Buy Low Screw High Barrick Shafts Small Investor as Institutions Pick Winners $ABX $GLD $NEM, $GG, $AU, $KCG, $GOLD, $FCX

Barrick Gold (NYSE:ABX) has ridden the snake downwards of late. Gold prices have plummeted. Numerous production problems abound which means negative cash flow implications. Projects are being shut down which sounds like defeat and sunk costs disappearing into the swamp. Can’t exactly see the dividend being increased soon.

What more can you disclose to depress the value of your stock?

I know seeing as the cash flow really stinks, lets raise up some more capital and dilute the investors who have been loyal and believe in gold long-term. Special note to loyal investors. This is a commodities stock. Very difficult to stay loyal despite management’s best efforts.

Bought deal of course. No nasty road show with investors asking embarrassing questions in open mic situations. Institutions who are considered smart money have loaded up. Why the dynamics of gold remain the same.

The institutions are crowning Barrick as royal. Pushing in a lot of cash. Stopping some cash sucking projects and letting the predator come out and play.

Gold believe what you may.

Barrick is being set up for the long-term. Retail investors are paying the price. Other cash strapped gold miners are quivering like mice caught with a hungry snake.

Snacks anyone. Because everything else sucks.

George Gutowski writes from a caveat emptor perspective.

Gold $GLD The Pawnbrokers Sneaky Theft.

Gold. Buy Sell Hold or maybe ignore. What are the metrics after the federal debt ceiling crisis goes on hold for several weeks? Will gold go up? How do we know?

Here is one surprising metric which reflects deep cynicism of John Q Public. Pawn brokers seem to be very active encouraging people to bring in their jewelry and get a friendly no interest loan. If you live in a major market in North America pay attention to the advertising pawnbrokers are engaging in.

They are encouraging the financially un-informed to bring in their jewelry. Of course they only deal in todays prices which are down a wee bit shall we say. The squeeze is on and the financially in astute fall for the sell low buy high strategy. Later if they keep their jobs they’ll be back in the market buying high mark up jewelry and start the whole cycle again.

So if you trade Gold and are looking for a market place behaviour pay attention to your local pawn broker and how he advertises. They are all going long at these levels.

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti

Barrick Gold Conundrum; Commodities and Interest Rates Must Snake Correctly; Good Luck $ABX $GLD

Barrick Gold (NYSE:ABX) has a conundrum. Is it a commodity/interest rate train wreck waiting to happen. Or is a deep value play where buy ugly sell pretty applies in spades.

The stock has dropped dramatically and is just south of $20. Dividend yield is around 4% at depressed stock prices. Some talk about revisiting dividend payment seems to be dissipating given the recent $3 Billion dollar bank loan. Bond ratings still in toilet.

Barrick is a Gold producer with significant interests in copper and energy. Therefor they are a commodities company. Get over it. They may be selling off the energy assets and create a significant liquidity. Thats a good thing.

Barrick has successfully developed many gold properties. Pascua-Lama is one of the largest gold and silver resources in the world, with almost 18 million ounces of proven and probable gold reserves, 4,675 million ounces of silver, and an expected mine life of 25 years. The property is large but will eventually come on stream within a few years and will be a significant cash flow contributor.

Gold prices and interest rates are highly influenced by political influences which are out of the control of management and investors. The stock is deeply discounted with a pay while you wait 4% yield. Pascua-Lama when on stream is expected to have a $200 per oz extraction cost. Accretive cash flow is close at hand.

Interest rates are a wild card. Over time they can only go up. Barrick’s ability to generate wealth for shareholders will be more impacted by its ability to shed debt and or replace expense rates with low rates. Financial engineering needs to rule the board room.

Follow very carefully the temptation for off-balance sheet arrangement will be enormous.

George Gutowski writes from a caveat emptor perspective.

Barrick promotional discoveries! Its copper Its gold $ABX #Gold #copper

Graffiti against Barrick Gold corp. (Barrick: ...

Image via Wikipedia

Barrick (NYSE:ABX) announced two significant Gold discoveries in Nevada. The press release was more focused on confirming how clever they are in exploring next to existing properties and not  much info on how much wealth is to be created. Nevada is politically stable compared to third world sites so it gets an extra check mark.

Investors have been wondering what the strategy is? Are they becoming a copper mine or are they staying solid gold. The announcement is a puff piece designed to keep the gold bugs in the corral. They do pay lip service to the crazy costs of development so even the gold message is a little schizophrenic.
Disclosure: George Gutowski writes from a caveat emptor perspective. I do not have any positions in stocks mentioned in this post. I do not have plans to initiate any new positions within the next 72 hours.