Barrick Mining (ABX.TO)

He has had zero gold weighting since March 2012 and intends to have zero weighting for the foreseeable future. No question that gold stocks look attractive but he can’t value gold.

Not looking good. Has been a huge amount of downside pressure on golds and gold stocks in the last little while. Also, gold stocks are underperforming gold itself. This one has just broken below a key support level. Seasonal strength is from July to September each year.

You won’t go bust but it is very difficult for the majors to go upward. It is better to speculate in smaller ones.

(Market Call Minute) Great price if you are bullish on gold. Give it a couple of months to perform.

(A Top Pick Feb 21/12. Down 31.15%.) Selling at relative modest multiples. Modest yield of 2.46%. Good production profile going forward in terms of increased production. Earning very good margins on production right now. Expects it to go up significantly in the next year or two.

Have a big project that is going to go well over budget but thinks they are getting a little bit more logical about profitability going forward. Yield of 2.52%. Very cheap.

It depends on the direction in gold price. Looks cheap. They, like most of the others, are having cost creep problems. He buys the ones with good production growth. Prefers Argonaut.

Just announced their copper operation in Zambia was going to be more costly than expected. Has been an extremely disappointing stock. Feels the new CEO will employ a much more disciplined approach on capital efficiencies and capital deployment. Current valuation is very low at 5X cash flow. Great value, but a bit of a “show me” story.

Everybody should have some gold in their portfolios but he has been very disappointed in gold mining companies. Has moved to bullion funds rather than companies. Part of the problem for companies is that costs have gone up fairly significantly. Dividends are there but are pretty small. He is continuing to hold his positions but not adding to them. (See Top Picks.)

With all of the quantitative easing kicking around, (Japan, US, Europe and the UK), you have to believe that major global currencies are not going to get any better. Trading at 1.25X Book is as cheap as it has been in the past 30 years. Dividend yield of 2.38%. Wouldn’t be surprised if it got 15%-20% higher from here.

Gold is more of a trading stock but it is not working here. This could be a good time to buy ABX as it is underperforming. But he does not see any reason to own gold here. But if he held it he would not sell and would hold on. There no reason to get out here.

Probably has had some influence by the recent downdraft in gold. Has been able to find some support in the $33 area. For the time being, the trend is down. Looks like in the very short term there might be room for a little bit of a pop.

(Top Pick Jan 6/12, Down 28.97%) It was a sector-related sell off. He would own it today.

Prefers being in the mid-name in gold, where you can see some growth in production. People have access to gold in so many different ways that they really don’t have to buy a company. Cost structure has gone up a lot on these companies, which has really hurt them. From a technical point of view, gold can go lower. An ETF makes a lot more sense.

Barrick (ABX-T) or Goldcorp (G-T)? Feels that Goldcorp is going to show tremendous production growth over the next 3-5 years. Barrick is struggling with a few problems including their copper project and some South American projects.