They are open ended put options on the petrodollar system (which is yet to go pop). As such they don't and won't work properly until then. Silver miners have yet more optionality with no additional premium, just more vol.
I thought I understood them cause of my background in oil and refining, but clearly i do not.
Excellent analysis, wish I had this months ago when i bought into the major dip in miners after a successful trade in and out of them during their run up.
Guess I'll hold and just accept the dividends until I can get out of the trade in the future
Another thing to consider is that the true 'gold bugs' were borne in the 70s & after '08. For those who say Gold is just a play on lower real yields, should add that yes that's correct, but the other & in my opinion, real 'value' of Gold is essentially a Call option on loss of confidence in Central Banks/fiat; which should grow significantly in value in the years to come
How Gold/silver miners' capex of past few years compares relative to the history?
this is very interesting. u r death right on this
They are open ended put options on the petrodollar system (which is yet to go pop). As such they don't and won't work properly until then. Silver miners have yet more optionality with no additional premium, just more vol.
HI Russell,
I work in a capital allocation team for a Gold miner and this post is brilliant, I learnt alot.
I wonder if low-capex-periods precede a run in equities for other commodities (e.g. Shale)?
Posting this one on Twitter is risky!
Cheers
Ben
As usual you don’t leave any doubts on your Gold Miner opinion. Poor Tavi.
I thought I understood them cause of my background in oil and refining, but clearly i do not.
Excellent analysis, wish I had this months ago when i bought into the major dip in miners after a successful trade in and out of them during their run up.
Guess I'll hold and just accept the dividends until I can get out of the trade in the future
thanks Russ
nice one 👏👏👏
Another thing to consider is that the true 'gold bugs' were borne in the 70s & after '08. For those who say Gold is just a play on lower real yields, should add that yes that's correct, but the other & in my opinion, real 'value' of Gold is essentially a Call option on loss of confidence in Central Banks/fiat; which should grow significantly in value in the years to come