Investing

Barrick Gold Corp

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  • Feb 26th, 2014 2:46 pm
[OP]
Jr. Member
Dec 30, 2007
167 posts
21 upvotes
Toronto

Barrick Gold Corp

Does anyone have any thoughts or knowledge of where this stock is heading in the near future? I bought this stock last week, and on the weekend digging work was suspended at their Pascua Lama mine because of too much airborne matter (i.e. dust). The stock has been plummeting about 1% daily since then.
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Feb 15, 2008
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This stock makes me sad, but it is, by far, the cheapest Senior large-cap stock. The problems at Pascua Lama just illustrate the massive costs associated with bringing new gold production online, and, over the long term, serve to scare off mining companies that attempt to bring on new supply at current prices (meaning that supply goes into constraint, and prices eventually need to rise on gold to overcome these restraints).

Will this be a $100 stock by Christmas? H*ll no. But hold it for the next 5 years, and I think the chances are fairly good. Even if gold prices don't appreciate much. Of course, never put your entire portfolio into one stock, and diversification even within the sector is always your friend.

The other thing to understand about Barrick is that its been under attack, even by the hard-core "goldbugs" for the past decade because, in the 1990s, they ran a rather successful gold hedging program which, under the leadership of Peter Munk, kept the company alive and growing when most of the gold industry went bankrupt. Another thing to understand is that the ticker symbol "ABX" is also the same 'symbol' used on Bloomberg terminals for sub-prime mortgage debt during the US financial/housing crash. Both of these factors have contributed to the psychology of people avoiding ABX stock.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
[OP]
Jr. Member
Dec 30, 2007
167 posts
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Toronto
Mark, thanks for all the great info. As of now, I plan on holding on to Barrick for the long term. I have been reading the forums on Stockhouse and Investors Hub, but they have many comments on the company.
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tomaccowu wrote: Mark, thanks for all the great info. As of now, I plan on holding on to Barrick for the long term. I have been reading the forums on Stockhouse and Investors Hub, but they have many comments on the company.
Yeah a lot better to own this, IMHO, than to own some junior with a deposit that will have Barricks' same set of issues (ie: cost escalation), but probably won't have the sort of balance sheet that Barrick has to survive unscathed with minimal dilution to the equity.

But really, if you're invested in Barrick, you should also be invested in Goldcorp, Kinross, Agnico Eagle, Coeur D'Alene, amongst other producers. For diversification.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Feb 11, 2009
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Thinking of buying myself at these prices, but then IAMGold almost gave me a heart attack (not literally) when I woke up this morning to see it down 18% :(
Real Estate Agent, MAcc, CPA, CA
Deal Fanatic
Jun 27, 2007
5455 posts
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look out below
next support at 30-31
[OP]
Jr. Member
Dec 30, 2007
167 posts
21 upvotes
Toronto
All the gold companies that I keep an eye on plunged today (ABX, YRI, IMG, K, GGGG, G). The only stock that went up slightly was Central GoldTrust.

Hope ABX doesn't get down to 30-31...
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ccyk wrote: it has been the trend for 3-4 years that gold metal etf beat gold miners. stay away from miners and just buy the metal instead.
Yeah but this trend won't hold up forever. And the miners traditionally have offered significant leverage over the metal price. The lack of confidence in stocks is curious, but there's a lot more upside in the miners than in the metal if one is willing to hang on.

Its also relatively easy for governments to confiscate finished gold, but confiscating mines and actually putting them into production is notoriously difficult.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
Deal Addict
Nov 26, 2005
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Mark77 wrote: Yeah but this trend won't hold up forever. And the miners traditionally have offered significant leverage over the metal price. The lack of confidence in stocks is curious, but there's a lot more upside in the miners than in the metal if one is willing to hang on.

Its also relatively easy for governments to confiscate finished gold, but confiscating mines and actually putting them into production is notoriously difficult.
I am not sure about the leverage. In fact, costs to mine the metal has been rising faster than the metal itself, especially for the new projects. the profit margin has not been improving at all. I'd say metal price is the one leverage on profit margin lol.
[OP]
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Dec 30, 2007
167 posts
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Toronto
Barrick has a Put-call ratio of 0.24 according to http://www.livetradingnews.com/trading- ... K2JLIe5O9P

Does a low put-call ratio generally mean the stock will be bullish? I read several articles on the net, and what they write seems contradictory.

From http://www.optiontradingpedia.com/put_call_ratio.htm:

"A contrarian indicator is an indicator designed to tell a different tale than its basis of calculation is suggesting. All indicators are designed such that higher readings usually suggest bullishness and lower readings, bearishness. This makes the Put Call Ratio a contrarian indicator as the more put options are being traded versus call options, the higher the reading becomes and the more bullish it is supposed to be for the market...

This is why many analysts prefer to take individual equity put call ratios more literally; Higher for bearish, lower for bullish. On top of that, the panic indication of put call options also seem more useful than its contrarian nature. When put call ratio is high, panic is in the market and usually suggest that the bottom is near. However, when put call ratio is low due to widespread optimism, it tends to go on for a while as most investors are more inclined to buy and hold than to sell. "
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Feb 15, 2008
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ccyk wrote: same thing as those stocks heavily shorted, usually the bottom, at least in short term, is near.
Yeah traders who shorted this one, in time, are gonna be like the goatse guy. :lol:
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Nov 21, 2012
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tomaccowu wrote: All the gold companies that I keep an eye on plunged today (ABX, YRI, IMG, K, GGGG, G). The only stock that went up slightly was Central GoldTrust.

Hope ABX doesn't get down to 30-31...
Why buy gold miners? FNV is a better play.

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