logiic versus fml, page-3

As has been pointed out to me in response to my previous posts along your lines, Alba, the market is not always logical and plays favourites in a way that is hard to comprehend.

I first got into shares in a meaningful way during the dot com boom and was moderately burnt by those pesky stocks that I'd thought for so long were gonna bust until I eventually caved in to the hysteria and bought. It was illogical and proved so in the end. Same with sub-prime.

It's the same now. How can all this sovereign debt and money printing not result in the POG increasing X fold? How can RE prices in Aust continue the current pace with wages steady and IR and inflation rising? How can gold not rise substantially when real IR around the world are negative?

Like the dot com and sub-prime bubbles, I think it is only a matter of time before the fundamentals come shining through.

I admit I'm surprised at the current SP and I have probably missed good earns along the way in the last few months but I don't mind losing a few battles along the way if I win the war.

POG going up against all currencies (whether good news or bad hits the market) is a good sign IMO.

It was illogical that during Dubai and the initial stages of Greek debt prob that the POG went down due to its "risky status". All of a sudden the market has turned logical on that front. Now we are hearing "safe haven" again.

The SP may very well drop further with a GFC 2 or Sovereign Debt 1 but I'm happy with my bet that should this happen quality gold stocks won't stay down for long. And while I don't like the RSPT, I think $$$ night come to some companies like FML because of it - a little less upside for a whole lot less downside.

I can't see a huge June Q ozs-wise for FML but I still don't want to be out IF a significant reserve upgrade hits the market. (But maybe if the market is still being illogical it won't do much for the SP. I just don't want to risk it after being in for more than 12 months.)

If the sector were booming, the POG had topped and reserves were 3 or 4 X current I'd be worried. Right now I'm happy being on the side of logic.

And I keep wondering what price gold IF the USD tanks? At the POG high in Dec the USDX was, from memory, around 73-74. It is now 82.5 and the POG only 40 bucks off the record. (And as I type the Aussie POG going for a run at 1300 again...)

Everything is going fanatstic for FML, except the SP. Pretty soon investors are going to come across the sector in general and FML in particular and ask why - they'll find no real fundamental reason for it - just like us.

That's what I'm betting on - DYOR.


Cheers,


C12