Vancouver layabouts have nothing in, and just act like they own newmont or something with water view offices at $120 a sq ft. 

Why am I so jaded? Because I have met many. All scoundrels, not even a good scoundrels (entertainment value) but cheap two bit hustlers.

Buy bullion.  Don't even talk to me about the silver freaks there.

 

 

Mon, 03/26/2012 - 16:21 | Link to Comment Red Heeler
Red Heeler's picture

It's been said here before: "A mine is a hole in the ground with a liar standing next to it." - Mark Twain

Mon, 03/26/2012 - 16:04 | Link to Comment Money 4 Nothing
Money 4 Nothing's picture

True, until there is no economy to spend it in, I will keep my ham sammitch, you can keep you 5oz silver bar, Fed Reserve 100 year contract is over at the end of the year, just saying.

Mon, 03/26/2012 - 18:45 | Link to Comment moondog
moondog's picture

The 100 year FED contract is an urban legend. The McFadden Act of 1927 gave a perpetual charter to the Federal Reserve.

See page 5 --> http://www.kansascityfed.org/publicat/balanceofpower/balanceofpower.pdf

I'm keeping all that's left of my PM's (that didn't fall overboard last summer in Lake Ontario).

Mon, 03/26/2012 - 16:26 | Link to Comment rew2
rew2's picture

Gold stocks have many risks that gold doesn't have:

1.  High energy requirements.  Gold miners have to buy a lot of diesel fuel.  When inflation goes up, so does the cost of oil.  All the other expenses go up too, like those giant tires on their super sized trucks.

2.  Periodic strikes.

3.  Impecunious governments looking at those nicely profitable gold mines and deciding to nationalize them.

4.  Declining ore grades.  It is the nature of mining that the easy stuff gets mined first.  So over time grades get worse, whether its copper or titanium or gold.

5.  Changing investor expectations.  Several years ago people were happy to buy gold stocks with P/Es of 30.  Now they demand a more sensible valuation and look for a P/E under 15.

 

 

Mon, 03/26/2012 - 19:38 | Link to Comment BuildItToBreakIt
BuildItToBreakIt's picture

Some solid points above!

Like all metals, gold is a cyclical entity.  I for one still believe that it's best days are ahead of it.  But, it trades on market psychology.  Like any other commodity, the stocks who mine it trade at prices based on the assumptions of the future price of gold, and their underlying cost to extract it.  This is much akin to the valutations for other mining stocks.  During periods of low prices, the market will pay a substantial earnings multiple premium for assets in the ground, based on future expectations of price increases.  In the case of gold, which has sextupled in recent memory, it is less conceivable it will do so again, thus there is a multiple contraction. 

With the prospect of some of the world's largest currencies falling to shambles, there is a very distinct possibility that we could see a rally that makes the 80s spike seem like a warmup.  One has to bear in mind that at the same time, ultimately, gold has little useful value.  It's only money because people say it's money.  It's just as arbitrary as paper currency, although in the long term it's FAR less suseptible to maniuplation.  If wealth gets destroyed via the collapse of a currency, who can afford to buy your gold from you, and with what?  If suddenly everyone in the US or EU held a worthless currency, what are they going to buy that next multiple of gold with?  I'm long miners now, but how does one know to get out?  Today is not the day, but as last years spike proved, even a hint of a major currency blowing up is like rocketfuel for the price of gold.

 

Mon, 03/26/2012 - 16:35 | Link to Comment loveyajimbo
loveyajimbo's picture

For Zero Hedge, it is amazing how many dumb shits are posting negative crap about gold and major gold stocks...  Hey, hang onto your 1% bonds, fellas, you will soon be selling BJ's at $5/each just to afford your spam and cardboard box.

Mon, 03/26/2012 - 17:56 | Link to Comment billsykes
billsykes's picture

Look at 2008 - the only time, the only time junior miners are return value is when the stock goes up. To do that they need to drill and they need a safe stable country and have to come back every 1 to 2 years to the market, thus diluting the float but if it's good the share appreciation will cover that.

To do a minimal drilling program you need at least 9-13m CAD- this is on a good, non moose pasture piece with a solid 43-101 on it.

This is my problem with juniors;

1. if the metal they are mining for goes up- it doesn't matter if they cannot access cash from the public markets. (ie vancouver/toronto stock brokers) (gunshy retail money).  they need perma bull markets as it takes at least 3-5 yrs or 3x plus to go back to the trough. 1 yr without cash is killer for these guys, and very very few have decent money management skills because they are just geologists not finance guys. 

2. if the metal goes down they are really in trouble because they cannot get money from the retail brokers. there is only 6-7 brokers in Canada and maybe 2-3 good ones that handle junior miners with junior money- these miners are not set up to raise cash themselves in PP on the retail market.

Sure you can get 10x back but it is a real gamble. if its just disposable cash- here 10k if it makes it great if I loose everything I have a tax writeoff. Thats the mentality you need, ask any successful CEO with a mine in production how many sleepless nights and how close he was to closing down the company, how bad the share price got beat up. Its a 10 yr bit.  

