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drbubb

GOLD SHARES / such as: GDX, GDXJ, CDNX etc.

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I've got 3 shares on limit order at the moment. I carried out most of my buying over the past week or two.

 

 

Here http://www.greenenergyinvestors.com/index.php?showtopic=14768

 

That one was a bit heated (beat buy and hold) and fizzled out. I simply would like a thread for infrequent maximum profit, low risk option trades. So we can learn from bubbs years of experience! Not in anyway an alternative to holding a core of pms but complementary to leverage more metal

 

Gb

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That one was a bit heated (beat buy and hold) and fizzled out. I simply would like a thread for infrequent maximum profit, low risk option trades. So we can learn from bubbs years of experience! Not in anyway an alternative to holding a core of pms but complementary to leverage more metal

 

Gb

I think we may be in for a volatile time - I am cautious, and holding cash (mostly HK$),

and playing the markets thru Options and some Juniors that I like.

 

I don't think this is a time to "get heroic", or to use debt.

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I think we may be in for a volatile time - I am cautious, and holding cash (mostly HK$),

and playing the markets thru Options and some Juniors that I like.

 

I don't think this is a time to "get heroic", or to use debt.

 

Who is using debt! I would wager not many feckless borrowers on here. But I agree, the movement of gold over the next few months is unclear. Fundamentals have not really changed so hopefully the trend will reassert itself sooner rather than later if it is going to. My worry remains a repeat in the equity markets of last year(in an election year?) which could drive metals down to breach long term trend line.

 

Until it is obvious how things will play out I am stockpiling cash, ready to liquidate if necessary.

 

Gb.

 

Ps. Still think the options thread is a good idea,if only to discuss setups amongst those less familiar with paired option trades

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Who is using debt!

I would wager not many feckless borrowers on here.

I reckon that there may still be many with mortgages on their homes.

 

If these are floating rate mortgages, they may carry a high risk.

And even if fixed rates, people can still lose their homes of their incomes become impaired somehow

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I reckon that there may still be many with mortgages on their homes.

 

If these are floating rate mortgages, they may carry a high risk.

And even if fixed rates, people can still lose their homes of their incomes become impaired somehow

 

Interest rates must surely rise at some stage but surely this cannot occur without either massive printing and devaluation of western currencies. It seems to me zirp will be around for as long as USA can convince foreign central banks to keep taking on us treasuries. Once this slows beyond a certain point the fed will be simply monetizing the debt and deficit and a currency confidence collapse will occur. Can foreign central banks continue to buy forever, I would contend no - this would be severely inflationary if continued unabated.

 

For the last 30 years the us has funded its trade deficit with credit growth. This has now begun to contract, what happens now bubb?

 

Gb

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THESE CHARTS belong here too...

 

Right now, the Gold to CDNX ratio is as cheap as it's been ... Ever!

True.

But don't forget many small exploration companies are nothing more than "burning matches",

acheiving little with their exploration efforts whilst maintaining the lifestyles of their executives.

You are buying lottery tickets, but the game itself is expensive to run.

 

Here's a long term chart:

 

CDNX / Canadian Venture Index ... update

 

cdnx.png

 

Now, compare its performance (Below) with that of XAU companies, that actually produce gold. From 2002 to 2007, CDNX and XAU move more-or-less in tandem. Partly, that was because CDNX comes had become very undervaled in 2000-2002. And partly, because these small companies were seen as a smart-and-leverage way to "play" rising gold prices.

 

But then the 2007-2008 "crash" came. And CDNX fell by 85.6% from :

 

Peak Level : 3,371.57 - 23 Apr.2007

Low- Level : 0,684.31 - 08 Dec.2008

Decline---- : 2,887.26 - over 19 Mos. : -85.6%

Bounce to- : 2,423.79 - 08 Mar.2011

Low- Level : 0,684.31 - 08 Dec.2008

Points rise : 1,739.48 - over 27 Mos : +254.2%

Note: (1739.48 / 2887.26 = 60.24% retracement)

 

That big drop impaired CDNX equities more than XAU equities, which had cash flow from Gold production. The smaller companies soon arn out of cash and had to raise money at low prices, dilluting the value of their equity. So when the bounceback came, these companies had vastly increased the number of shares outstanding, and prices rises were blunted by the dillution.

