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Why Gold Stocks Suck

Why Gold Stocks Suck

2012-05-03


“Gold stocks suck,” said fellow newsletter writer Eric Coffin in a presentation at the recent Cambridge House Investment Conference in Calgary. I could not agree more.

Let’s review the fundamentals to understand why his words ring true.

Most micro-cap resource stocks were immersed and have stayed underwater since a sector-wide high in early March 2011. The Toronto Venture Exchange Index, which serves as a good proxy, is down 43% from that period of time. Weakness in the resource sector has occurred despite record or near-record prices for most commodities in 2011 and continuing high prices into the second quarter of 2012.

Reasons for the decline in junior exploration and mining stocks are many:......





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