Goldtent TA Paradise

Gold Stocks Rule # 1

1. Alex33 says:

   March 6, 2020 - 10:53 am at 10:53 am

   Indeed, and I will repeat it for the last time, most gold names, and especially silver names are fully valued. That’s why I sold ALL my silver stocks this week, and I only have holdings in gold related names that are either top quality or strongly undervalued. If not the case and fully valued I prefer holding gold. Most investors do not agree and believe the whole sector is cheap, but that’s unfortunately not the case.

   • JSKauai says:

     March 6, 2020 - 11:13 am at 11:13 am

     I agree I am beginning to think it is time to lighten up on miners and buy more cerveza koolaid tonic.

   • DanX says:

     March 6, 2020 - 11:14 am at 11:14 am

     I only trade short term and buy and hold is not really my strategy but would you mind sharing some tips on how you determine overvalued or not. Gold to miner ratios or something else? Thanks Alex.

     • Fullgoldcrown says:

       March 6, 2020 - 11:22 am at 11:22 am

       Alex KNOWS value in this Sector

       He is worth his weight in Gold

       🙂

     • Alex33 says:

       March 6, 2020 - 11:28 am at 11:28 am

       I never look to gold to miner rations as this metric does not takes into account the cost inflation at most miners where costs are up 200-300% since 2000. I look at senior miners that are slightly undervalued and look how much the market wants to pay in terms of CF multiple or production ounces vs market Cap. Barrick typically trades at 11-12 times CF depending year you take. In terms of production Valuation Valuation of Barrick (EV) is 40.000 Million for 5.2M ounces production in 2020, so you pay 7.690$ per production ounce. Based on this you can see if a mid cap name has potential to re-rate or not. SSR mining on these metrics looks rather fully valued, taking into account the cost basis for SSR is far higher than for Barrick.

       • Alex33 says:

         March 6, 2020 - 11:35 am at 11:35 am

         Based on CF and production valuation, NEM is 10% cheaper than GOLD. AU, KGC, AUY are all 20-40% cheaper than GOLD, but carry different risks of course!! But the real names to have are the new entrants in the sector that are still unknown like EQX last year or other names. The common names mostly discussed here and on Twitter are unfortunately well known names. Other names with potential are companies that acquire an asset on the cheap from sellers like GOLD, Beneficiaries this year were SAR.AX and TGZ.

         • DanX says:

           March 6, 2020 - 11:56 am at 11:56 am

           Alex, Thank you! this is pure gold. Does this undevalued/overvalued metric share the same cycle as GOLD or do they trade to their own tune? For example, if we have a proven miner, that’s undervalued, and we buy in when the cycle low for gold and undervalued miner matches it would create a perfect storm on the upside, no?

           And buying a fully valued miner at gold bottom would not provide the same returns. Am I getting this right?