a plague o both your houses

Futures up

Looks like your humble scribe did buy on the right day yesterday after all. All purchases in the five stocks outlined in IKN 328 on Sunday, subbers.
Just lucky timing I guess.

PS: Oilpatch watcher Setty makes a point about the gold/oil ratio and what it might mean for the gold mining stocks in his latest post, here.

PPS: Regular mailer DW just wrote in to ask about this call in the “Ten IKN random predictions for 2015” dated December 29th 2014:

1) Gold to trend up gradually, with a rough U$1,400/oz target for some time at the end of the year. For sure with the normal wobbly stuff along the way and I wouldn’t bat an eyelid to see it go under U$1,100/oz again at some point or other, but talk of its utter demise (South of 1k) strikes this author as plain silly talk from people who don’t get the sector.

His main question (excerpted) was…

“…but do you honestly think gold still has a chance of reaching $1400..(?)”

…and as I’m fiddling around with PS’s on this short post, let’s do it here. (Humble scribe’s note: Ladling on the congrats and doing the general ego-massage is a good way to get me to answer the thing that matters, DW isn’t stupid and I’m pathetic like that).

Honestly DW, I’m happy about the rest of that forecast (yes, the “only spike under $1.1k” has worked out) but think that these days $1.4k is too far to reach and my forecast will fail. I think there is upside in gold, U$1,200/oz year-end is eminently gettable and if you want a real stretch, I’d give U$1,300/oz an outsider’s chance. However (and there’s always a mitigating factor) I still think the decent end of the producing gold miner sectors are good buys right now because revenues from sales are only half the story. Costs are the other and they’re dropping for the operators. That means margins are beginning to grow again and the better quality stocks in the gold sector, the ones that have 1) strong/reasonable balance sheet positions and 2) have done the heavy lifting in the hard times so that now they’re mean lean profitable machines, are cheap and ready for their upmoves.

So there you go.

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