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Gold bugs surprisingly patient


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#1 The_Gold_Miner

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Posted 14 November 2003 - 09:00 AM

Gold bugs surprisingly patient

By Mark Hulbert, CBS.MarketWatch.com
Last Update: 1:46 AM ET Nov. 14, 2003


ANNANDALE, Va. (CBS.MW) -- Is that patience I'm detecting among some gold-oriented newsletter editors?

HULBERT FINANCIAL DIGEST
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That is not a quality normally associated with them.

At least during the 24 years I've been tracking investment newsletters, outsiders were more likely to describe them as rabid, fanatical or obsessed.

In the early 1980s, Harry Schultz, editor of the Harry Schultz Letter, announced that if gold were a woman, he'd marry her.

So you can understand why it is so striking that many of the newsletters that regularly focus on gold are restrained right now.

After all, if there were to be a time when the gold bugs deserved to be downright exuberant, now would be it. Gold earlier this week rose to its highest level since March 1996, and seems poised to break the $400 barrier.

But exuberant many of them are not.

Consider the advice given by Curtis Hesler in his Wednesday-night update to subscribers of his newsletter, the Professional Timing Service: "Be patient, not greedy. If you need something to do, count how much money you are making rather than what you could be making if you 'woulda' bought the lows with more money."

Or take the comment that Mary Anne and Pamela Aden made Thursday night in the latest issue of their newsletter, the Aden Forecast: "Things are a bit overdone, and it's time for gold to cool down for a while."

In fact, the Hulbert Gold Newsletter Sentiment Index (HGNSI) is well below its record high, despite gold trading at levels not seen in years. This index measures the average percentage exposure to the gold market among a subset of gold timing newsletters.

As of Thursday night, the HGNSI stood at 54.2 percent. Not only is this well below its record high of 89.6 percent, it is even below the 62.5 percent level at which it stood as recently as Nov. 7, when an ounce of gold bullion was trading for some $15 less than it is today.

According to contrarians, this is not the sort of behavior we would be seeing if gold were at or near a major market top. To them, this is an encouraging sign, suggesting that any pullbacks will be relatively minor and should be viewed as nothing more than bull market corrections.

For the contrarians among you, therefore, I queried the Hulbert Financial Digest database to determine which gold stocks are currently most recommended by the investment newsletters the HFD monitors. It presumably is a positive sign that these stocks remain popular despite the relative cool that many newsletters have towards precious metals in general.

A dozen gold stocks (SIC code 1040) are currently recommended by three or more HFD-monitored newsletters.

The number of newsletters recommending each stock in the following list appears in parentheses.

Here they are, in order of their popularity.

Newmont Mining (NEM: news, chart, profile) (12)

Gold Fields (GFI: news, chart, profile) (6)

Anglogold Ltd (AU: news, chart, profile) (5)

Agnico-Eagle (AEM: news, chart, profile) (3)

Barrick Gold (ABX: news, chart, profile) (3)

Compania de Minas (BVN: news, chart, profile) (3)

Durban Roodeport Deep (DROOY: news, chart, profile) (3)

Glamis Gold (GLG: news, chart, profile) (3)

Goldcorp (GG: news, chart, profile) (3)

Harmony Gold (HMY: news, chart, profile) (3)

Meridian Gold (MDG: news, chart, profile) (3)

Placer Dome (PDG: news, chart, profile) (3)

Editor's note: The most recent edition of the Hulbert Financial Digest is now available by either e-mail or regular mail. Highlights this month include:

Top newsletters are still bullish. But how does this compare to other periods?
Long-term stock and mutual fund newsletter performance rankings through the end of September
Profiles of Almanac Investor, Investors Guide to Closed-End Funds, Gerald Appel's Systems & Forecasts and The Oberweis Report
For more information or to subscribe to the Hulbert Financial Digest, click here.

Mark Hulbert is the founder of Hulbert Financial Digest in Annandale, Va. He has been tracking the advice of more than 160 financial newsletters since 1980.








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#2 uncleharley

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Posted 14 November 2003 - 04:23 PM

Perhaps we won't have a correction for a while. :rolleyes:

#3 The_Gold_Miner

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Posted 14 November 2003 - 04:32 PM

Today looked pretty good in my book. Also today's activity may have changed the wave count as well. I will post a chart later tonight or this weekend.