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Online Share Trading

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The world of gold and gold stocks acording to me!

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john_1
Super Contributor
Over time I have made many comments on gold shares and I feel compelled to express my reasons. Gold is in an uptrend that has been in place for many years of this there is no doubt( this is not an inflation adjusted trend as it is still well below value if inflation and currencies are included, funny that many see gold as hedge against inflation). It is also fair to say that gold shares have been in a down trend for almost as long. The thing to remember is that in that for many here, their first introduction to the stock markets in SA has come from some kind of exposure to stories of past fortunes made during the last GOLD bull of the late 70's. So what has changed? The first thing is that in those days the mines were profitable. The second and this is very important. It was legislated (Gov intervention in the free market, never a good thing)) that South Africans were not able to buy direct exposure to gold (except through Kruger rand) this led to a correlation in the mining houses share price and the gold price that was exaggerated and did not take the risk and cost of mining into account. This is no longer true and as a result there is very little correlation in Gold and Gold Miners share prices. The last reason was the lack of alternative investments in gold on a global scale...SA was Gold. This too has changed as there are any number of gold mines outside of SA many of them mining higher grades in a much lower cost environment. So there is no need to be exposed to the perils of deep level mines. I hope I have made my views clear and that if you look around Platinum is the new gold.. But most Importantly if the trend reverses I will be the first to be going long.. Good luck.
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19 REPLIES 19
john_1
Super Contributor
There is one other little point..Nobody needs gold.It is nice to look at and before the invention of braso and chemical science its lack of oxidation was seen as valuble but that is about it.
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Picky
Regular Contributor
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Not applicable
Don't care what gold companies could rather have mined - even if its if it was frozen carbonite, flux capacitors or kubus cultures. If its tradable and it goes up and down - I'm happy.
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theyoungster
Super Contributor
everybody needs gold- one of the best conducters of electricity...so on so on....
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Not applicable
John ....get away from trying to trade using conventional wisdom...it simply doesnt work....utterly presumptious and ignorant of you to think that because u have no use for gold it has little value to anyone....have u ever traveled outside the first world?
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john_1
Super Contributor
I never said it has no value.. its current value is $919. I said it has no real ( industrial) use. I also said that if the trand changes I will trade it. In truth I should have been short gold shares, but at the time, did not have the market savy to enter such a trade.
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CrownA
Super Contributor
Johny boy -try not to be so philosophical (however you spell that!). times have changed, work with the future prospects for gold mining companies earnings potential vs gold price and Gold ETF/Kruger Rands. The past is past. It is tradeable like someone else just said - go with the flow - go with the trend...now I am getting philosofical.Bye
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Not applicable
John, don't forget all those African Americans and Latinos would not be able to prance around in their bling if no one bought gold shares to keep the mines going! Not to forget some middle aged white lounge lizards as well!
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Major
Regular Contributor
I'll keep a little gold as an alternative investment, but will keep clear of the SA gold stocks. Who would want to invest in a company which struggles to achieve positive return on equity and assets? Rather trade the gold stocks and invest in GND - nice predictable earnings growth from year to year and great dividends too.
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SimonPB
Valued Contributor
here' a thoguht. Gold is a lability for investors, not an asset. It pays no income but costs money to store and secure - hence a liability. The only way to profit is from a sale at a higher price.
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JDT
Regular Contributor
John, everyone needs gold. As mentioned earlier gold is one of the best conductors. What do you recon they use in electronic circuits like the I-phone or your trading PC to conduct electricity? GOLD!
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AJDK
Frequent Contributor
Thats why I bought my iPhone. Im actually investing in gold! Mmmm not very much of it though hey?
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louisg
Super Contributor
I googled this:"Gold is not just for rings, coins and ingots stored at the Federal Reserve Bank. It's a natural element with excellent properties for electronics. Gold is a good conductor of electricity, better than copper or aluminum. It's also a good conductor of heat and very malleable. It can be made into extremely thin foils or plated onto other metals to improve their conductivity. Gold doesn't oxidize the way other common metals do. Gold plated connectors and switch contacts will maintain low resistance connections even in humid atmospheres. That's why you'll find gold in nearly every electronic product, including cell phones."
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louisg
Super Contributor
And this too."$2.5 million worth of precious metals: According to the U.S. Geological Survey, each wireless phone circuit board contains $0.63 - not factoring the cost of recovery - of gold, platinum, silver, palladium and copper. Cell phone circuit boards yield more gold per ton (300 grams of gold per ton of circuit boards) than ore from gold mine operations (five grams of gold per ton of ore)." I assume this is the average gold mine operation.
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Brazen
Super Contributor
. . . WINE is a lability for investors, not an asset. It pays no income but costs money to store and secure - hence a liability. The only way to profit is from a sale at a higher price
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barry_1
Super Contributor
i thought u would say,better to drink it,whith which i would wholly agree!
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john_1
Super Contributor
of course when times are tough everybody dumps their gold to buy wine...
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barry_1
Super Contributor
Hello John,glad ushare my veiws re gold,platinum.I must say if it were not for plats inthe 1980 -ies i would probably not be trading today and thuis is definitely where the future lies. As far as gold goes u hit the nail on the head!Why do u think Anglo is getting out of the present mine?The reason ia because of the depth of the older mines is not viable as safety concerns cannot be addressed.Now i have several family members in the upper levels of mining ,including a son that forte is opening new mines.I would prefer not say where though....Safety has become a major inssue,but there is no way to increase safety to Zero three and more kilometers underground as the earth down there comes under tremendous pressure and as u Jhburgers know causes many minor earthquakes,pressure bursts can occur at any time.Its also unhealthy to mine so deep as it it also causes phycological changes in the workers.Those gold mines will never pay a dividend and most are working on borrowed time .
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john_1
Super Contributor
As a trend follower the gold miners trend is down and any upside is actually a counter trend rally..But just do the simple maths...Platinum is at $2200 gold is @ $926...platinum is mined at +/- 600m gold at 3000m they have the same wage cost and same management overheads.. one cant find places to put all the cash and the other cant find the cash at all..yet every single day somebody posts about buying gold shares..I just do not get it.
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