I don't think there will be the same rush to cash that there was...

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tasboy

2,910 Posts.

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24/09/19

12:35

Post #: 40544766
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Originally posted by Exised: ↑

By in large I agree...now is the time to be prudent.

It is important to note however that in a liquidity event gold equities will go down the same as the broader market. In fact the gold price will too. It is a simple function of the fact that when fear sets in anything with a Bid on it will be sold into. The recovery and corresponding spike up however is a sight to behold in such an event...think POG March 2008 to Aug 2008 downturn and corresponding spike after. I've always been heavy gold and gold miners, during the GFC period I held NCM and NDY/Normandy (largest aussie goldies back then..) and it was actually very frustrating to watch as it was being sold off the same as other companies in the crisis.

The physical bullion markets on the other hand is a different fish altogether. Nothing was on the shelves and everything was on backorder in both gold and silver...

Luckily I don't see that kind of liquidity event in the horizon. I used to believe that such an event was in the horizon a few years ago and loaded up on gold and gold miners in 2015/2016. My feared event didn't eventuate but was lucky enough to have held on to NST, EVN, SAR and RRL since then and have been pleasantly rewarded with these multi baggers. With GOR, I do hope she joins my other goldies in being a multi bagger. She definitely has the right ingredients to be successful.

What I think we will have soon however is a slow grind and volatility spikes similar to the 2000 to 2003 crisis due to ongoing trade war, Brexit, and various geopolitical etc concerns. A passive asset liquidity event might still happen like what I feared in 2015/2016 but I've learnt my lesson on the staying power of these passive ETF holders. Calm as a cucumber in the face of the massive clifts marked below, like sheep to the slaughter really...

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I don't think there will be the same rush to cash that there was in the 2008 GFC. We are in a different situation with the USD teetering on the brink and central banks loading up with gold. Why anyone would jump out of real money and real money miners into fiat currencies, I have no idea.

GOR Price at posting: $1.39 Sentiment: Buy Disclosure: Held
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0 Great analysis

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