Some interesting trivia on gold stock short positions;
DJS was discussed in a certain daily commentary the other day as expensive with a sell rating. I just noticed it has an 11% short position against it- more than most of the gold stocks which typically sit at 1-3% (KCN has 12%), MML 1.3%, OGC 0.08%. Even PRU was only at 1.7% on 30 Oct (day 2 of 5 straight days of selling following its qtrly). Back to retail, MYR has even more at 14%, HVN has 6% and JBH 7.5%. Seems like the hedge funds believe there is relatively little downside risk left in the gold stocks, or too much risk of upside to justify shorting heavily but they see the retail sector as over valued and likely to significantly correct with less risk of further strong upside. (Before shorting the retailers you have to consider the risk of a short squeeze which might in fact get the retail stocks to have a blow off phase before they peak and correct. I wouldn’t necessarily be betting on that but it is a risk.)
Funny how large the short positions are on the retailers and how small on the gold stocks yet sentiment for gold stocks seems extreme still while I hear very little negative sentiment towards the retailers. Wonder how it will all work out over the next 6-12 months.
ABU Price at posting:
2.5¢ Sentiment: Buy Disclosure: Held