 

CDNX versus XAU Index ... update : And-GLD

 

cdnxetc.png

 

Prices are again at a critical support level. Gold, XAU, and CDNX may bounce from their current oversold condition. Or they may not. If prices fall again, many of the smaller companies may fall into the low-priced-dillution-trap once again.

 

cdnxetgld.png

 

Perma-link: http://tinyurl.com/CDNXetc-2005

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Much Longer Term CDNX - based on some Cut and Past

 

cdnx08plus.gif

 

Updated

 

cdnx08plus2.gif

 

perma-link: http://tinyurl.com/CDNX-1983

 

This shows how LITTLE progress these stocks have made going all the way back to 1983 !

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CDNX Long Term chart

 

(A comment from a broker friend):

 

Thanks for the chart. As I mentioned I basically started in the business in 1985 so I inherently know it well!

 

You are right, tough market if you basically went long in 1983.

 

I see that the significant percentage drops have been noted.

 

I also looked at the average gains from the lows of '87, 93, 97, 07, and 2010.

It is about 193%

 

I also see that the bottoms seem to be around the 1000 level (overdone in the Bre-Ex crash and the global credit crash), and the tops anywhere from 2100 to 3600 (overdone in 87 and 07?).

 

We are at 1380 now so I hope we are closer to the bottom than the top!

 

 

(My response):

 

I certainly remember the GOOD markets, and benefitted from them.

 

The trick is to survive the bad ones, and have money and confidence near the start of each new bull.

 

Also, I am very uncertain about the present market. I think it can stabilise if Gold holds $1600, but if that doesn't happen, we mahe have a long hard fall before the next Big Bull market starts up.

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I bought Landore Resources on the 10th of April and I'm now looking for an exit point. The PPO chart gives some nice peaks and troughs with the share price.

 

It looks to me like I have bought at good point in the trough (time will tell if this works out to be the low point)

 

I'm hoping for the PPO to pop up to around 100ish on the monthly view and around 50ish on the daily view before I pick my exact exit point.

 

lndl10year.png

 

Uploaded with ImageShack.us

 

lndl1year.png

 

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Not totally sure if this is related to this thread, but the following downgrade does indicate growth in my opinion.

 

Newcrest Mining has cut its forecasts for gold and copper production for 2012 after carrying out a major review of its operations.

Newcrest this morning said gold production for the 2012 financial year would be reduced to 2.25-2.35 million ounces from 2.43-2.55 million ounces.

It also lowered its forecast for copper production to 70,000-75,000 tonnes from 75,000-80,000 tonnes.

 

 

Read more: http://www.smh.com.au/business/newcrest-cuts-production-forecasts-20120424-1xi0r.html#ixzz1suZi5rUi

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There is a good chance the bottom for the gold mining sector was put in yesterday. I've been buying what I perceive to be quality.

 

 

That's interesting, I have buy signals using my custom indicator for both GDX and GDXJ triggered on the close yesterday;

GDXJ-1.png

 

GDX weekly also could be at a low, based on Money Flow Index and Disparity Index levels;

gdx-1.png

 

I'm buying more GDX and GDXJ later.

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There is a good chance the bottom for the gold mining sector was put in yesterday. I've been buying what I perceive to be quality.

 

i am sure that no one would accuse you of deliberately purchasing something you knew for a certainty to be garbage. my point is to ask whether you might share some of your valuations with us?

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well, it's more pan american silver for me today at the bargain price of $17.?? (can't remember exact). my average is now $19.20 per share. best of luck everyone.

