Sakata

Gold Bulls Should Stay Away from Gold Stocks

The article is not lame, and it does make some valid comments. But I think the main point is a little off the mark. The scatter plot shows that, even when gold is above $500, gold stocks go up quicker than gold itself. They also go down quicker. All it says is that a random selection of gold stocks has a create volatility than gold. None of this is surprising. Note that the scatter plot is misleading because the scale is different on each axis.

What the author fails to point out (and sharkboy does) is that if you pick the best companies then gold stocks will out perform gold more often than not in a gold bull market. The last year or so has, as a whole, been an exception to this, but the last four months have proven it to be very true. Since the beginning of Decemeber HUI has increase 54% against gold's 28%. My personal portfolio of junior mining stocks has gone up 49%.

Blanket statements about whether or not to hold a certain class of stock are bound to be controversial. An experienced investor knows which ones to pick and will be able to make more with stocks than with gold in a large percentage of cases.

John Embry: Gold and Silver Are the Ultimate Insurance Policy

Excellent interview. Lots of good, thought provoking material there.

I see that more and more people who should know are lining up against GLD (and SLV) and recommending CEF and GTU. It made me switch my holdings in my IRAs back in January.