This 'patience' thing does not sell a lot of newsletters; just as it did not last summer when the warning was that gold was very over bought and sponsored by manic momos as people wanted to party and make coin. But it is the only rational way to go about it.
The fact is, gold was extremely vulnerable last summer. Now? Not so much. Gold will never get where it is going filled with a bunch of contented, comfortable holders. That goes quadruple for the gold stocks. Now the momos love the stock market and hate the PMs. That's fine. Actually, better than fine. It is the way I like it, from a comfort standpoint anyway.
http://www.biiwii.blogspot.com
http://www.biiwii.com
Nice post. The herd hates PM stocks. Warren Buffet bashing gold and now some author on seekingalpha who pumped gold stocks in 2011 has just said it is time to sell the gold miners. Too funny. Call me crazy, but I would not be shocked to see the HUI double in 2012. I am a buyer.
ReplyDeleteI would be Anon. Ultimate target is 3 snowmen (888) to 1000 on HUI, but I would be surprised to see it approached this year. I would settle for an upward break from the massive consolidation this year sometime. But we'll see.
ReplyDeleteand those levels may prove conservative Gary. We all know the pendulum swings to extremes both ways thus a period where gold stocks become the "darlings" even against the bullion, is definitely out there.
ReplyDeleteAh... TRUE BELIEVERS! I love it. I have little doubt the anxiety that is and has been building is going to be the exact thing fuels this thing. Well, that and the fundamental picture developing beneath the surface (so to speak). A big problem though is the partly accurate perception of gold stocks as being run by bumblers and scammers. I think the seniors (I own no senior producers, just silver royalty co. SLW) will do well, but some of the juniors are where the real fireworks will happen.
ReplyDeleteBut again, the timing is a bitch. I am going to keep it out on the horizon for my own risk management and sanity, but be ready to pull in if needed.
I do think your overall assessment is "spot on" Gary and although I cannot say how much longer this period of under performance will last, the rewards will be outstanding. IMO, I believe the current period is representative of late 1971 or 1977-1978 or mid-late 2002 early 2003 in terms of price action for the senior miners. The 1977-78 period is very interesting because it really frustrated investors with prices basically taking "3 steps forward and 2 1/2 steps back" for quite a while until they exploded by 1980 and did so with much more vigor AFTER the bullion had collapsed off of the high. In any case, the real fireworks are probably 1-2 years away yet downside from here should be contained, especially from a risk/reward basis.
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