Forum Archive Index - May 2002

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi Mr Nua,



>
> 
>The fact that many posters here dismiss some of the Gold postings as
>"Gold nutters", disguises the fact that there have been (and may
>continue to be) some good gains to be made in Gold stocks. The
>graphs below show the Spot gold price from 1979 and a close up of
>the current price. Not too sexy up until a few months ago. But few
>can deny that there has been a definite change in trend.
> 
>The situation reminds me of the internet stock explosion. Many
>posters using fundamental analysis were glad to see the end of the
>dot boom. Comments like "Warren didn't invest in it because he
>didn't understand it" and "Punters investing on air" hid the fact
>that there were 100's of %s to be made if you had your exit 
>criterea in place.
>
>



I think that is a fair summary of the situation, albeit I would say 
the gold punters of today are perhaps more savvy than the internet 
punters of a couple of years back.   The gold punters at least 
realise there is a limit that is set somewhere below the sky ;-).

I think the main point that gold investors need to bring to mind is 
that I haven't seen a discounted cash flow analysis based on the 
demand for gold *products* that justifies a price of $US800 an ounce.

If gold does reach that price, I think it will be because of a 
speculative bubble of fear, manifesting itself as a greed for gold 
irrational run up.  The key point if playing with gold, as Mr Nua 
empahsises, is to have an exit strategy in place.  I'd say this is a 
strong case for using T/A.

If I was investing in gold, I would certainly go for Gold shares, 
rather than the metal, as at least the shares pay a dividend.   So I 
don't regard those of you who invest in gold shares as 'nutters' at 
all  (that word may have appeared in my last post, but it was a 
quote from someone else).   Just as long as gold share investors 
realise they have the same potential to get hurt as those who piled 
into the tech boom without an exit strategy, I regard my point as 
being made.

Myself, I have limited time to devote to investment matters.  I 
can't be hovering over a screen every day, and I have a only very 
small exposure only to the US market.   So rather than follow gold I 
intend to look around a bit on the US market for shares that are sold 
down in distress, much like 'Coke' was twelve or so years back.  I've 
no doubt that Warren will be having a good look around too.  But it's 
a big market over there so I think there will be enough shares for 
both of us ;-).



>
> 
> Posters should understand that simply because your strategy is
> different to others, their strategy (or yours) is not necessarily
> wrong. Anyone who is making money on gold stocks right now - Good on
> you. Everyone who is making money from regular dividends - Good on
> you too. 
> 
> 



Fair enough.  There's room for everyone in the 'sharechat' chatroom.  
It just seemed that lately the gold faction had crowded everyone else 
out over the last few days.

SNOOPY



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