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Long a buy and hold investor, I now believe that buy and hold has to be re-evaluated in a world of ever increasing, instant information and huge gyrations in markets all over the world. A value investor at heart, I anchor my portfolio with conservative funds and blue chip dividend stocks, but... More
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Retirefund
  • Mining pure money, from the money pits. The "Go to" currencies of Gold and Silver! 0 comments
    Sep 3, 2011 2:40 PM | about stocks: ABX, GG, KGC, AUY, AUQ, SLW, NUSMF, GLD, SLV, POT, TLTHF, RDNAF, LACDF

    As I have said in a previous post, Gold does not have a price, Gold "IS" the price!

    IT is also my opinion that gold miners are very much undervalued as they now are mining "money" and that the cost of that mining is determined in fiat currency.

    Now does it really matter whether it is the U.S. dollar, the Canadian dollar, the Australian dollar, the Euro, the Chinese RMB, the Brazilian Real, the Chilean or Mexican Peso or any of the devalued currencies of Africa that these miners operate in?  No it does not!  You see, there is a race to the bottom for fiat currencies as governments around the world do not seem to want to own the strong currency left standing.  The United States is no exception.

    The exasperated Swiss have been doing everything in their power to keep their now inflated Franc from being the "go to" currency in Europe. The Canadian and Australian governments have been fretting over their strong dollars for two years now.   As investors flock to a basket of these few stand outs to, hopefully, stem the bleeding, reality is slowly creeping into the investing mindset.

    The "go to " currencies are now quite obvious. They are Gold and Silver!
    Just witness the spectacular growth in new bank paper products like the (NYSEARCA:GLD) and the (NYSEARCA:SLV). Many investors have been flocking to these seemingly smart new plays as a "safe haven" should things get even worse than they already are.(A 60-40 chance at this point). Sorry, but I don't have a lot of faith in "Wallstreet  created" safe havens any more. When I think of all those wonderful derivatives created from mortgage back securities 3-5 years ago, I get a shiver of deja vu as I ponder the gold and silver back derivatives of the (GLD) and the (SLV) and their ilk.

    I own physical gold and silver. I have for years. However it is the gold and silver miners that have caught my fancy in the past 2 years. I have been accumulating a number of them since 2009, (along with other resource sticks) and in particular, this past summer.  You see, I no longer see these as strictly "resource" stocks. I believe that, in this unstable environment, these companies are actually mining money.


    I am listing here 7 gold miners (and one silver) with several mines in operation, increasing production rates and solid management (as evidenced by their operations) Stalwarts Gold Corp (NYSE:GG) Barrick Gold (NYSE:ABX), and Kinross Gold (NYSE:KGC)  as well as some smaller operators have huge upside potential such as SanGold (TSX-SGR) and Brigus Gold (TSX-BRD). 

    I also like one very unique, but speculative stock Nautilus Minerals due to its big first mover advantage (both technical and geographical) in seabed mining. Nautilus is listed in Toronto (TSX-NUS) and in London (AIM-NUS)

    My silver pick is Great Panther Silver (TSX-GPR)


    Although September and October are not historically great months for stocks, they are usually great for gold stocks as India and China approach their marriage season, and the growing middle classes search for physical gold for thier dowries.

    If you do not already own physical gold and silver, or feel you are late getting to that party, (You are not) then maybe you should consider the "Money Miners" for your portfolio.






    Disclosure: I am long KGC, ABX, SLW.

    Additional disclosure: Long SGR-TSX, BRD-TSX, NUS-TSX, Other resource stocks mentioned include Potash Corp, Talison Lithium, Western Lithium and Rodinia Lithium.
    Stocks: ABX, GG, KGC, AUY, AUQ, SLW, NUSMF, GLD, SLV, POT, TLTHF, RDNAF, LACDF
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