You know I'm bullish from my posts last two weeks. I've finally figured it out. GDXJ is an index tracking fund. What's in this index. Mostly small exploratory companies. They get themselves in the index, every time GDXJ gets an influx of money they get investment from GDXJ investors. Most do not find economical ore so they explore again and again, raising money again and again. This is the root cause of GDXJ underperformance. Understand this, GET OUT. GDXJ is down so hard ,maybe there's more bounce coming. Long term hold NO.
ok sell, but use 5% or 10$ of your sale proceeds o buy gdxj options 2 years out...you can buy a call on 100 shares of gdxj @ 20 for $100, if it goes to 30 40 50 that is 10X 20X OR 30X YOUR option cost. you can sell at anytime before 2 yrs and get some "time value back also....just a thought, hope your loss is not too much.
You may be right that this may go lower yet, but it is closer to the bottom than the top. The price action of gdxj is mostly due to the fact that mining costs are going higher and the ore quality around the world is going lower. Investors are pricing in not a rise in the price of gold, but a marked decline below the $800-$900 threshold of profitable extraction. This is why gold miners in general, and junior in particular, are punished well beyond physical gold. It also means that if the long term sentiment returns to $2000 oz and if fracking lowers the cost of oil in the next half decade, the rally will be very fast and furious. The long term horizon is still currency debasement and a global lack of supply of gold. In any global fiscal crisis, gold miners will be the top performers. So the catalysts for a rapid spike on a 5-10 year horizon are very good. The downside is limited if you believe that input costs might trend lower moving forward.
You may be over-thinking this and trying to put an explanation to a psychology-driven market movement. Just like the media stories follow the market (hear good news when market is going up, bad when it is going down), individual investors do the same -- we always search for logical reasons that the market is going against what our own solid analysis would indicate. We can come up with conspiracy theories (a la the ALL CAPS guy) or find some legitimate holes in our theories. However, my consistent experience as a long-time contrarian investor has been that my original reasons (based on alot of research and analysis) for choosing an investment far outweigh these market-induced explanations that I come up with later. Contrarians are always tested like this and those without true beliefs in their original reasons for investing in something often end up buying high and selling low. As an aside, while your theory probably has some merit, it is far outweighed by the incredibly strong arguments for gold strength over the longterm (and GDX/GDXJ will certainly participate in that in spades) as well as the hyper-oversold current state of gold, GDX, GDXJ (if you still believe the bull is alive). Remember how much you appreciate gold every time a politician or central banker opens their mouth.
They are speculative in nature but some of the juniors became seniors or were bought by a senior minor in the past. I'm not going to say most of them do that but look at the earnings. The single digit PE ratio should keep you in the game a little while longer. Patience is a virtue! Good luck no matter what you do!.
Sentiment: Strong Buy
I got a thumbs down in no time. You disagree, post your opinion here. Tell me why you disagree. I also researched GDX big miners. They are putting off excavation on ore reserves that are better than the small miners have. That should tell you something about the juniors prospect. NO, this is not a recommendation to buy GDX.
It's your money, you're free to do whatever you want with them, however if you're selling for a loss that's not right thing to do, the shares of gold producers are very volatile and there non-zero probability that if you wait a bit you'll be break even.
For example in 2007 I started buying GDX at around $34 and it went down all the way to $15. I admit it was scary to be down 40% but I kept adding (last buy was under $18) and the GDX did eventually rebound and I made some money when I sold it at $48. Gold went up too violent in 2011, that's why we have all these doldrums. The currency debasement is going to continue and the market will behave irrational only to some point and then revert to sanity, or so I think.