 

Mon, 03/26/2012 - 19:08 | Link to Comment Dr. Crime
Dr. Crime's picture

One of the many insights from the article is "a tangible vehicle that has the potential to rise dramatically as expressed in paper money terms."  Think about that, I mean what is the value of gold? For example, who is going into Al Swearingen's saloon in Deadwood and pour out some grains for gold onto a scale so he can buy a shot of whiskey and a piece of pussy? You need that fiat currency in order to facilitate the exchange of gold for services. Otherwise it is pretty damn cumbersome to make your exchanges in gold only. 

 


Mon, 03/26/2012 - 20:28 | Link to Comment honestann
honestann's picture

Why do gold miners trail physical gold?  The answer is simple: counterparty risk.  The executives might be liars, thieves, or overly optimistic.  The governments who control the jurisdictions of their mines might close them down, steal their gold, or tax them out the wazoo.  But gold is gold is gold is gold.  And therefore...

In gold we trust.

Mon, 03/26/2012 - 21:08 | Link to Comment andyupnorth
andyupnorth's picture

I have an issue with buying physical (I know, I've been a daily reader for what feels like a lifetime... but I'm a little slow...)

A bunch of websites (like SiverGoldbull which is advertised right before my eyes) sells Canadian Maple Leaf 1 oz gold coins for $1750, while buying directly from the Royal Candian Mint costs nearly $3000.

Why is that? Are all the coins fake except the Royal Mint? OR what?

Tue, 03/27/2012 - 02:56 | Link to Comment honestann
honestann's picture

Any long established precious metal dealer supplies 100% genuine gold coins and bars - they get them directly from mints like the Royal Canadian Mint.  You must be looking at a special coin for $3000.  The mints do offer various grades of "proof" quality gold coins for considerable premiums to the same "regular quality" coins.  You ONLY want "regular quality" coins!  Do not pay a premium.  NEVER pay more than about 5% over the spot price of gold for any gold bullion coin.  If you want to buy from a dealer that has great prices and delivery, order from www.apmex.com.  They aren't the only good bullion dealer, just the best I've found.  Never buy from "fly-by-nights".

Mon, 03/26/2012 - 22:01 | Link to Comment AllWorkedUp
AllWorkedUp's picture

 I've been hearing about how great gold miners were going to do for the last 7 years. They are the most manipulated joke investments in the market, hedgies have a blast naked shorting them to death. Just when you think they are cheap, they get cheaper. Every breakout is sold. Every breakdown is sold even harder.

I'll believe it when I see it. Still watch some juniors that are 70-80% off their highs from a year ago. NEM, ABX are cheaper now than they were on 2005. Give me a break Mr. Coxe.

Tue, 03/27/2012 - 03:07 | Link to Comment honestann
honestann's picture

Here's my tip.  When the next huge financial disaster happens, and the miners drop to 10% of their current prices, then invest 10% to 25% of your wealth into carefully chosen miners (especially small~medium size quality companies with profitable operations that get beaten down the most).  Then wait a couple years and sell them for 5x to 20x what you paid.  I did this when they got beat to death in Oct/Nov 2008, and it paid off very well in 2~3 years (5x to 20x gains).

However, I am not sure whether we will ever get this good an opportunity again.  The trick is, do not invest in them unless we DO get such a massive collapse in their prices again.  If we DO get that huge a collapse, you can be sure most of the selling was to cover margin calls, not because good companies all of a sudden suck.

Mon, 03/26/2012 - 22:03 | Link to Comment dolph9
dolph9's picture

I would like to believe in the miners, but I don't have the stomach for it anymore.  Even if they go up, I wouldn't want to climb on board.  It's all speculation.  One day they'll turn into Netflix.

The miners are NOT gold, people.  You either own physical metal or you don't.

Thu, 03/29/2012 - 18:54 | Link to Comment honestann
honestann's picture

How many people would pay $175,000 for a piece of paper that says "1 house" on it, but never see the house?  Yet people seem completely happy to pay $175,000 for a piece of paper that says "100 ounces of gold", but never see the gold.

It is simply mind boggling that in the predator-dominated world of today, most people cannot see the advantage of REALITY IN THEIR HANDS versus a piece of freaking paper created by known serial thieves!

Mon, 03/26/2012 - 22:46 | Link to Comment Basia
Basia's picture

Bob Chapman has some great mining picks. just email him for the info.  

bob@intforecaster.com 

 

He also publishes a newsletter which is amazing.

www.theinternationalforecaster.com

Tue, 03/27/2012 - 19:38 | Link to Comment rbblum
rbblum's picture

And, just as the proxy banks (JP Morgan et al) are suppressing the paper gold and silver markets, why would there be any doubt that there is direct interaction to suppress the gold and silver miners?

It's not nice to try to fool the natural laws of economics.

 

Do NOT follow this link or you will be banned from the site!