Eldorado Gold (ELD-T)

Sell Telus and buy Eldorado Gold? They're totally different companies, different stories. Can't compare them. Eldorado's valuation is extended, so he'd look elsewhere. Stick with telecoms, which pay decent income and offer decent growth. People are using more bandwidth. Infrastructure and telcom stocks have been overlooked as investors have chased the tech high-flyers.

Not shorting any gold right now. Stock's run well ahead of the group, so he's not as enamoured with this name. He'd look at B2Gold. For domestic, he'd take Detour Gold. Gold is the default winner in the face of US debt putting pressure on the dollar, and will probably be higher in 6 months.

He just raised his target from $1.40 to $1.45. He likes plays with good reserves in the ground and generating cash flow. If you own it, hold it, don't sell it. This sector has taken a beating. Consider averaging down, because there will be a rebound in precious metals. Be patient with the metals.

This company has had a lot of trouble for several years. His preferred way to own gold is through a royalty holding such as Franco-Nevada, where you are insulated from government nationalization or granting reviews.

Replace this with Silvercorp? He'd keep Eldorado. If he's down 50% on a stock, he'd sell it for a tax loss, wait 30 days, then decide with a clear mind. This company has made some horrible capital allocation decisions. It's so beaten down and heated that he's actually attracted to it. But he wants to see their next capital allocation decision before buying.

They have had a lot of problems, especially in Greece, where negotiations have been very difficult and will continue to be. Golds have not moved up a lot over the past few years. They often go up before PDAC (Prospectors & Developers Association of Canada Conference, http://www.pdac.ca/convention) and go down after it. So if you are planning to sell Eldorado, this might be the right time.

Likes golds, but Eldorado's ROIC negative and still lags compared to everyone else in this space. There should be positive returns at this point in the cycle.

Gold is not cheap enough to be a contrarian play. There are some gold companies that he likes. With this one, you get into the political scene in Greece. They’ve had all kinds of difficulties, and continue to do so.