Thank you for the '40 questions for any long term precious metals investor' article. Does anyone have an answer or views on Question 25: Why should investors not buy gold or silver shares? I would appreciate any thoughts on this as I think most precious metals owners also have equities. Thanks for your input.
At this point there is only one reason I can think of. As you know Eric Sprott, who is smart as they get, is looking for 30 baggers. I am with Eric. His track record in the end is as good as it gets. That one reason: if there is a general market collapse all shares will be hit in the short term in a liquidity panic. But, should that occur, gold and silver should really explode not long after, and take the shares with them. Bill
The answer depends on which school of thought you subscribe to. Jim Sinclair advises to get out of the system before financial collapse, and in that case share certificates wouldn't be of much use. In Canada where a handful of big banks dominate the markets there would be no trading. Also many gold companies are little more than cash cows for insiders. For example, Eldorado Gold remunerates the CEO $18m, and the President $6m per year while retail investors wait for their 5 cent dividends. The good news is that August is the best month in years for my humble PM share portfolio.
Reechar
08-25-2013 @ 8:47 AM