October 27, 2008 was the gold mining sector’s Black Monday, the day nearly every stock hit rock bottom. Hindsight makes it plain they got caught in the violent deleveraging that sucked down every equities market in the world.

The broader markets were of course making year-to-date lows at the same time, and unlike gold stocks, they continued falling after a short intermission. In fact, the Dow fell 2,000 points after Obama was elected. In sharp contrast, the mining stocks went on a tear. Between November ’08 and January ’09, many of our BIG GOLD picks made substantial gains, rising anywhere from 45% to 149%.

This good news isn’t the whole story, of course; many mining stocks saw percentage losses greater than the broader market averages during the Big Selloff. But given the fact that gold stocks started rebounding while the broader markets continued lower, the BIG GOLD portfolio ended the

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Trading without indicators is like running blind and it encourages emotional trading that is the bane of successful investors. Below are brief descriptions of 5 of the most popular gold mining company indices and how they should be used in conjunction with the price of gold to determine the future movement of gold bullion and gold mining stocks. (For a much more indepth understanding and analysis of these indices please refer to my recent article entitled “Gold Indexes: Comparing and Evaluating the HUI, XAU, GDX, XGD and CDNX”.)
The HUI Index
The AMEX Gold BUGS (Basket of Unhedged Gold Stocks) Index (HUI) is a modified equal dollar weighted index of 15 large cap (80%) and medium cap (19.5%) gold mining companies that do not hedge their gold beyond 1.5 years. The 3 largest companies make up approx. 37%* of the index by weight with the remaining 12 companies, at 4-6% each, making …

Market analysts, investment newsletter writers and financial planners are always commenting on how well, or poorly, the precious metals (read gold) mining sector is doing based on how a particular gold/silver mining index is trending but they are not telling you the whole story.

Why not? Because there are more than 40 precious metals mining indexes (indices) that dice and slice the components of the precious metals mining sector to arrive at a wide variety of insights and using any one of them as a basis on which to comment on the performance of the precious metals mining sector does not accurately reflect the true picture of the sector. Making investment decisions without first knowing how each index is structured; the eligibility criteria; the number of companies included; the specific market capitalization of the components; and the degree of concentration and average market capitalization of each index may lead to imprudent …

Let me start off with a morsel of clarification. I don’t hate gold. I own it, or more accurately, an interest in gold via gold mining shares.

And I believe a small allocation (5% to 7%) has a useful place in a well-diversified portfolio. Over the long haul, studies confirm it helps increase returns while minimizing risk. A benefit we can all agree is desirable.

But over the short-to-intermediate term - the next six to nine months - I think gold is a terrible investment. After breaching the $1,000 per ounce mark again, as I suggested would happen to my subscribers on February 2, it is overdue for a retracement back to roughly $700 per ounce.

Those of you who expected it to drop the day after I suggested shorting gold need to understand that “short term” doesn’t mean “this week.” Just because it moved higher doesn’t negate the point

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Shorting Gold: 8 More Signs Gold is Overdue for a Correction

by Louis Basenese, Advisory Panelist Senior Analyst, The Oxford Club

Two weeks ago I told you it was time to start shorting gold. And the recommendation, as I expected, ignited a brew-ha-ha on our Investment U message board.

That’s because there’s not much middle ground. Most investors are either fanatical or supremely skeptical. If you have any doubt, check out the comments - and all the wonderful names I got called - on our website.

But since I’m a glutton for punishment, and since gold moved in exactly the opposite direction I predicted, it’s time for an update and a little clarification.

A Morsel of Clarification on Shorting Gold

Let me start off with a morsel of clarification. I don’t hate gold. I own it, or more accurately, an interest in gold via gold mining shares. And I believe a

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Byron King finds himself inspired by a recent Patton-style ‘motivational’ speech for gold. This from Whiskey & Gunpowder:

Do you remember the 1970 Academy Award-winning movie Patton, starring George C. Scott? In the beginning of the movie, Scott — playing the iconic American Gen. George S. Patton — stands in full dress uniform, backed up by a gigantic American flag. Scott then rouses the troops (and the audience) with a stirring speech that follows the lines of the address the real Patton gave the Third Army on June 5, 1944, the eve of the invasion of France in World War II.

Patton’s original speech is considered by many to be one of the great motivational talks in all of military history. And actor Scott’s portrayal of Patton delivering the speech is one of the most memorable scenes in all cinema.

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Crashing Stocks Are Creating Fortunes

If you think

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Quite frankly — anyone who doesn't own gold in this environment has lost their marbles. Consider the following ... — The U.S. economy is experiencing its worst financial crisis since the Great Depression. Fannie Mae and Freddie Mac have failed — the largest financial failures ever seen in this country. And the U.S. Treasury has guaranteed their $5.2 trillion of debt. Lehman Brothers has failed. Merrill Lynch has had to be sold off to help stop its bleeding. The airline industry is broke. The big three auto manufacturers are all but officially bankrupt. And more woes are certainly coming. Lehman Brothers goes belly up!...