timing, page-33

“you come up with all sorts of scenarios why it should be rated higher - and I simply state that it isn't - and nothing to do with the "iceberg"”
OK Reiner, I think we have different time frames and probably different meanings of certain terms like "market" so we can disagree on fine points while we agree overall. Also let’s not forget ABU has already been re-rated much higher over the last 2 months since its low. Now its taking a breather as others have caught up but while its taking its breather the POG has broken out and keeps rising. At some point ABU should move again on the higher POG and I think it will be when this seller is cleared.

I think there are three factors contributing to the leveraged gold stocks strength.
More leverage to a rising gold price for traders (obvious enough).
Possible forced margin calls on late comer shorts – and these leveraged goldies will have had the a lot of shorts added as gold was bottoming.
Profit taking on prior year shorts while they still have large profits.

The problem with these stocks is that they are moving much faster than the POG and may have gotten ahead of themselves (some may still be running at breakeven or negative cash flow even at US$1380.
A switch from something like ABU (expected low cost producer) now to jump into those high leverage stocks might be quite risky as some of those must be more vulnerable to correction now (as ABU was after moving from 2.1 to 3.9).
Not saying they will correct yet – perhaps POG will go much further before finding any significant selling but if it does it just adds to the catch up potential for ABU when the seller is cleared (my opinion).