Sunday, September 22, 2013


A wonderful point is made about gold in the classic "Treasure of the Sierra Madre", when an old fellow explains “Gold ain’t good for nothing except making jewelry and gold teeth”…but this is in a flop house full of men who were drawn away from reality by the prospect of finding the precious metal.

Gold and the gold miners shot up this week immediately after it was determined that the Fed would not taper it's bond buying. The jump faded quickly, I'm not sure why, perhaps reality sunk in that the Fed would indeed taper someday.

In the past I thought of gold as a hedge of protection…but I have learned it is not. Some say it’s a hedge against inflation…I’m not sure about that either. Some say it’s a hedge against chaos, but the calamity that occurred in New Orleans showed that bottled water was a better hedge and some project that ammunition will be a better hedge in the future.

So I don’t know what gold it other than it’s still highly desirable. Its future price is indeterminate to me, but the allure of gold continues and it seems that gold miners might be better place as they are striving to cut cost and bring back unprofitable mines into operation.

Barrick gold, ABX, seems to be undervalued by comparison with GLD.

Barrick does pay a modest dividend of 1.1%. The dividend was around 3% before being cut as Barrick’s finances were being cleaned up. I would hope that the larger dividend would be returned in time.

I sure don’t know how where the price of ABX will end up and I likely won’t be adding any more, but I won’t be selling yet either. It may be time to just out it away as a longer term holding and be patient.

What did I see in my weekend review?

The 10-yr Treasury yield continues a little slide now back to 2.73 %

IBD (Investor Business Daily) continues: Confirmed Up Trend

Copernicus Systems: Long, but mixed

Moneys Flows:  still positive with 1/3 trending higher and portfolio price all pointing higher

Currently my "Stocks for a Trade" now consists of:

ABX -2.94%

ETF’s for a trade are:

QQQ +6.88% 

IWM +7.53%

IBB +3.84%

What will I do?

I could be adding IBB and QQQ, perhaps I should add IWM

I hope you have a great week.

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