“Historically with gold miners, if you can buy the low-cost leader below book value, its proven to be an outstanding investment.”
NOTE – The above chart was produced in May. Since then the sector has fallen nearly 30% implying a price to book value of less than 0.7! The chart doesn’t show it, but gold stocks were trading above book value (about 1.1x) when gold bottomed at $255.95 on April 2, 2001, which was the beginning of the bull market and an even more dramatic fact: going back as far as 1997 there was not one episode where gold producers as a group traded below book value – and the late ’90s was known as the “nuclear winter” for the gold mining industry!
One more quote to leave you with – “You don’t make money buying when you’re optimistic. You have to actually run completely counter to your own emotional psychology.”
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