Abandoning Gold Mining Stocks for an ETF (NEM, AU, ETFs: GLD, IAU)

Roger Nusbaum submits: Barron's Online has an article entitled Forget Newmont! Go for Gold With ETFs (sub. req.) Excerpt:

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.

It makes the point about mining stocks with NEM that I made a month ago with Anglogold (AU).

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.