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Lewis Braham Does Gold …

edited August 31 in Other Investing
Article Title: - ”Don’t Miss Out on the Rally in Gold Mining Stocks. Here’s What to Buy Now.”

Author - Lewis Braham

Source - Barron’s September 2, 2024

Brief Excerpt: ”Fund investors should be paying attention to these mining stocks but aren’t. While the behemoth $69.1 billion SPDR Gold Shares exchange-traded fund (ticker: GLD) for bullion is up 21% this year, the $14.7 billion VanEck Gold Miners ETF (GDX) is up an even more impressive 26%. Yet, mining-stock funds in Morningstar’s Equity Precious Metals category have seen $1.7 billion in outflows; the VanEck ETF, the largest, alone has lost $1.3 billion. Meanwhile, SPDR Gold Shares, in Morningstar’s Commodities Focused category, has lost $1.8 billion.”


Some funds mentioned in article:

First Eagle Gold / SGGDX
iShares MSCI Global Gold Miners / RING
OCM Gold / OCMAX
SPDR Gold Shares / GLD
VanEck Gold Miners / GDX
VanEck International Investors Gold / INIYX
VanEck Junior Gold Miners / GDXJ


Lewis knows an awful lot about investing. I’m a bit struck by the exuberance on display here. But I concur with his long term bullish sentiment. Unfortunately, owning mining stocks can sometimes feel like riding in the Bumper-Cars at a carnival. You’ll probably need a subscription to read the article. I’ll attempt to LINK.

Comments

  • I wonder if all those people fleeing mining funds come from the boat I'm in. USAGX is up 30% over the last 12 months, and would have to nearly double in price to match what I paid for it in August 2011. If I hadn't bought again in 2017 at ~1/3 the price I wouldn't be within spitting distance of getting out.

    If Lewis can convince people to go out and keep buying those miners I'll be tickled to death.
  • You may be able to read this article without a subscription using the link below.
    Link
  • edited September 1
    Thanks @Observant1 / Hope it helps.

    In terms of gold, I prefer at my age to play indirectly through diversified funds. Both PRPFX and GAA have some precious metals / miner exposure. One thought in consolidating down to a smaller number of holdings Friday was that it tended to increase slightly my exposure to those two funds.

    If your interest in gold has to do with a weaker dollar in the future, you might also consider foreign equities, bonds and currencies as another way to play the game. They should appreciate if / when the dollar weakens.

    To be fair here - LB isn’t so much touting gold as he is recommending taking advantage in the discrepancy between the price movement in the metals and the lethargic move in miners’ stock prices in response. ISTM he makes a reasonable argument in that respect. But my past experience tells me to be very cautious around the metals sectors. They can turn on a dime - not always in the direction you’d like.
  • After several years of high inflation and geopolitical conflict, we sold the entire gold position.0, IAU, this summer. It was very volatile but we held on that resulted a modest gain.

    If we venture into precious mretal, not so much the miners, we will use a more diversified vehicle such as PRPFX as @hank suggested above.
  • Ratio of GDX:GLD shows how depressed the miners are relative to gold-bullion. The ratio peaked at 0.586 in 2006, bottomed at 0.1089 in 2015 and at 0.1081 again in 2020 (pandemic low). Now it's only 0.167; the recent range is 0.136-0.173. It doesn't have to reach 0.586 to make money in miners.

    Of course, the miners were to blame in the past because they focused on exploration and production, not profitability. It is said that they are now different and more aware of shareholders' interests. Some even pay variable-dividends. But it would take more to lure back former investors who got burned repeatedly in the past.

    In the 1-yr chart of the ratio GDX:GLD, change the dates as needed.
    https://stockcharts.com/h-sc/ui?s=GDX:GLD&p=D&yr=1&mn=0&dy=0&id=p72470038519
  • edited September 1
    USAGX was excellent in the early 2000's when Mark Johnson was at the helm.

    https://www.sec.gov/Archives/edgar/data/908695/000090869508000147/pe39.txt

  • If I understand @yogibearbull's chart correctly, USAGX was at .227 when I first bought it a few months before Mark Johnson retired. It is now at .091. GDX:GLD was at .32 when I first bought USAGX.
  • @WABAC, I see your August 2011 numbers for the ratio of price-charts, _USAGX:_GLD. The default StockCharts are for distribution-adjusted-prices, USAGX:GLD. So, at first, I didn't see your numbers, but later I did. Current ratio is the same either way.
  • @yogibearbull, the current number I ran from the closing prices shown at M* last Friday. Sounds like I was in the vicinity of the right numbers. I find that site heavy going. I wasn't quite sure where to look.

    The purchase date was 2011-8-12 if anyone is curious. It was a small purchase to begin with, and was intended as a sort of break-glass emergency investment. So given the price history, there has been much happening since then. :)
  • How long to stick with the miners?

    Maybe this is the break-glass market I've been waiting for.

    We'll see if USAGX gets within sniffing distance of what I paid in December 2012.
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