Replies to post #59313 on Pacific Gold Corp fka PCFG

[WhiteSahara]

So, you're implying that the entire gold producing sector, Barrick and Newmont included are weak companies so traders aren't buying them. Pray tell, could you provide the weaknesses of these two companies that are keeping the traders away?

Thanks for the laugh, you're really reaching here.

Typically, the leverage of the PE ratio pushes solid sector companies prices up at a higher percentage than merely holding the commodity. At even five times Price to Earnings you get a bigger bump than merely holding the commodity.

For a guy that claims he has no interest in "Penny Stocks" You sure spend a lot of time with passive aggressive stabs at a firm you know nothing about.

Here's an article that contradicts pretty much everything you state in your post. It is laced with facts, comparisons, research, percentages, dates and reality. You really ought to read it:

The Daily Profit Blog
Stock market news and commentary from Wyatt Investment Research

Gold Companies Lagging Gold - Big Time

Kevin McElroy | Resource Prospector | July 13, 2011 11:45am EDT

If you've been following the gold markets, you know that something strange has happened over the past year or so.

In short, gold prices rose from about $1,200 an ounce this time last year, to a new record high price of $1,579 as I type.

That's a 31.6% gain.

This large gain is not the strange part of the story. We know that gold is likely to rise in price in world currencies as long as central banks and world governments continue to print money in order to service decades of deficit spending.

And since there's no practical limits on that spending or the fiat currency needed to finance that spending, that means that there's no practical limit on how high gold prices can rise.

Before I get into the strange part of the story - I'd like to briefly explain why gold is such a good measuring stick for currencies.

The amount of above-ground gold stays relatively static. It grows at about the same rate as the world's population. So 100 years ago, there was about the same amount of above ground gold per person as there is today.

Also, unlike silver, copper, and many other precious and base metals, very little gold is consumed by industry. So almost every ounce that's ever been mined is sitting in a vault, in a safety deposit box, in a jewelry box or otherwise in readily available form.

And though investment demand has begun to spike over the last few years, overall demand is still relatively flat. Here's a chart showing world demand for gold over the last few years:



Demand stayed about the same regardless of whether gold was $700 an ounce or $1400 an ounce.

So, with gold demand relatively flat, gold supply relatively unchanged and very little supply destruction - gold is one of the rare assets that accurately counterbalances currency price action.

Every new $1 bill printed means that the world's pile of gold has to necessarily be worth about $1 more.

You don't have to take my word for it. We've seen the money supply vastly outpace the supply and production of gold. That's why gold's price is rising.

So here's the strange part: while gold jumped 31.6% in the last year, gold stocks have lagged, big-time.

Here's a chart of gold's price over the past year plotted against a gold major ETF, the Market Vectors Gold Miners (NYSE: GDX):



Normally, you might expect major gold producers to at least keep pace made in the price of gold. It's not out of the question for gold majors to double or triple gains made in gold.

But right now, gold majors are lagging behind. And for no good reason.

Today, I think you could do much worse than to pick up shares of GDX. As long as this fund lags gold, you should be buying.

There have been very few times when this fund lags gold over the past 12 years, and all of them were great entry points.

Had you bought GDX at the end of 2000, when it was lagging gold you'd be sitting on 725% gains right now - nearly double the gains in gold alone.

Another great time to buy GDX was at the end of 2008, when it fell below gold's performance for several months. GDX is up 240% since then, while gold is only up 110%.

If you buy today, I think you'll come close to 2-3 times outperformance over gold in the next few years. That could mean a total gain of 500% or more, easily.

I hope you'll take notice of this trend, and not wait until GDX and the gold majors to make huge moves.
permalink | tags: commodities, etf, gold, silver, copper, metals, GDX, Market-Vectors-Gold-Miners, NYSE:GDX

http://www.wyattresearch.com/article/gold-companies-lagging-gold-big-time/23523

[lazyeye]

I agree. The price of gold has nothing to do with a Toronto gold company with a $45 million market cap, a little over a mil in assets and is $26 million in the hole.

However, if the gold "hype" here is good enough, it's an easy double or triple.

[therat]

I agree with you right now about gold having more value than mining companies at present. That's been obvious, but that doesn't mean it will remain that way. I think there is much more earning potential with a company just starting production, than buying an ounce of gold, though. The ounce of gold is just safer. Just my opinion, I enjoy your posts lowtrade and I think you add to the board. I think you just pi$$$ed a lot of folks off when we got the pr we had been waiting 1 - 4 years for (depending on how long someone is here) and you were short term bearish. It was just bad timing. I read your post on your board that you think PCFG could be .10 by end of august. Maybe you could expand on that for folks here! LOL