up or down today?, page-40

exfiles

"at the foot of loki's wall of golden worry"

lol

At present I am not worried because I sold out of almost all my positions last Monday at the start of the day, and had been less than 20% invested. I only hold a few RED and GTE shares. I still took a hit, which I did not like, but it seemed to be a case of safety first.

My worry, if one can call it that, is deciding when to buy back into the goldies and which ones.

I believe the Safehaven article was correct in saying there were very high total cost operators at around $USD1600, but there are still many around well under that figure and some that can produce profitably at under USD1000, although very few in OZ. I think RRL is such a company.

There is basically no respite for the goldies in the near term, even if the POG steadies. The fundies simply must sell shares to meet investors demands for their money to be returned. If the POG falls further, say to USD1200, then the spiral will have a much further to go. SBM looks even worse than SLR because it has taken up a lot of debt and needs to fund improvements at its 2 Pacific island operations.

The minerals sector is a bit of disaster for those that bought shares in April 2011 and held on. At some point in time costs will stabilise across the industry and the remaining operators will benefit from the new cost structure.

It can be difficult adjusting ones expectations and being patient enough to let the shares come down.

loki