A short article with several long term graphs.
First one: Gold
Second One : Silver
Third one : Gold / silver ratio. The recent silver run (and gold pullback) brought the ratio back to the 70s
Number 4 : The Barron’s gold Mining index is back up but still did not break the 2011 top.
The last one (and probably the most important to me) : The Barron’s Gold Mining index divided by the gold price.
It shows you how cheap mining companies are !
Happy Investing
Comme je vous l’ai mentionné déjà plusieurs fois, les valorisations sont élevées sur le marché US.
Ces P/E élevés sont certainement le fait d’avoir en face des taux extrêmement bas, voire négatifs.
Cet environnement biaise totalement la valeur des actifs.
Autre conséquence, les investisseurs prennent de plus en plus de risques alors que les titres continuent de monter dans un environnement de baisse des bénéfices.
Ils achètent les titres au plus haut (les technos en exemple ci-après) alors que le momentum global annonce la baisse (advance / decline line). En résumé, ils achètent les grandes capitalisations technos (FOMO = Fear Of Missing Opportunity)
Lire la suiteCentral Banks (China, Russia and some other small) have been buying gold. The net balance started to be positive from 2010
Unfortunately for the European and North American “tax payers”, their Central banks did not purchase any gold ounces
Comment bien choisir le projet minier dans lequel vous pensez investir ?
Pour imager le propos, voici une anecdote.
Quatre investisseurs se croisent à un salon minier et parlent chacun d’un projet aurifère dans lequel ils ont engagé des fonds.
Lire la suiteIn 2018 I mentioned : The life path of a mine
Discover a deposit, bring value, get the authorizations (permit), build it (financing) and put into production cannot be done as fast as some people love to think.
Hereafter some graphs showing the required duration for all steps to enter into production.
Ascertainment : It needs (average) 16,9 years. Some countries are showing a big spread between the shorter and the longer period. I assume it is because of the difficulties to get a permit (The Grail) and financing problems (difficult market, hard to raise money).
In a normal situation (I mean historical), mining stocks should overperform gold when the underlying (metal) is raising.
In a gold bull market the gold shares are leading and now they are lagging. Something is wrong, terribly wrong.
I just took the GDX ETF, and the HUI and compared them to the gold price.
from the beginning of the year, stocks are really lagging
On a 3 years period, it is exactly the same.
Lire la suite
Very often graphs are telling you more than 1,000 words.
1 – The weighting of the 5 major SP500 stocks is today at a record level.
2 – The Apple, AAPL case (imho) is showing the total exuberance of the stock market. The market capitalization of this company is now the equivalent of the entire Australian stock market !
3 – Apple Market cap is also bigger than the entire energy sector
4 – Price evolution of Apple is de-correlated with its earnings, leaving the gravity !
5 – On the market side, nobody seems really worried. Indexes are climbing every day higher. The very relevant indicator, the well-known PUT / CALL ratio is hitting a very low level. It means nobody has fear and everybody is positive on the future market raise.
6 – The number of “bears” seeing the fall of the SP500 is also at a low level
7 – The VIX index (volatility) is also at one of its lowest level
I am hearing analysts, people, bloggers expecting a continuation of the market rally and telling to whom who want to hear that “the pessimists will be decimated”.
8 – The US stock market valuation. Prices to estimated sales and estimated earnings are topping. P/E seems expensive (source Shiller)
9 – Finally the SP500 EV / EBITDA is at the same level than when the 2000 bubble exploded
10- Interest rates history can be also a trigger of the next stock market fall
All of above, is telling me it is smelling not good at all and something is cooking. It is pushing me to find another place where to put the money.
Gold is on the verge of a fantastic coming back up after its big fall from its top of 2011 (1900 USD) to its 2015 low (1050 USD). Gold is the underlying for mining shares and I would like to point the undervaluation of this sector.
A – First of all Gold has always kept its purchasing power against all the currencies
B – Gold has only been down 4 of past 20 years
C – Mining stocks compared to SP500 and vs Gold are cheap
D – Gold Miners are bottoming
E – Gold Mining Juniors are much cheaper than Seniors
As a global summary, I think it is time to leave the entire regular market to plunge into the mining sector. You can find different categories of companies, Producers (less risk but lower reward and also some stocks already responded to the last gold increase), developers (risky but big reward ahead especially when the project is in a safe jurisdiction and with a permit) and finally explorers (high risk and huge reward but also big losses).
I have identified a gold stock with a huge potential. If you want to know more about it you can contact me here : Contact
You also can read all my english articles here : https://www.crottaz-finance.ch/blog/category/english/
Happy Investing and please do not forget to read my disclaimer