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well, it's more pan american silver for me today at the bargain price of $17.?? (can't remember exact). my average is now $19.20 per share. best of luck everyone.

Do you think we are heading below 15 $CAD?

 

paar.png

 

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i am sure that no one would accuse you of deliberately purchasing something you knew for a certainty to be garbage. my point is to ask whether you might share some of your valuations with us?

 

Sure... Pretium Resources, Argonaut Gold, Franco Nevada, GDXJ, PSLV (when the premium to NAV is less than 5%) and few others...

 

Cosigo looks a good punt here with a drill permit decision due hopefully sometime in the next few months. But then as long time holders will know we have been waiting for quite some time already so who knows!

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I'm buying more GDX and GDXJ later.

 

Iv got that ETF on my buying list. Its just that iv not been brave enough to buy it yet :(

 

If I had i jumped on bored when i first started look at this ETf then i would have been underwater on it now. So Im glad that i held off.

 

When is a good time to buy? I do not know. But im going to hold off a bit longer i think. I do not think that we have seen a bottom in the miners yet

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Iv got that ETF on my buying list. Its just that iv not been brave enough to buy it yet :(

 

If I had i jumped on bored when i first started look at this ETf then i would have been underwater on it now. So Im glad that i held off.

 

When is a good time to buy? I do not know. But im going to hold off a bit longer i think. I do not think that we have seen a bottom in the miners yet

 

The low is a good time to buy.

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The low is a good time to buy.

I'm hoping we just hit some kind of low, as I bought some GDXJ. Boy, have the juniors taken a beating in the last 6m. I have been waiting to pull the trigger. Today is the day.

:unsure:

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I'm hoping we just hit some kind of low, as I bought some GDXJ. Boy, have the juniors taken a beating in the last 6m. I have been waiting to pull the trigger. Today is the day.

:unsure:

 

I thought the low might have been 2 weeks ago, and bought quite a load.

 

GDXJ daily

GDXJdaily.png

 

 

The all time low for GDXJ was $21.18 on 5th February 2010, it's been down as low as $21.16 today, if it closes below there it would not be a good sign...

 

This next chart is from www.sentimentrader.com;

Sectorbreadthgoldbugs.png

 

The lower three indicators have similar readings that they had at around the 2008 low in gold stocks.

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Do you think we are heading below 15 $CAD?

Obviously not, otherwise why would I have been buying it above?

 

Equally, I do not know that it won't either.

 

I have finished my buying today. More SVM and a bit more GSM. No money left now so it is in the hands of the gods for me. Nothing I own is down more than 8% in total at this time so not frightened yet. Another week or two of this and will be well under water.

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Obviously not, otherwise why would I have been buying it above?

 

Equally, I do not know that it won't either.

 

I have finished my buying today. More SVM and a bit more GSM. No money left now so it is in the hands of the gods for me. Nothing I own is down more than 8% in total at this time so not frightened yet. Another week or two of this and will be well under water.

Equally as obvious :huh:

 

I'm sorry I asked ;):P

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Portfolio as a whole now 10.65% in the red with some items over the 13% mark. No way of knowing when and where it will end. Each market turn is a new page in history with its own unique characteristics. I give up with technical analysis last year after about 6 months of hard work.to say that I did not find anything consist ant enough is an understatement. In the end I have turned to the principles of value investing because there is one thing I do believe in. That thing is that the market discounts eventually. The key is eventually and so the longer your holding period the greater your chances of the market realising your value calculations. Assuming your calculations are correct.The cornerstone of value investing is an estimate of intrinsic value. That is easier said than done. You have to arrive at a value that you can be sufficiently confident in to keep you on the straight and narrow through all the ups and downs.

 

Here today in the spring of 2012 I am making my bones. Time will tell whether I have made something worthy of taking into the future to build upon and refine, or whether I am a hopeless gambler about to lose his shirt.

 

Good luck everyone who is currentlyon board this ship that I will neglect to name for the time being.

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