To:paul ross who wrote (82) From: John Barendrecht Saturday, Jun 14, 1997 12:50 AM Respond to of 79861
A voice in the dark: I'll paste some of this as the story changes day by day - not everything, read the rest at: http://www.geocities.com/WallStreet/4915/index.html To my enormous surprise, the virtually unanimous negativity of brokers' opinions of gold mining shares was interrupted by a single loud voice in the wilderness. Lehman Brothers released a report this morning from Steve Shobin stating that "risk appears so minimal as to want at least modest exposure in this group. First, the golds are extraordinarily oversold. Yes, items can get compressed and stay that way for a long time. But an oversold condition can be an important prop for the weary, witness the minimal risk for the golds as they languished in oversold territory from mid 1991 to mid 1992. [They doubled in 1993.] Next, the BRE-X debacle is the type of watershed event which often occurs near major bottoms for related groups. A third plus is the proximity to long term support for the S&P Gold group. Fourth, On Balance Volume for gold futures and gold stocks has begun to improve. All of these suggest minimal risk. Gold stocks often bottom before gold futures, though the latter have to rally sharply for the stocks to have major advances. But minimal risk is nothing to sneeze at." [I couldn't have said it better myself.]
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