Potential Value in the Worst Performing Industry Over the TTM

This partial post was prepared yesterday but time prevented me from posting. So I will post what I have as there may be value for some readers. I will try and finish tomorrow.

The Gold industry is down -49.45% for the current one year period. If we look at the 3rd worst performing industry over the same current one year period we must look at the coal industry. The coal industry posted a drop of -16.96%.So clearly Gold stocks have been decimated. The Gold industry recorded the following returns, YTD = -42.86%, 1 month =- 4.61, 3 month = -10.15, 1 Year = -49.45%, 3 Year = -19.98, 5 Year -3.20%. (as of yesterday).

This has serious mean reversion potential. It’s also doesn’t hurt to have super star contrarian investor Jim Grant in your corner. Jim Grant recently said: "I think Gold Mining shares which are universally despised represent a call on the surviving monetary asset and is one area of absolute compelling value."

So now I will do my best to introduce some IMPERFECT Gold stocks that may significantly outperform the markets.

Too prevent a mistake from quickly and lightly analyzing I will only list Gold Stocks that had positive 2013 insider buying. Share count stabilization or reduction from 2011 to current count was also a requirement.

1 comment:

Unknown said...

Great idea. One tactic is to write calls/buy puts/short DUST, which may also mean revert and also suffers under the constant leverage trap which degrades its value over time. Ultimately, I believe that DUST is worth $0.