gold juniors

This guy might be onto something.

He suggests large caps are expensive even after the big drop in Gold.

Something I alluded to in recent posts.

LGL is still on a PE of 22

NCM is also on PE of 22

LGL has a market cap of $5 billion

NCM has a market cap of $11 billion

They are not cheap by any measure.

If I am going to speculate in gold I would rather stocks that could go up 5 fold.Or at least 2 fold.

I can't see NCM at $22 billion or LGL at $10 billion.

anyway read this guys article as it is rather interesting if you like Gold juniors.

Are you frustrated owning junior gold stocks?

Probably yes. Major gold stocks fared much better during the first half of 2008 - until July.

Agnico-Eagle e.g traded at $ 82.80 at the beginning of July and has corrected since down to $ 51, a drop of almost 40%.The PE ratio based on 2009 estimated earnings has fallen from 50 to 30.

A PE ratio of 30 is still a high number but reflects the fact the big institutions have to buy the big caps because of the high trading volume, allowing them to buy or sell large amounts of stock.

Juniors like Alamos Gold held up better during the recent down-turn which can be seen in the chart below (BLUE CIRCLE)

We said in our last report that "This (the over-valuation of the majors) will change in our opinion. The large caps will tire. Money will seek stocks left behind and the juniors will experience a spectacular revival. It would be a sad mistake, on our mind, to switch now from juniors to mid and large cap stocks at this stage."

http://www.safehaven.com/article-11031.htm