A Miner Case of Depression

267
Wed, Jan 9, 2013 - 1:23pm

Avert your eyes, if necessary. This is not for the faint of heart.

I figured that today would be a good day to check in on some of our favorite miners again. 2012 was a rough year for many of the companies in the sector and the charts below tell the tale. A couple of items to note:

  • I've used 2-year charts because so much of the fun in the metals began two years ago and 5-year charts contain all the shenanigans of 2008, which simply distorts total returns.
  • Note that, for most equities, a major disconnect occurred at the silver price peak of May 2011.
  • I compared the GLD and the SLV to the S&P.
  • For the miners, though, I compared them to either the GLD or the SLV, in order to gauge performance relative to the actual metal. Not that GLD or SLV are actual metal, mind you. The simply serve as a proxy for price on these charts.
  • The candlesticks are the shares themselves. The lines are the comparisons, either S&P, GLD or SLV.
  • I chose these stocks because we've mentioned/followed them before here at TFMR. Feel free to post your own charts in the comments if you feel I've left out a few.

Let's start with GLD and SLV. Since 1/1/11, gold is slightly ahead of the S&P but silver is slightly behind.

The old question is: Do you want the good news first or the bad news? In this case, do you want to see the winners first or the losers? Hmmm...I don't know. Let's start with the losers...those stocks that, for the past two years, have horribly underperformed versus physical metal. First, here's the HUI (Amex Gold Bugs Index). As you can see, the index tracked physical pretty closely through the first four months of 2011 and then it went straight to hell in a handbasket.

And look at these nasty, little devils. MrT pities the fool that be stuck owning these.

Perhaps you thought it would be "safe" to "diversify" into an ETF like the "GDXJ"? Nope.

Or maybe a nice, open-ended fund (so that your advisor cold make a commission - hey, he's gotta eat, too.) Uhhh...not so much.

So, are there any stocks that are, at least, tracking along with physical? Well, there's CDE. Sometimes it beats SLV, sometimes it doesn't but, in the end, it's been hanging in there.

And Silver Wheaton has been tracking silver pretty closely, about as you would expect.

And Randgold is fun. It tends to outperform bullion when price is rising and underperform when price is falling. For equity options players, this is a good one to follow and trade.

So that's all the bad news. How about the good news? I found two actual winners!! Two stocks that have actually outperformed physical metal over the past two years. One junior gold miner and one junior silver. Remember, though, that past performance is definitely not a predictor of future returns. Caution is always warranted.

So, what's the point of all this? Why even jack around with these damn things? Just buy physical metal, take delivery and forget about it. And don't tell me about your IRA. There are plenty of companies out there that can help you to buy bullion within that thing, too.

Stack, stack, stack and BTFD. Your only winning move.

TF

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  267 Comments

Jan 9, 2013 - 1:27pm
indosil
Jan 9, 2013 - 1:27pm

first

first

indosil
Jan 9, 2013 - 1:28pm

damn..third

damn..third...phew..that was close

StevenBHorse
Jan 9, 2013 - 1:30pm

Why mess around with these ?

Returns of Producers in 1979-1980 Mania

Company

Price on
12/29/1978

Sept. 1980
Peak

Return

Campbell Lake Mines

$28.25

$94.75

235.4%

Dome Mines

$78.25

$154.00

96.8%

Hecla Mining

$5.12

$53.00

935.2%

Homestake Mining

$30.00

$107.50

258.3%

Newmont Mining

$21.50

$60.62

182.0%

Dickinson Mines

$6.88

$27.50

299.7%

Sigma Mines

$36.00

$57.00

58.3%

Giant Yellowknife Mines

$11.13

$39.00

250.4%

AVERAGE

289.5%

Returns of Juniors in 1979-1980 Mania

Company

Price on
12/29/1978

Price
Peak

Date
of Peak

Return

Carolin Mines

$3.10

$57.00

Oct. 80

1,738.7%

Mosquito Creek Gold

$0.70

$7.50

Oct. 80

971.4%

Northair Mines

$3.00

$10.00

Oct. 80

233.3%

Silver Standard

$0.58

$2.51

Mar. 80

332.8%

Lincoln Resources

$0.78

$20.00

Oct. 80

2,464.1%

Lornex

$15.00

$85.00

Oct. 80

466.7%

Imperial Metals

$0.36

$1.95

Mar. 80

441.7%

Anglo-Bomarc Mines

$1.80

$6.85

Oct. 80

280.6%

Avino Mines

0.33

5.5

Dec. 80

1,566.7%

Copper Lake

$0.08

$10.50

Sep. 80

13,025.0%

David Minerals

$1.15

$21.00

Oct. 80

1,726.1%

Eagle River Mines

$0.19

$6.80

Dec. 80

3,478.9%

Meston Lake Resources

$0.80

$10.50

Oct. 80

1,212.5%

Silverado Mines

$0.26

$10.63

Oct. 80

3,988.5%

Wharf Resources

$0.33

$9.50

Nov. 80

2,778.8%

AVERAGE

2,313.7%

I got stacks too......hidden in the confines of my personal stable of solitude.
indosil
Jan 9, 2013 - 1:33pm

