Club Mulgoa

Tuesday, December 18, 2012

Stocks that have plummeted... but do not warrant it

When the POG climbs, gold stocks do not jump.  But when the converse occurs, the market takes an axe to the price of gold stocks.  Massive movement in the POG is not the result of long term balance between supply and demand.  POG has remained above USD$1600 per oz for a long time now, with ephemeral dips before that.

Hence, I am watching stocks in my failing portfolio that have been sold off for no good reasons.  There are several.  AZH, ABU, CRC, DRA, ERM, GOR, NYO, VKA, AUC.  If the POG lifts, I am ready to top up if the share price remains in the doldrum.  None of these stocks have produced bad announcements yet the market is punishing them for being... in the gold sector, even if producing gold like DRA.

I moved my ABU buy price to 3.7c (from 4.1c) and it fell to 3.9c.


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