Let me be clear about my bearish position on gold/silver miners. I’ve owned EXK and AG plenty of times over the years and have made money owning them almost every single time. But something is wrong with the industry. Dare I say these companies might be in the 2nd inning of a generational top?
Last week Goldman Sachs predicted a top in gold, saying the price wouldn’t hit $1,900 for another 20 years. All that aside, the raw commodities have done exceptionally well over the years, haven’t they? But why haven’t the miners done well?
Clearly with gold/silver at or near highs, the miners should be basking in coin, lavishing hefty dividends to their loyal subjects aka shareholders.
Unfortunately, the exact opposite is true. PAAS pays a 1% divvy, for crying out loud.
Look at the fundamentals of some gold/silver stocks listed below.
Now have a look at the much lampooned social media sector.
You will find both sectors to have many companies with rich price/sales ratios, as well as PEs. But what you won’t find in gold or silver is revenue and earnings growth. I’d rather take my chances in a richly valued growth stock, than a richly valued dog. Plus, with the amount of debt that is accumulating around the world, it’s only a matter of time before government’s start nationalizing these mines, leaving shareholders of mining companies left holding the Carnival Cruise feces bag (extra Triumph).
In the event that the raw commodities accelerate to the downside, there will be a shareholder Exodus–further damaging the morale and position of loyal, hardened, investors.
If you must own gold, just buy GLD.
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There are still many miners that are “basking in coin” if you check price going back to ’05 or so. Stop looking at the dogs.
rgld is 15x sales
qed
rgld is NOT a miner!
Right, they just have investments in a bunch of stupid mines.
Yes, how horrible. All they receive every quarter is pure gold royalty payments.
Certainly, that’s the equivalent of air-ball pie in the sky dot bomb companies.
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Those mines are being mismanaged.
Greeting Fly,
Remember when I gave you EXEL as a “no-brainer” short recently? Well, it’s down 15% since then. Still plenty of room in that one as the large bearish triangle pattern it was forming broke down in earnest this morning. Ticking TIME BOMB. Tic Tic Tic
STAY (VERY) SHORT EXEL
I don’t care at all about the miners, but…
Calling a generational top in the actual metal at the exact moment countries like Germany are frantically locking down and renationalizing their foreign gold deposits is…dubious.
miners, not commodity
No I know that’s your position. I was actually talking about Goldman Sachs.
The miners are valuable for one reason.
The own deposits that are gold and silver.
No one ever compared them to GE, or even decent “regular” miners.
“It’s the assets, the assets, Verne.”
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sold out of gld the other day. i never thought id do it. but im looking at 1450 on gold.
Hello Mister Fly!! I wanted to know how do wash sales effect your trading style? Does it cause you to be less active
I don’t buy back the same stock. If I sell EXK and want to own a miner, I’ll buy AG–for example.
Timestamp it, GLD will bottom in next 1-2 weeks. Gold to $3000
Pass the dutchie to the left hand side….
I couldn’t agree more. With the currency wars well underway and China stealthily accumulating whenever it dips big. Miners are not the trade but GLTR when it bottoms should be good. Paper is paper, metals are a store of wealth. I think the hedge funds liquidating is the perfect setup. Over the past 4 years many of the big hedge fund managers have sucked a saggy tit. I just put some bids in for true silver coins. any silver dollar coin that can be had for less than $27.50 will be safe. For pete’s sake silver was over $50 an ounce back in 1980.
I would love to know why hedge funds should be considered the market leader on anything.
If they are at all like the PE guys I deal with every day, they are day-late, dollar short lemmings who constantly overpay.
They all went to the same universities, after all.
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Market taking a little smoke break here. Should be back at 2.
Carnival Cruise Feces Bag is one of the funniest things I’ve ever read and I say that as an actual working comedian.
An actual working comedian or actual paid comedian?
Feel free to steal anything from here.
Futures market structure in gold is VERY bullish at the moment. Ill not pretend to know more than the almighty Fly, but if gold moves strongly upward, hard to imagine the miners don’t tag along…
I’m not quite that desperate yet but I appreciate the offer. You’re definitely a lot funnier than many of my colleagues though so I can’t promise they won’t rip you off.
The next bubble will be in mining asteroids for rare-alien metals
Elon Musk & Richard Branson will lead the way & issue asteroid mining IPO’s through BX, minting Monsieur le Flea aka Major Cohones, major coin
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GUYS WHY ARE NOT YOU WEARING BOW TIES? GOLD AND SILVER ARE GOING TO BE MUCH HIGHER…