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  • Who Shot J.R.? The Junior Gold Mining Murder Mystery [View article]
    Although you make some very good points regarding historic drops and rebounds, insider buying, and possible manipulation of pricing, you have made all these arguments before, while making these recommendations, and there are quite a few things he did not seem to consider. The first is that the junior gold exchange has not been around a very long time, so we do not have a multi-decade historical chart to look at. The only thing we can do is look at gold and extrapolate. Gold is in a bubble, which has been swelling since the turn-of-the-century. I know, because I was buying gold at a little over $200 an ounce in the 1990s. If we are in inflationary economy, as the gold bugs continually argue, then, yes, gold and its mining stocks would be a good place to be in the long run. However, we are not in an inflationary economy, we are in a deflationary economy, and this is almost strictly due to population dynamics. In a deflationary economy, one can certainly expect commodities to deflate -- as in a bubble losing air; and, although the junior gold stocks have suffered rather too quickly, and will probably enjoy some kind of bounce, I and of right we just may have seen the last great high for gold, probably in this decade. Those who were buying gold juniors with you, Toby, Phil, and the others, when you wrote of what a great deal they were at $21, $19, $16, $14... have suffered quite terribly all the way down to $10 a share, don't you think? Why is it that it must be because someone else is manipulating the markets? After all, from what I read, someone is always manipulating the markets, and that is the nature of the beast we deal with, when we invest in the stock market. I think the more fruitful question here would be: is there not a great possibility you have the overall picture wrong, and gold will deflate even further from here? If so the juniors will not be gaining back that 80%, but just a series of rebounds setting lower highs. Just a thought.
    Jul 2 01:36 PM | 1 Like Like |Link to Comment
  • John Paulson, whose hedge fund is the single biggest owner of the SPDR Gold Trust (GLD), maintained a 21.8M-share position even as the value of its holdings fell ~$165M in the latest quarter. But all that remains of his Barrick Gold (ABX) holdings is 36K call options vs. 915K shares at the end of 2012. Other positions in miners AU, NG, AEM, IAG and ANV were unchanged or modestly changed. [View news story]
    Right! And 36K = 36000 call options = 36,000 times 100 shares per option = 3,600,000 stock options according to elementary math, which begat the T Brady question previously presented. Perhaps the poster actually meant 36 call options, but that is doubtful by what has been written, which seems quite clear. Assuming the posting is correct, it appears that Mr. Paulson has gone from holding 915,000 shares outright to holding call options on 3.6 million shares, which obviously does not reflect a change in Mr. Paulson's attitude that gold is going to retreat further, but quite the opposite. He has reduced his cost, increased his leverage, and accepted a greater risk. What would be more interesting is to know the term on the call options, as they could be super options fully one year out or very short term. My guess is they are at least 2014 calls, but who knows?
    May 16 01:16 PM | Likes Like |Link to Comment
  • Gold: The Recent Collapse And Approaching All-Time High [View article]
    I hear this argument often, but was buying gold at $275 per ounce right up to the time the gold market took off 14 years ago. In fact, gold was stuck there, in a very narrow range, for a very long time. So, have the costs of mining gold inflated so much that the very base is over three times what it was 14 years ago? Just a point to ponder.
    Apr 16 03:21 PM | 1 Like Like |Link to Comment
  • Gold: The Recent Collapse And Approaching All-Time High [View article]
    I believe Cyprus has done just that, as they had very large gold reserves they are liquidating for the purpose of paying up against their debt. Seems to me that falls under the category of liquidation.
    Apr 16 03:21 PM | Likes Like |Link to Comment