In this weeks Talking Trading I mention the idea of taking a strategic observation and making some tactical decisions around it. My global overview is that at present precious metals and in particular gold are moving. This is evidenced by my systems generating buy signals across a variety of time frames. It has been awhile since I actually looked at domestic gold stocks so armed with excel I thought I would look at the one month return of a series of stocks as shown in the chart below.
Revisiting these stocks was an interesting experience, I had forgotten how much shit is actually listed locally. Whilst many of these gains look impressive on paper a closer examination reveals that some are simply the result of extremely poor price discovery. This makes trading many of these issues impractical. So whilst gold is showing some signs of life it is still buyer beware.
Chris, you third last sentence is so true.
That reminds me of when I discovered that most of the mining and exploration companies listed make nothing and were always going to make nothing. Who invests in them??!
It is amazing the number of bullshit holes in the ground that masquerade as businesses…..