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Gold stocks remain cheap

johnNjohnN
edited December 2019 in Fund Discussions
https://seekingalpha.com/article/4313638-gold-stocks-remain-cheap

Gold stocks remain cheap

Summary

Gold stocks remain very undervalued relative to gold. They’ve spent most of this bull languishing under stock-panic extremes, which means they still have vast room to mean revert higher.
Such low gold-stock prices compared to prevailing gold levels virtually guarantee the miners will enjoy seriously-outsized gains during future gold uplegs. They can way-outperform gold for years before normalizing.
But that longer-term super-bullish fundamental outlook doesn’t negate the need for periodic corrections to rebalance sentiment. The recent one is likely still underway today, as key gold-stock indicators haven't bottomed.





Maybe time to dip a little into gold and pm...

Comments

  • Gary
    What gives you that idea?
  • hank
    edited December 2019
    johnN said:

    Maybe time to dip a little into gold and pm


    @JohnN -

    Your conclusion doesn’t necessarily follow from what your linked article says. The article’s premise (which I’ve seen this year from other gold observers) is that p/m mining stock prices haven’t kept pace with gold’s price advance lately. So, provided gold stays where it is, gold (mining) stocks should go higher.

    We’re talking about two different things here: the metal itself and the companies that mine, refine and distribute it. The article doesn’t (and really can’t) answer the question of whether the people who invest in the metal have it right or those who invest in the mining stocks have it right. Could be either.

    I’ll say playing with metals and miners can be profitable. It can also feel like a living hell - as this is one volatile area.
  • Old_JoeOld_Joe
    Closely reasoned opinions not our specialty...
  • MikeMMikeM
    I cut my gold investment, IAU, in half in early November. Mainly because rate hikes were being placed on hold and it felt like a recession was now pushed further in the future. I bought in Dec. '18 because of political turmoil, rising rates and the possibility of a major pull back in equities. I'm watching for the next sign of upward movement in gold to increase my stake again. I think when equities correct at some point, maybe in early 2020 gold may move again.

    I guess I've never heard the term gold stocks before, but I won't touch the miners. To volatile for this guy, but my hats off to those who know how to play them.
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