...gold miners underperforming bullion (physical Gold) - is this disconnect attributable to market myopia? Or is there something else that explains the disconnect and the relative underperformance?
...when we are 'married' to the asset class, we want to believe that it is market myopia. Just like lithium Hodlers (in denial about the state of EV/lithium industry) believing market myopia on lithium now, in not recognising the inevitable EV future.
...those who want to believe totally that a prolong disconnect is market myopia must really believe that the market is highly inefficient, blind and stupid. We can see value better than the entire market.
...market myopia cannot possibly stay prolong unless the market is so inefficient to see and sniff a great opportunity. Perhaps market participants are either in denial or fail to understand the possible reasons behind the disconnect.
...at the end of the day, markets determine price and value and value is in the eyes of the beholder, not just us as individuals. You may want to believe the market is wrong and made a poor judgment but the market decides regardless of what you and I think or believe. We may not like BTC and thinks its a scam, crap investment but if the collective view of the new generation of buyers think otherwise, it can thrive and prosper for longer than we want to imagine.
...my view is that the buyers of Gold want the real thing, pure and unencumbered by company specific risks. The rally we've seen in Gold is not driven by speculative stock play but serious accumulation of physical Gold. But gold miners eventually must track the value of Gold, except that speculative sentiment from US isn't in gold stocks. Hence the disconnect.
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Barrick Gold, the world's second largest gold producer, trades at a 28% discount. This is the lowest Barrick has ever been relative to gold. Incredible!
