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I’ll be quick tonight with two illustrations which should show why I’m in (mostly) miners rather than physical gold or its paper substitute, the [[GLD]] ETF.
First, I think we can agree we’ve been in, and we remain in, a secular bull for the precious metals, as this monthly chart on the price of gold illustrates:
Note the four times price appreciation over the eight plus years? Not bad, huh? Well, let’s look at the miners over that same period. Remember, they benefit from what we call “operation leverage,” which means that in a rising price environment, they can leverage their fixed costs and really ramp profitability quickly.
Note the effect in our [[$HUI]] monthly chart:
Note the shorter time period and the far steeper gains? Note also that the miners have yet to catch up to the recent new highs in gold. I believe that time is coming soon, and may even be upon us as the dollar approaches a crucial double top area.
More on that as it develops. My best to you and your own personal operating levers.
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nice work.
Good points, appreciate the fundamental look.
(leaving the double top reference aside)
Well, if you look, you’ll see physical gold had that same “double top” — allegedly. Then it BTFO’d.
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Jake – good stuff.
This is what I have always read the miners should do, but have not been of late. I suspect that the consolidation phase that HUI has been in (while gold moved higher) is the key. When HUI breaks out of that I would look for the miners to begin to significantly outperform (by greater than a factor of 2) as they should from a historical basis. I keep checking the relative performance every week or so to see the change when it happens.
Keep us informed, here or on the Peeg, thanks.
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MON taking it in the shorts with a fervid passion. Down over $4 on cuts to their earnings estimates.
It’s more of the Roundup story, about which I am not interested. I am interested in their genetic business, and that’s why I’m investing.
I will get more today, and continue to knife catch. Play w. caution.
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Dayummm Gina!
I thought i was getting a bargain at $53.25 on this sumonabeetch…now down 8.6%.
“Don’t frown, DOUBLE DOWN!”
I will be buying at the bottom.
You’ll be buying men’s bottoms in the mission, SF, gay boy.
You – 53.25
Me – at the bottom.
Scoreboard b*tch.
LOL – granted, you are probably more familiar in being a bottom, but that’s not what we’re talking about here.
I (stupidly?) bought more @ $48.95…
In a gambling mood today so i also picked up 2g’s worth of FTK
Looks good to me.
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much to the g-man’s chagrin
Mr. Straw
Stop drinking horse cum….
V.King
Mr. Straw is a friend, i was just busting his balzac.
Sorry Mr. Straw, you may drink all the horse cum you wish….
lol – you slay me.
Started a position @ 49
The new operation game will add nads to remove along wirh lips.
Niiiice chartifyin’, Jake.
When i was a kid, my parents got me that game for Christmas.
I calmly dominated “operation” to the point that all the little neighborhood ruffians thought I was destined to be a surgeon (plastic, of course).
Was that when you knew you were…. you know… ?
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….What?……blessed?