What's PM stocks excuse for not appreciating? Being $1650+ for going on 3 years is not enough to grow and attract investors. The current market is a growth market, so why are low cost PM miners having such a hard time showing it?
Checking the premise:
Three years ago, Yamana was trading at about $11.00. So it is up $5.50 (50%) over the three years, plus it has thrown off a 1.4% average annual dividend. I'm happy with Yamana's performance, (especially when option sales/profits are added).
Many/most other mining companies have languished during the three years you speak of. However, they do not share Yamana's low cost structure. That said, Yamna's performance over a 5 year period is about even, so your question has merit.
I have spoken to many financial advisors and they simply do not allocate funds to the mining sector. They put their customers money into consumer goods, financials, insurance, healthcare, food and gas/oil stocks first. Asset allocation to mining is at an all time low.
It is as if the PM miners and the products they create are in competition to their framework of value. These are paper people, they look at and invest in what they know...
Another consideration is the diversion of funds into the ETF's GLD & SLV. These funds would normally be invested in the physical metal's or the mining stocks.
Cumulatively, this starves the mining companies of capital and ultimately supports the PM market because capital constraints also constrain production.
One thing that has minimal constraint on it's production is paper currencies... Hence their continual devaluation. Fortunately PM's have kept pace or increased their buying power over the long haul...
Yamana has an "ALL IN" cost of about $850/oz and is about to increase production at the same time it retires the cost of building the new mines it is opening. On a co-product basis, Yamana is producing gold at an annualized rate of $245/oz... Both numbers are likely headed down!
It is easy to make a case to buy AUY with the stock down 20% from its recent high... Even in this tenuous market...
Sentiment: Strong Buy
It’s hard to disagree with those who answered your post because the views were very good.
However you need to identify what you’re watching when saying the market is “up”. All major broad indices, except the Dow Jones Industrial average are indicating an enormous Head & Shoulders pattern (H&S), which is an indicator of economic problems ahead. The DJIA is shallow enough to allow the big players with manipulative designs to make it seem as if it is about to explode upwards, such as pension funds and Wall Street hedge funds, among others.
The Baltic Dry Index is down, inflation numbers are being manipulated to give a wrong impression that it is somewhat tamed, unemployment remains at high levels, especially among those in their low 20’s and teenagers, government spending is out of control, immigration “reform” is about to be passed, which will make the lot in life of all of us much more difficult as politicians attempt to cultivate votes among those not legally entitled to vote. And on the immigration issue, if it passes, those who are then considered “legal” will be shunned by employers as they find new ways to find illegal alien workers. The only survivor in the above sort of scenario are those who take a financial flight to safety, and those who can manipulate market expectations in the political and financial sector to their advantage to make it seem as if everything is in recovery mode.
It has been said that the Chinese perspective on the future is to look many years in advance, as far as their designs on world domination. The individuals on this message board better do the same when looking where this country is headed, and not think that there might not be the possibility timelines could stretch out beyond their ability to realize wealth creation in the PM markets, as gains there are being opposed by very powerful forces (banksters and socialists) whose every effort is to see that wealth can NEVER be achieved in the PM markets.
Note that the PM markets have been trading in a more or less flat range for nearly 2 years, with the manipulation being directed at making losers of those in American markets. Those in Asia always seem to be handed lower PM prices. As soon as PMs in the American market are entered pricing explodes upwards for the first couple of hours. Then the small fry are fleeced. This has been going on for some time, more than a year.
Because their costs have gone up dramatically and the mining sector "expert" analysts keep forecasting that gold will go down. Who wants to buy a company where the expenses are forecast to go up (energy, etc.) and the revenues are forecast to go down? Pure BS, I know, but that's what "the masses" are hearing.
Here's the median forecasts for gold prices from those clowns (first column is the year the forecast was made, next columns are the median forecast for 2, 3 & 4 years out):
Year +2 yr +3 yr +4 yr
2007 $700 $650 $600
2008 $875 $800 $750
2009 $1100 $1000 $950
2010 $1300 $1200 $1100
2011 $1900 $1550 $1300
Notice how every year the forecast is for gold price to decline in the future, but every year they have to keep bumping up their forecasts?