Junior Gold Miners Are Dirt Cheap

Source:

Today, numerous gold juniors are so cheap that they’re trading below book value. Let me put this in perspective: at these levels these companies are cheaper than their mining assets alone. By buying today you are essentially getting the gold reserves for FREE.

...Numerous pundits have made a big deal of stocks’ recent rally and gold’s plunge. Some even went so far as to claim that gold has lost its “safe haven” status. They’re horribly mistaken.

For one thing, gold has held up incredibly well compared to both stocks AND commodities this year. Stocks have fallen 32% in 2008 thus far. Oil is down 26%. Zinc is down 58%. Gold is only down 16%.

In simple terms: Had you put all of your money in gold at the beginning of 2008, you would have outperformed virtually every asset class in existence. It’s also worth considering that much of the downward pressure in gold has come predominantly from the “paper” market.

...gold mining stocks are at historic lows relative to the price of gold. If you go back to 1984, mining stocks have only been this cheap relative to the price of gold two other times: 1986 and 2001, both of which were around the END of BEAR markets.

In fact, today, numerous gold juniors are so cheap that they’re trading below book value. Let me put this in perspective: at these levels these companies are cheaper than their mining assets alone. By buying today you are essentially getting the gold reserves for FREE.

Related Articles

Get Our Streetwise Reports Newsletter Free

A valid email address is required to subscribe