Wall Street Oasis - Investment Banking & Finance Community: Gold Miners - Value Traps in Waiting?

Wall Street Oasis - Investment Banking & Finance Community The Wall Street Finance Community where investment bankers, consultants, traders, private equity and hedge fund professionals come to learn and play.

Gold Miners - Value Traps in Waiting? May 1st 2013, 03:00 When searching for investment ideas, one thing that seems to work is the search for the weak hand. Relatively uninformed investors, or simply those who are making non-economic and indeed incorrect assumptions are often a good starting point to research the other side. With that mind, the fact that the U.S. Mint has run out of small gold bullion coins to sell is particularly interesting. This is a mini gold craze which parallels the institutional interest but is unique because: The small denomination implies mostly retail interest, e.g. those who don't have that much money to begin with. They are therefore forced to buy the small denomination. The illiquid/indirect nature of the buying. One can buy GLD etf to get the same exposure with much higher liquidity. Given the world avoids anarchy (and even then), no one is forced to accept gold as payment and therefore is by definition fear-based buying. read more Media files: preview (image/jpeg, 0 MB)

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