That's certainly an ok theory, but it doesn't seem to hold water. You've got issues such as GSS, IAG, MFN, MRB and GBN to name some mid/smaller caps that are fairly liquid (except maybe MRB) and trading at deep discounts to their big cap peers. None of them should require much cash, if any going foward w/the expection of MRB, but given their agreement they won't need much and they have cash flow to back up any loan.
I only see 2 legit explanations and I'm not crazy about either:
1) We are very close to a major IT top where breadth has become worse and worse
2) Risk adversity has become so high that money doesn't want to speculate in anything, but the most liquid issues.
I don't really like theory #2 since it doesn't account for the smaller investor. As a group they were enough to push the juniors higher in 2003. The volume is simply not there in many issues.
I have a hard time believing #1 given the FA environment, but it's possible deflation is hitting faster than I think. If these stocks are truly as cheap as I think they are there should be some buyouts here.
It's bizarre either way. Maybe it'll make more sense in a few months looking back. I do remember energy investors going through the same thing the first time oil went thru 40 and onto 60. During the subsequent pullback the oil shares were bought hard. We haven't had any real shakeout in gold yet. PMs - all too often. Dunno...
I continue to believe from a sentiment standpoint gold is trading about 2-3 years behind energy. As such the big breakout (to all time highs, we're there but it's not spectacular yet (say $42 oil equiv) is just now happening. In the next year we should start to get a much broader group of investors/funds/interest which should drive prices quite a bit higher. Last of the easy money potentially.
