Brad Zigler

Another Way to Hedge Gold Stocks

Using DZZ hedges gold volatility, not the equity or management risk embedded in a stock's price.

Thus, with gold volatility suppressed, the value (negative or positive) of the company's management talent shines through (filtered through stock market beta, of course).




On Dec 02 08:59 PM Georealist wrote:

> Just a few things that need some light..First.when someone BUYS DZZ
> they are most certainly NOT hedging AUY or any other mining stock.
> They ARE hedging (establishing a Double Short positions) gold..<br/>Minin...
> stocks move..more thanone would hope..in alternate universes..and
> an investor is certainly not covering specific risk in AUY...
>
> I have a little different take on the whole long position side.....and
> the short. I'd BUY gold (GLD) any time we move to a standard deviation
> below 2 for the 52 week moving average. I'd go long DZZ (in a conservative
> averaging in basis!) at 2 or 3 standard deviations ABOVE the 52 week
> average gold price.
> It's all about the percentages baby...they didn't build Las Vegas
> going all in.