A. Portmann's  Instablog

A. Portmann
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I have over 15 years of experience in the banking and finance industry. I hold a BBA and am a Certified International Investment Analyst (CIIA) and portfolio manager. I am the fund manager at GPA Portfolio Management in Zurich, Switzerland. We offer professional portfolio management with a... More
  • The Potential Of Junior Miners 0 comments
    Mar 25, 2013 10:43 AM

    Current Valuation of Gold Mining Equities offer substantial Upside

    The chart below show just how much gold miners are currently undervalued in regards to the gold price. The equity/gold ratio calculated below (The Philadelphia Gold & Silver Mine Index divided by the Gold Spot price) shows that the equities have never in the last thirty years traded at such low levels.

    (click to enlarge)

    Junior Miners offer larger Potential

    Normally Junior Gold Miners have a higher leverage (or beta) to the gold price than the Senior Gold Miners.

    This can be seen on the chart below:

    (click to enlarge)Times of Junior Miner Outperformance

    The green marked time-periods show where Junior Miners outperformed the Senior Miners. This usually occurs while the gold price is in a massive upward trend.

    We expect this outperformance of Junior Miners to repeat itself in the next up leg of the gold price.

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