May 14, 2010
– Comments (2) |
RELATED TICKERS: BVN
in gold goes directly to their bottom line.
BVN & IAG
Good call man, I am very bullish on both too.
Both solid choices, although at these specific prices I prefer BVN as offering a slightly wider margin of error in terms of entry price. IAG shares have surged rather dramatically in recent weeks.
Looks like IWASRIGHT about IAMGOLD. :)
IAG shares closed at $14.62 on the day that article appeared. At today's intraday high of $19.60, that's a 34% gain in just over 3 months.
Because I look for even the gold mining shares to fall in sympathy with the broader market in the initial stages of the Dow's next decline, I would limit the extent of my buying activity at this stage. If you are immune to the fright of a wildly volatile market, then by all means a buy at today's levels will pay off handsomely, but most investors get trigger happy when they slip into the red, and gold's gut-wrenching swings can sink you into the red as quickly as any other sector. I was unaffacted by the monster correction, but only because my conviction in the broader trend permitted me to hold onto 100% of my gold and silver exposure despite a correction that sent mining shares plummeting by as much as 70%. Please understand, I'm not saying that anything resembling that prior dip is on the table ... it is not. I'm only alluding to that event as an example of how important it is, if you share my conviction in the broader multi-year bull market trend, to remain long and strong with gold and silver no matter what sorts of swings may arise. If you are unshakable, then entry price be damned, because all the quality names will go enormously higher.
During the steepest drops in the Dow, I have found that bullion proxies like CEF have performed far better than the miners. All told, I expect the miners to vastly outperform the proxies going forward, but I just sense that the first couple of weeks or so of a preciptous fall for the U.S. markets could carve a deep dip into some of these high-flying mining shares. A portion of the initial liquidating masses always leaps like lemmings into Treasuries, but the proportion that will turn to gold this time around will be far larger than during the 2008 event.
Finally, if Euro weakness keeps gold prices above the $1,230 level even amidst a further-strengthening dollar, then my cautionary tone will prove overly cautious. :) Just giving you all some things to keep in mind going forward. These are frightful times for investors, no matter WHAT one is invested in.
Be careful, and Fool on!