Gold Fields Limited (ADR) (NYSE:GFI)

Gold miners are cheap relative to where the price of gold is trading.

ibd # 1 sector to be i . ibd composite was sector high.

Sitting on top of a gold mine - literally! South African miners can reclaim the top production spot if they can resolve some issues related to safety, costs, infrastructure, etc. It won't happen overnight, but looking long, I'm buying proven reserves that far exceed some of the big boys at a fraction of the price. Understanding short-term volatility and establishing a tolerance for pain is part of the game. I'm banking on one of two options here: 1) Recovery: they get their "poop in a group" and fix their problems and start improving - 2) M&A: someone comes along and buys their assets (which I see as significantly undervalued copared to industry peers). Either way, I win.

I like this fellow Nick Holland. His concept of "notional cash expenditure" is an important corrective to the illusory "cash costs" figures bandied about by other miners.

I think that inflation will be higher in the next couple of years, and this company produces gold at about $615.00 / oz. That should be very profitable in the next few years.

Good earnings.

GFI is a combination of gold/uncertainty/inflation plays, a limited asset play on their gold fields, and a bet on (or against, rather) political risk. Gold demand/prices is likely to go up, long-term, given international gov't spending/debt levels. Even given the historical price highs we've seen recently, there's a strong chance that gold will stabilize higher than we're currently anticipating.

The political risk is more interesting, though. Despite some concern over the future of the gold industry in South Africa, Cape Town is not going to nationalize the gold industry, as it's actually successful and generates tax-revenue. There's a trend against nationalization in the Legislature, and in my analysis, it's not going to happen (YMMV). Investors are afraid of this "eventuality" and are pricing GFI appropriately.

Gold factor - quantative easing

Jstegma's (99.82 rating) pitch on ABX. I reprint it here, "There is a lot of dumb money in gold. The same sort of people who bought into the dot-com boom in 1999 and bought into the housing boom in 2006 and believed oil was going to $500 a barrel last summer.

Now it looks like oil is going to $5 a barrel and gold is going to $5000. Or maybe my friends the "dumb money" will continue their streak of idiotic rallies that end in tears."

With all the spending our government is doing and planning to do, and some projecting gold prices to be over $1,000 in the next several years, it is hard not to have some gold stock for insurance.

Hit a high of 8.33 recently then dropped. Will probably drop a little more then begin another rising spell. And when all those printed dollars begin to rear their ugly heads? Gold will soar and with it the miners too.

Positives are the oversold and thrashed precious metals and other base commodities which should rebound around or shortly after Thanksgiving, 2008. The Big Boys like ADR will benefit first.

Negatives are the ongoing power generation crisis in South Africa and the shuttering of several mines, in part due to manipulated COMEX spot prices. Physical metal in one's possession shall be proven supreme. This is favoring all PM stocks with quality management and resources.

Gold will do well over the next year. Also, book value is $7.38 and stock is currently $7.30. They have posted consistant growth and have a handle on their debt. I am upping this for at least a year.

PE is okay, large market cap, and gold is going up due to a terrible dollar.

Oversold stocks

Very cheap relative to likely future price of gold, and even current price of gold.

With the value of the dollar falling and oil prices surging gold has no where to go but up in the long run. I think gold is a great investment if you can afford it. I also think that most things in the energy sector will also rise. Silver as well as other metals will also see big gains. I would stay away from things in the hospitality fields. Also I personally won't invest in military related companies but they most will likely see gains as well. I don't think I need to say much about financial companies but I'd stay away from them. Basics like foods will also see a higher demand.

Inflation will cause gold to shine...

Three to four star transition stock in a preferred industry.