re: lsg/kcn/oxr - for acturtle jebigacre.lets make this clear,...

re: lsg/kcn/oxr - for acturtle jebigacre.

lets make this clear, this thread is about gold stock share performance. it is not about which stock has the best fundamentals. if anyone has traded the market for any length of time they will know that over a 12 month period, the influences that affect share price go far beyond competitive advantage and fundamentals.

what affects share price? It is future earnings and the risk that is associated with them.

in essence the reason why I believe RBK and HIG will have an equal if not better chance of outperfoming the three stocks you have mentioned is that they are both in the project development stage. they both have bankable feasibilities near completion and both appear to have bank finance pretty much wrapped up. therefore construction should not be far off and production is likely to occur somewhere near 12 months away

both of these stocks will change from currently having no earnings to full production earnings.

their RISK PROFILE will change from high/moderate risk now to low risk over the next 12 month period. in this situation the market rerates the stock by giving greater credence to future earnings. this is the turbo factor to which I refer. this is the turbo factor that has recently driven OXR as well as KCN before it.

I believe KCN does not have much upside left to offer as its earnings profile has pretty much been established.

OXR has the copper project but they have to find US$100 million finance first and copper production could be up to 18 months to 2 years away. they have just burnt their first turbo jet and the next one will fire a bit of the way down the track in my view.

LSG - well, as said, this one is in a different category and could simply do anything on the upside with heaps of scope through its different projects.

In general terms RBK & HIG are developers and OXR & KCN are producers.

Take at look at a few gold stock charts and see what happens when companies with no current production develop their first mine. The turbo charged price action when gold production starts is very evident.

I am talking behaviour of the market. The psychology of the market. Repetitive actions of the market.

I would prefer to invest on that basis than fundamental analysis alone.

However we all have our approaches to investing and I do not begrudge someone else having a different view.
We all have different risk profiles. Are RBK and HIG higher risk right now? Yes they are. But they are also both quality stocks.

The stocks you mentioned will not look out of place in any quality portfolio. They could easily perform better than average. But whether they will outperform all other gold stocks is another question. In my view it is actually highly unlikely given that the market has a habit of proving us wrong when it starts to look predictable.


acturtle