the ridiculous prophecies, page-72

Yes Furniture. If the commercials have it right medium term as they usually do, then POG may be heading higher soon. If AUD continues lower into the 80-90c range as it seems destined to do, the POG in AUD could easily approach last year’s levels. If US gold approaches its highs, AUD gold will be breaking records. Yes I know it seems unlikely right now but I bet not too many expected $1900 gold 10 years ago either. When it was rising from $260 to $400, most of us were wondering/debating if it could even get close to the 1980 $800 peak. Not many expected that to be surpassed by so much but not many of us expected such a huge increase in the monetary base either. I also bet very few expected such a massive rebound in markets during the depths of the GFC. Seemingly unlikely things can happen when the majority expect the opposite.
SLR has strong leverage to any rising POG not just because of the margin expansion but also because of the production upside. They can easily expand gold production back up to last years targets on an increased POG. So while many can’t imagine the sp getting back up to $4, a higher POG will have a very strong effect on the sp.
Up to now we have seen the reverse and most thought the sp was falling too far relative to POG falls. Lower margins and lowered production targets thanks to lower POG have decimated the sp because of that leverage.
The reverse will apply on a rising POG and if that happens the gains should be spectacular.
A risk managed approach is a good option if you are only 50:50 on POG direction. If you invest what you could afford to loose (a small part of your net worth), then say you invest $5,000, your worst case is you loose $5,000. It seems to me very unlikely from these levels you will loose the lot. Management is experienced enough and acted early in response to the drop in gold to ensure profitability. They do have a large proportion of high grade ore within the total reserve base to cover them for years of low POG if necessary. If instead the COT chart is again a reliable indicator that POG will reverse to the upside before long, then your $5,000 may indeed turn into $25,000-$30,000 or more. Risk losing $5,000 (at worst case) to potentially make $20,000 or more. Sure it's only worth taking the position if you believe gold is not going much lower but those of us that see higher POG long term have a very attractive long term proposition if we want to take.
Yes the chart looks weak still but when do you buy? We saw many gold stocks rally 50% recently yet that was not a reliable indicator that they were to continue higher.
Where will they be before its obvious the rally is real? If we wait for an obvious trend, I think they may be up by 100% or more.
A chartist will prefer that option but it’s not for everyone. If it was we wouldn’t have any buyers while prices drop or sellers while prices rise. Clearly much of the market buys on fundamentals rather than purely on charts. I have been out of this one for most of the downside because of the chart but I am keen to make sure I am in early enough when this does turn because of the upside I expect. That does mean multiple entries and exits sometimes at loss and sometimes at profit, but I’d rather not wait till this is $1.50-$2 before the chart tells me it’s in a new long term uptrend and I can buy. Even if I took that option, there is no guarantee that I haven't bought at a top so there is always risk.
Each to their own with timing and strategy.