Comments on: Buy Goldcorp (GG)

By: oyz79

oyz79 — Sat, 07 Nov 2009 01:36:44 +0000

David Rosenberg made a similarly bullish argument for gold based on central bank purchases and the appearance that they now view gold as a currency http://scottsinvestments.blogspot.com/2009/11/david-rosenberg-makes-strong-case-for.html

By: KR

KR — Fri, 06 Nov 2009 21:00:24 +0000

Thanks Jim. Always appreciate the level of details and insight you provide. Even if someone disagrees with you, they can do so objectively.

By: Jim Jubak

Jim Jubak — Fri, 06 Nov 2009 17:10:45 +0000

Let’s see if I can answer some of these. I’m disappointed in KGC. They have persistent mine problems that have cut into production. That said, I don’t think I’d sell it while gold is rallying even with those problems. Gold at the moment is correlated with stocks since it’s a falling dollar that is driving both. That doesn’t mean gold and stocks have to stay correlated. Gold is a hedge against some varieties of turmoil and slower economic growth that would send stocks lower. Gee, I’ve added a second gold stock to a portfolio with around 25 stocks. That’s an exposure of less than 10%. Gold and other commodities are also correlated, although they are at the moment. So some benefits of diversification by buying gold in addition to other commodity plays. A 20% projected return in 12 months with relatively low risk holds up prtty well to other projectd returns that I can see. Note that all projected returns for 2010, mine included,are based on some very uncertain assumptions about the economy in the second half of 2010.

By: wallst.finance

wallst.finance — Fri, 06 Nov 2009 16:34:44 +0000

Jim, I am sure you would have considered the crude shooting up as $ slides into the cost of production equation. However, have not really seen much discussion around that. Last time commodities peaked crude peaked as well resulting in higher cost of production. Would you assume a similar percent of cost increase as the end product?

By: Roswell Buckeye

Roswell Buckeye — Fri, 06 Nov 2009 14:09:43 +0000

Jim, does this mean Kinross will be taken out shortly. It nearly reached it’s target a few weeks ago, then fell back. Is it still a buy today? Will you keep both KGC and GG in the portfolio? Thanks.