Newmont's plight underscores an important lesson: While gold-mining companies can be a levered bet on rising gold prices, the myriad costs of running a global mining operation can get in the way.
In the last 12 months, Newmont shares are up 18%. But with production declining and demand strong, costs could mount and eat into profits -- and the stock price.
So if you believe gold at $560 an ounce still looks cheap, a stake in the raw metal via an exchange-traded fund such as StreetTracks Gold Shares or the iShares Comex Gold Trust, could be a better investment than a mining stock like Newmont.
The bone I would pick with the article is that while over the last month the ETF has been better to own, that will not be the case forever.
At some point I think I will go back to Anglogold. The timing of such a move might be great or not, but the ETF will not be the better hold forever.