If these two stocks don't outperform big time this year...I'm going under...retirement..savings..cash on hand..you name it..it's invested in these two stocks. I realize one shouldn't do that..but what the heck..can't take it with you.I believe I will be very well off in two years or less....any comments??.......zj
Many of the reason I own KGC have been posted by others here. I also currently own: HL, GFI, CDE, and the juniors: NSU.TO and MAN.TO.
The juniors have much greater risk but because they are so much further down the food chain than the seniors, many of which have already increased 300-400% since 2001, their upside potential is far greater at the moment.
I only started to invest in gold bullion and coins this past autumn after the seniors had already advanced 300-400%. I did this because of the utterly compelling and structural problems in the US economy, not because I thought there would be quick further parabolic runs upward of these senior stocks. That easy money is behind us. The reasons are:
A secular bear market in the dollar, a growing and out of control Current Account deficit requiring the FED to trash the value of the dollar to cheapen exports, the exporting of deflation and loss of any pricing power of US corporations by the Chinese pegging their currency to ours, consumer debt currently at $30 Trillion (ironically US consumers are pulling in their horns and starting to save more, which will be a great hit on the retail sector and consumer SPENDING is 67% of GDP), the increase of M3 by $2 Trillion dollars since 2000, and the avowed statements by Greenspan and Barnacke of the FED to print whatever paper money is needed to avoid outright Japanese style deflation here, the beginning of repatriation of foreign money invested here (why would they invest their money here when the FED said they were going to make the dollar go down and MMF returns are negative?), and finally my utter conviction that the bear market will not be over in spite of whatever bear market rallies lie ahead, until the Dow falls to 3000-5000, are all reason I invested in gold and gold shares after their big runup.
But there will be severe and frightening price declines in gold on the way to this generational bull market in PM's. Before hedging became prevalent (and smoothed out some of the volatility), it was common for gold prices to change on average $10 a day or more. Some of that volatility will be back.
If you believe in the structural problems of our economy, then you should hold gold and gold shares regardless of gut wrenching pullbacks and see them as buying opportunities. Watching these stocks daily will give anyone who is not utterly convinced of the powerful underlying reasons to hold gold an ulcer.
Look at charts of gold since the bull market of 2001. It has always reverted back to its and the HUI's rising 200 DMA (currently $325/ounce and 125) and begun a powerful new leg up. I am not saying gold or the HUI will retrench all that much, but it would be very healthy and a great buying opportunity.
Thanks "Lipo"...Sounds like you have seen your share of people that think they need or want to look different.Since I'm ignorant of the subject, I'll let it go ay that.I'll assume you own MNG or KGC...If so...Why and what are your thoughts about future....Thanks...zj
Thanks for the post...My earlier research indicated little (5%) or no hedging,with no plans in the future for it.
However, you should really ask someone that is more knowledgable about the subject.My positions are long term.I believe gold shares will move with the POG..(at some point)It's no secret about last years success in gold funds and shares.I hope the manipulation ends and we all make $$$...........Regards..zj
I have a comment zj....YIKEESSSSS!!! I full heartedly believe in this stock but I can't urge you enough to spread your investment dollars out. I agree you can't take it with you but you can't throw it away either. Not diversifying at least a little is awful risky. But I sure wish you the best my friend, I'd sure hate to see you go down.
I'd put some of that in CBJ. CBJ is a sleeper.
It's hedged quite a bit right now but at the start of 04 332,000 oz production will be unhedged. 05 that will jump to 473,000 oz.
In 04 Rosebel comes on line and company wide production will hit 700k oz. After that it should level off to 500K.
I think you'll be okay. I'm in big on KGC, and in smaller on a few others. What the heck, roll the dice. This one sounds beter than any of the other gold plays I have seen.
Good luck, to both of us.