Food For Thought
Something I would like to “throw out there” to get goldtenters thinking about. In a few of my postings and maybe more so in comments of others posts, I have tried to stress “risk vs reward”. The two main points I would like to get across are with most, if not all of us in complete agreement, we are in a major precious metals bull market, is that there are so many companies to choose from. Why not Maximize one’s return (everyone thinks about that) while Minimizing one’s risk. First, limit your jurisdictions to where there is less likelihood of problems or surprises.(reducing risk) Second, when given the choice of two stocks to allocate your scare resource(capital) choose the one that is at or close to it’s all time high.(maximizing return) In most cases you will get much better percentage returns and achieve them much sooner as the other choice has to work it’s way thru months or more likely years of overhead price resistance. Here is an example and I am not trying to be critical, just to illustrate what I mean. Fully, just posted the chart of GOLD. Good chart(Fully is an excellent chartist and I always pay attention when he posts a chart) My preference though, would be to choose NEM vs GOLD. Both are very close in size, quality, fundamentals etc. Look at both historical charts below. GOLD has years of overhead resistance and NEM just finished tying it’s ATH. They will both make money, both go on to be good investments. I suggest that NEM will outperform and in a quicker time frame. This isn’t even the best example because these stocks are so close and both very high quality. It becomes even more important when dealing with second tier and junior exploration stocks. Look at the historical chart before investing/speculating. Given a choice of which of two companies to place your hard earned capital I almost always will choose the one with the least resistance above.(exception might be if a company has a new monster project that is going to pay off in the near future)
Just Excellent Advice !
Some would look at Barrick and say…well hey it should get to it’s ATH… while Newmont is already there
But yes…what about all the chart resistance.
Good point
Thanks Master
From a TA perspective, should be true. The mindless sheep will follow Mr. Fancypants (Buffet) into Barrick though so there’s the intangible of that psychology. Also, I think the resistance on some of these charts is overplayed…So many just sold years ago so it’s not like we have millions of shares ready to sell once price hits whatever level on the charts. That being said, I think you could buy a basket of GOLD, KL and NEM and be pretty pleased. 🙂
My Basket is called XGD.To
🙂
You don’t own any individual miners?
Excellent points. NEM is indeed way more advanced in its technical picture, especially with respect to very long term MAs like t the 400 and 600WMAs. That being said, there will be sustained periods where other miners significantly outperform to make up ground. But yes, from a guy and hold perspective, at this point NEM is on cruise control.