Disappointment with the performance of miners. What gives?

One step forward, two steps back, dancing the miners waltz. As texpat pointed out, there are reasons galore for why prices are heading south. Its been in the wind for some time now that the share market is bound for a trip to the basement, so this red red green, red red green pattern doesn't really come as a surprise. What does surprise me however is how this time, as compared to the Fukushima drop, I am much more prepared to hold than to sell.

I remind myself of the reasons why I bought those shares in the first place, how the medium to long term fundamentals for PM's and commodities in general have not changed to the extend that the resources those companies are sitting on won't be worth a fortune at some time in the not too distant future.

Even though my cookie jar is only 15% in cash, and I will in all likelihood miss many great buying opps to come on this downward spin, especially should the bottom really fall out and the Dow (or ASX in my case) crash 20% from where we are today, I still believe (turning to hope) that most of the companies in my portfolio will bounce back sooner or later to earn me handsome returns. Metals prices would have to collapse dramatically, over an extended period, for those miners to be failed ventures. I don't have a crystal ball in my office like the Turd, but my gut feeling tells me that come New Years eve, the miners will have returned from the basement with a magnum bottle of champus. If not, I have a few cans of cheap beer without them.

On this note, as the ol saying goes, 'no pain, no gain.'

I agree with you JP about the need to return dividends to shareholders. What I find most interesting about JS suggestion was to make a special dividend in the form of a gold coin. You could use a silver coin if you produce silver. His reasoning for this would be to create complications for the shorts. They, in my opinion(IMO), would simply look for another easier play. Also the spread, long metals/ short miners, would be corrupted.

Many of the large producers are capable of this form of dividend payment. I am not sure how this would play out on a tax basis though.

When/if that happens (large $ dividends, or dividends in AU/AG) this sector will go ballistic. The South Africans in the last bull are an example of this.  Man I would love to take metals in place of $; that is the ultimate "middle finger" to the system :)

I managed to get in and out of SLW with a profit earlier in the year. But I noticed it ticked absolutely in time with indices which leads me to believe the HFT bots bitch slap it. Once the end of QE2 starts the SPX sell-off we should see some really attractive entry points.  OR, if you just want leverage to AG then AGQ is the beast to buy.

Physical metal is a safe haven.   Texpat all your reasons are right on.  I would add one more-Risk Aversion.

Miners along with stocks are viewed as risk assets.  Gold and silver are holding up well because they are safe haven assets esp. Gold.

Miners have counter party risk gold does not. Miners have geographical risk, input cost risk, labor risk etc. etc.

So  miners seem to follow the market and all the players amplify that for all the reasons Texpat stated above.  I have a big postion and I'm not selling now that opportunity has passed.   come fall expect many of these miners to take off so don't get shaken out.

I'm very new to all this but would like to ask what may be a stupid question. Is Barrick (ABX) considered a "miner"  by definition on this forum? Also, is this a stock that would be a wise "buy and hold" for the inevitable time when the "fiat hits the fan"? Right now I'm simply stacking physical silver but would like to dabble a little in some gold.

I think it's a really bad idea. The time erosion factor of the options can rob you of your entire "investment" even if the base asset (GDXJ in your case) actually goes up. I tried the same thing with GDX calls once and finished almost with a wipe-out even though  GDX was up by almost a double for the same time period!

To me it seems as if miners still respond stronger when gold goes down compared to when it goes up :(. Hope we will see this situation reversed soon, i.e. the miners outperforming gold.

Yep, the miners have been beaten down recently.  I bought the gold juniors ETF (ZJG.TO) on the decisive $1444 break.  Today we sit at gold $1500 and the ETF is officially down 17%.  All pain and no gain.  It became a hold and wait for the break later this year.  It has treated me well in the past and this time it has just become frustration.

I also agree about the dividends, although it is tough for small producers.  However, the big boys like Barrick, Kinross and Yamana have also seen horrible selling so it is not just symptomatic of the juniors.  Even the major silver producers with stupidly low 'production' costs are down drastically (SLW, SVM).

The last time I saw an opportunity like the one currently being offered was in the late fall of 2008.  I just shook my head and plowed into the deals - you could not lose.  If you don't jump on the cheap current valuations, you are really going to miss out on the run.  Someone is buying these cheap shares and they are going to make a killing.  If you are selling here, I pity you.