Barrick Mining (ABX.TO)

Gold has been going through an important technical indicator. Broke through the 200 day moving average recently. Cheap. Likely to sell their 74% interest in African Barrick and continue to sell and high-grade some of their Australian assets that are high cost and low mine life. Generalist investors and mutual funds will have to own this and will want to buy it.

Doesn’t own this because 1) it is not a pure gold stock and 2) part of their operation is in areas of Africa that are unstable. Made a big copper acquisition a couple of years ago, which was a big mistake.

Market is expecting further stimulus to come through. Came out with a pretty tough Q2. A lot of these stocks are looking at focusing on return on investment, earnings per share growth, share growth. They highlighted this on their conference call. Continue to like it.

Gold stocks have not been very much in favour despite the run-up in gold. Gold has pretty much flat lined for the last year and he doesn’t see much reason for that dynamic to change dramatically over the next little while.

If the Chinese took some of their African assets, it would be positive. He doesn’t like this company because he finds it so big that it is very difficult for them to get growth.

Loves to trade gold stocks as a seasonal trade, going in and out of them, especially this one which is a classic example. If you bought this and held it for a long time, you are not a happy camper. The key is to play the seasonal trade. This company recently had some internal changes so the 2^nd quarter report basically had everything bad thrown into it. Now that all the bad is gone, look for some good. On a seasonal basis, it has been a good stock to buy late in July for a move right through until the end of September. This is now happening again. The 1^st target is getting back to its breakdown point at about $38. If there is a real good move on gold, this could reach around $42 but he is not looking for this kind of a move.

He is not a big gold bug. It is a view by the market on how the market feels about paper money and has an inflation fear built in. He would take the gold ETF “GLD” instead. Given the run that gold has had you need caution.

Avoid a gold producer at all costs. They can’t keep a CEO at all costs. It is a tough business.

So beaten up and they are the largest gold producer in the world. They fired their CEO caused price to go down as well as difficulties in two minutes. Will stay in the penalty box for some time but will grow with the price of gold.

(Market Call Minute.) Prefers others. (See Top Picks.)

Currently owns zero gold stocks. The frequency of management changes does not give tremendous confidence to the shareholders. They're real merit for having gold is as a portfolio diversifier. It's not a fundamental asset in that it doesn't produce cash flows.

(Top Pick July 8/11, Down 23.95%) Model $62, upside of 82%. It wants to bottom. Wait until the end of the year to see the balance sheet impact is of the Equinox Acquisition.

(Market Call Minute.) Commodity prices are impossible to figure out. He sold his stock.