Repost From Last Thread

Fed Now Pre-Monetizing: Bernanke Buys $300 Million Of Treasury To Be Auctioned Off Tomorrow Submitted by Tyler Durden on 01/09/2013 11:24 -0500

  • Ben Bernanke
    • Debt Ceiling
      • Monetization
        • POMO


        • There was a time when the Fed would repurchase freshly issued bonds a month, a week, or even a day afterthey were auctioned off by the Treasury (to avoid that whole perjury-inducing "no monetization" stigma). That's no longer the case. Moments ago the Fed concluded its most recent POMO as part of the now unsterilized QE4EVA, focusing on 2036-2042 maturities, i.e., the long-end. A quick look at the issues bought shows that the one CUSIP most put back by dealers to the Fed was the 912810QY7 30 Year. Curiously this is precisely the same CUSIP that, despite the debt ceiling being breached and all, will be auctioned off... tomorrow. Granted, it is a reopening (29 year, 10 month issue), but in a world in which nothing financial makes sense, and idiots come up with debt ceiling avoidance "schemes" that could have rolled right off a Lewis Black rant, we prefer to think of itsas pre-monetization, much the same as pre-crime. That said, our hopes that Spielberg will consider putting the script of Monetization Report into a movie, with Paul Giamatti reprising the role of the man who prints the world, will likely not come true.

          Note the highlighted Cusip just monetized by the Fed...

          ... And the link to tomorrow's 912810QY7 auction.

          Finally, since the Fed is no longer in the sterilized monetization business, but has reverted to the bazooka approach, it means POMO days are once again critical as then the Primary Dealers will end up with substantial cash dry powder, to be used to ramp stocks and for other general excess reserve permitting purposes.

          Which is why here is the full calendar of January POMO dates: it may not be a good idea to be short stocks on any of the days listed below.

Hoping to learn
Jan 9, 2013 - 1:36pm

first maybe

maybe 2013 will be better than 2012, The one good thing about 2012 is the fact that the sideways action has allowed me to stack all year long. The year ended with me being let go from my company of ten years. I may not be able to stack for awhile, but I will continue when I secure employment.

Meanwhile I still stop at the LCS and drool a little. He is completely out of 90% (first in 3 years) and he only has a few Morgans and one half gold eagle. That is not much. 2013 must be better but time will tell.

Istack
Jan 9, 2013 - 1:40pm

I wait

i loved this short video. i believe true stackers must wait at least five to ten years to see the true wisdom of stacking

Video unavailable

Edit: I think i tore my ACL i should have been first!

Frankenstein Government
Jan 9, 2013 - 1:46pm

Time For the MinersTo Form Their Own Cartel

I really think forming a cartel is viable and probably necessary for miners. In fact, if they don't, I think the bankers will simply steal their product.

Eric Sprott sparked a thought in me. https://thecivillibertarian.blogspot.com/2013/01/why-forming-gold-or-sil...

StrawbossStevenBHorse
Jan 9, 2013 - 1:52pm

The return on the juniors is

The return on the juniors is the reason why I always keep a core position in Pinetree Capital - a closed end fund that invests in hundreds of these small gold/silver explorers.

PNP.TO in Canada

PNPFF in the US.

www.pinetreecapital.com

Mr. Fix
Jan 9, 2013 - 1:54pm

First off, I want to congratulate “Hoping to learn” :)

I've been trying to beat "Istack" in a fair race for a long time now, and was beginning to think it wasn't possible.

You are a fast learner.

TURD!!!

So, I get the part about stack, stack, stack!

While out there in the school of hard knocks,

I figured that one out of couple years ago.

And after that takedown in May of 2011, there is nothing that can convince me to go back on that promise to myself.

So I stack, stack, stack, but if Main Street is solely dedicated to talking about our precious metals,

stack, stack, stack, is becoming a little redundant.

I was hoping that you would consider a little bit more material focused on

“the end of the great Keynesian experiment” which is upon us now.

It is such fertile ground for discussion, and yet all the good stuff gets lost in the forums.

What are your thoughts on that?

Topics like the trillion dollar coin, or the massive amounts of new regulations, are great topics for discussion,

if you were to pick out one or two of them every day, and let us have at them, many of us would find that more interesting.

I know there is a forum on "what are you doing to prepare?"

But it most definitely does not get much traffic.

If this is a topic that does not concern everyone, it probably should be.

Just thinking out loud,

thank you for all you do, and have a nice day.

