kneifl my biggest position in gold stocks, is a precious metals fund. for the most part do not care for gold long term, though I have invested in some gold stocks in the past year (two).
I have some jr. not many and most of these are spec. pure and simple and most of them will not get to gold mine stage.
I have a mutual fund in this because some fund managers do a good job of following the jr. mid cap. would not own most gold stocks in the long term.
one perfect example (or a few) is barrick abx, for years it would just trade sideways, making nothing for shareholders. even though they grew in size.
many gold companies have reserve life of 9 years or less, and even the ones that claim longer reserve life often mine the best cheapest ore first (makes sense), so the mine profits will go down. sometimes often they can expand mine life but this costs money.
I would be in the sector, just as hedge to the falling US dollar.
by the way there are some exceptions to gold stock, paying divs. most NA gold companies have a small yield less than 1%. however some int. gold companies are higher.
in South Africa they often have high divs, because they will just have one mine or two, after they are gone so are the divs....some have been good plays, do not follow it.
would not encourage anyone to buy a gold stock and keep it for ten years or even five, these have to be looked at much more.
now some stocks I own ect.
WGI Western gold fields, jr, on Toronto. good management and in the US so little political risk...
mine friendly areas, some parts, many in the US would not allow you to ever set up a mine...ever.
AEM Anico Eagle. trades on US, cdn. growing production, so a good one to look at over the next 1-3 years.
ABX okay long term barrick is not a winner however last year has done well, this is a sr. and would prefer it to newmont. though newmont is turning it self around...... these willl follow gold.
own small amount have sold puts on abx various months, well mainly oct, and nov....highst put is 38.
Kinross or goldcorp are not bad midcaps, probably would prefer kinross at this point.
yamana will have great cash flow going forward assuming current gold price, they paid to much for Meridian so a hold for now....at least for me.
by the way going forward the cost of mining is only going higher....many have avg. cost approaching 400.
often these costs never count (just operationg) finding and funding the mine.....hundread of millions.....often.
thanks
selkirk
