IAG- I like this one matt, strong fundamentals and the chart is setting up nicely. It's always wise to look for the companies with the strongest fundamentals that could survive the storm in any beaten down market because chances are some will not survive. You remember a couple years ago how ridiculously beaten down most solar stocks were? Nobody wanted to touch them, regardless of how grossly oversold and undervalued they had become. Many of them did not survive the storm back then, only the ones that had the strongest fundamentals managed to survive and look how they ended up performing coming off beaten down undervalued levels. I can think of at least 5 solar stocks I was following that became 10 baggers from their lows within about a year. I think we are seeing a similar beat down with gold miners in recent years and believe that now is the time to be moving some equity into this undervalued market.
Any time the XAU/gold ratio reached 0.20 or below, gold stocks were undervalued in relation to gold, and investors who bought at those inflection points made a profit. Conversely, once the ratio reached 0.34 or above, stocks were overvalued and due for a pullback.
For 23 years, from its inception through 2007, the XAU/gold ratio provided fairly reliable feedback for investors.
Now let's add the rest of the data.
Today, the XAU/gold ratio is at a historic low of 0.07.
To fully appreciate what this means, look at these former lows for comparison:
It's lower than the 2008 gold stock selloff; It's lower than the "nuclear winter" of the mid-'90s; It's lower than the very beginning of the gold bull market in 2001.
Right now, gold stocks are like a rubber band that's being stretched to an extreme. As all rubber bands do, it will snap back. And not just that; based on how extreme the undervaluation has become, they're bound to be among the most profitable investments of this generation.
Huge upside potential if Gold continues moving higher...JMHO
(Gold/mining stocks I like)
AUY - Yamana Gold Inc. IAG - IAMGOLD Corp. EGO - Eldorado Gold Corp. RGLD - Royal Gold, Inc. KGC - Kinross Gold Corp. NGD - New Gold Inc. ANV - Allied Nevada Gold Corp. GSS - Golden Star Resources Ltd. HMY - Harmony Gold Mining Company Ltd. AU - Anglogold Ashanti Ltd. NEM - Newmont Mining Corp. ABX - Barrick Gold Corp. BVN - Compania de Minas Buenaventura GFI - Gold Fields Ltd. GOLD - Randgold Resources Ltd. AEM - Agnico-Eagle Mines Ltd. GG - Goldcorp Inc.
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