Friday, January 20, 2012

Party on Garth (Gold-Silver Ratio)

In reference to the previous post, here is what this rise in silver has done to the GSR.  'Party the $%*! on Garth' is the would-be message. 

Have you looked at the poor senior gold miners?  GSR rises, they go down.  GSR goes down, they go down.  This is what you signed up for when you got your gold bug membership card.  The world hates you, and everybody makes coin except you.  All the gold bug pumpers are charlatans and stocks and bonds are where it is at. 

Yes, I am joking.  Something has got to give, because we are not going to proceed with an everything bullish but gold stocks environment.


  1. $HUI dove because Kinross has admitted failure with Tasiast, Hecla had to shut down Lucky Friday cos of rock bursts killing people, and I still haven't found out what made Harmony dive this week.

    I'm asserting that if you factor out those three components, plus the knock-on selling that would have hit Goldcorp and Agnico and the rest, $HUI would have actually been moving up.

    I guess the result of this is that a lot of miners stink, and we should stay away from a broad-based strategy like buying $HUI/GDX, in favour of selecting gold miner companies that are actually managed properly.

    Has anyone anywhere ventured a reason as to why silver all of a sudden shot up 5%?

    1. GG, ABX, and NEM are 40% of the HUI. Those 3 stocks were higher in early 2008 than they are in early 2012. The same is true for many of the other stocks in the HUI like AEM, HL, KGC. The only winner has been Randgold and that one trades like a tech stock. It is included in the Nasdaq 100. I agree with Jim Dines who said recently on a radio show that it is all mass psychology. It is common for a particular metal to go up without the underlying stocks participating, but eventually they will. In the previous gold bull market, the jr exploration stocks did not skyrocket until after gold fell from $800 to $400.