Key Economic Events Week of 2/17

2/18 8:30 ET Empire St Manu Idx
2/19 8:30 ET Producer Price Idx
2/19 8:30 ET Housing Starts & Bldg Perms
2/19 2:00 ET January FOMC minutes
2/20 8:30 ET Philly Fed
2/21 Fed Goons all day at Chicago Conf.
2/21 9:45 ET Markit flash Feb PMIs

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Key Economic Events Week of 2/17

2/18 8:30 ET Empire St Manu Idx
2/19 8:30 ET Producer Price Idx
2/19 8:30 ET Housing Starts & Bldg Perms
2/19 2:00 ET January FOMC minutes
2/20 8:30 ET Philly Fed
2/21 Fed Goons all day at Chicago Conf.
2/21 9:45 ET Markit flash Feb PMIs

Key Economic Events Week of 2/10

2/11 10:00 ET Job Openings
2/11 10:00 ET CGP Hump-Hawk House
2/12 10:00 ET CGP Hump-Hawk Senate
2/13 8:30 ET CPI
2/14 8:30 ET Retail Sales
2/14 9:15 ET Cap Ute & Ind Prod
2/14 10:00 ET Business Inventories

Key Economic Events Week of 2/3

2/4 10:00 ET Factory Orders
2/5 8:15 ET ADP Employment
2/5 9:45 ET Markit Service PMI
2/5 10:00 ET ISM Service PMI
2/6 8:30 ET Productivity & Unit Labor Costs
2/7 8:30 ET BLSBS
2/7 10:00 ET Wholesale Inventories

Key Economic Events Week of 1/27

1/28 8:30 ET Durable Goods
1/28 10:00 ET Consumer Confidence
1/29 10:00 ET Pending Home Sales
1/29 2:00 pm ET FOMC Fedlines
1/29 2:30 pm ET Powell presser
1/30 8:30 ET Q4 GDP first guess
1/31 8:30 ET Pers Inc and Spending
1/31 9:45 ET Chicago PMI
2/2 10:00 pm ET Chiefs win SB LIV

Key Economic Events Week of 1/13

1/14 8:30 ET CPI
1/14 9:00 ET Goon Williams
1/15 8:30 ET PPI and Empire Fed
1/16 8:30 ET Retail Sales and Philly Fed
1/17 8:30 ET Housing Starts
1/17 9:15 Et Cap Ute and Ind Prod

Key Economic Events Week of 1/6

1/7 8:30 ET US trade deficit
1/7 10:00 ET ISM Services PMI
1/7 10:00 ET Factory Orders
1/8 8:15 ET ADP employment
1/9 8:00 ET Goon Chlamydia speech
1/9 1:20 ET Goon Evans 2:00 ET Goon Bullard
1/10 8:30 ET BLSBS
1/10 10:00 ET Wholesale Inventories

Key Economic Events Week of 12/16

12/16 8:30 ET Empire State Manu Idx
12/16 9:45 ET Markit flash PMIs Dec
12/17 8:30 ET Housing Starts and Bldg Perms
12/17 9:15 ET Cap Ute and Ind Prod
12/19 8:30 ET Philly Fed
12/20 8:30 ET Final guess Q3 GDP
12/20 10:00 ET Pers Inc and Spending
12/20 10:00 ET Core Inflation

Key Economic Events Week of 12/9

12/10 8:30 ET Productivity and Unit Labor Costs
12/11 8:30 ET CPI
12/11 2:00 pm ET FOMC fedlines
12/11 2:30 pm ET CGP presser
12/12 8:30 ET PPI
12/13 8:30 ET Retail Sales
12/13 10:00 ET Business Inventories
12/13 11:00 ET Goon Williams speech

Key Economic Events Week of 12/2

12/2 9:45 ET Markit Manu PMI
12/2 10:00 ET ISM Manu PMI
12/2 10:00 ET Construction Spending
12/4 9:45 ET Markit Services PMI
12/4 10:00 ET ISM Services PMI
12/5 8:30 ET Trade Deficit
12/5 10:00 ET Factory Orders
12/6 8:30 ET BLSBS
12/6 10:00 ET Wholesale Inventories

Key Economic Events Week of 11/25

11/25 8:30 ET Chicago Fed Nat'l Idx
11/25 7:00 pm ET CGP speech
11/26 8:30 ET Advance Trade
11/26 9:00 ET Case-Shiller home prices
11/26 10:00 ET New home sales
11/26 10:00 ET Consumer Confidence
11/27 8:30 ET Q3 GDP 2nd guess
11/27 8:30 ET Durable Goods
11/27 9:45 ET Chicago PMI
11/27 10:00 ET Pers Inc & Cons Spndg
11/27 10:00 ET Core inflation
11/27 2:00 pm ET Beige Book

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