Timing Isn't Everything, ABX (Barrick Gold) Chart Study

Some say "timing is everything".  Good timing is certainly a major difference between winners and losers, however there are other important factors.  One is selection.

Thursday we bought NEM (Newmont Mining), after being bearish on gold and gold stocks for all of the past two years.  Two days later, it was 12% higher.  It's still over 6% higher as of this writing. 

What if we'd chosen another globally popular mining stock instead, such as Barrick Gold (ABX)?  It rose 8% in the same time frame, but is now down almost 3%.  That's despite the fact that stock markets and gold are higher over that time span. 

Here's a look at the chart: 

The top panel in the above chart is a 1-year look at Barrick, showing the downtrend in red and a downward channel in black.  Safest entries would be below $12, otherwise something like NEM is a much better bet in our view. 

The bottom two panels in the chart above show 5-day views of first ABX then NEM for comparison.  ABX continues to display remarkable absolute and relative weakness. 


The days when people could imprudently put money into any mining stock and make money are long gone.  The rush of people buying into gold, in both fantasy and in fact with their hard-earned and easily-lost money, is over.  The rush of mutual or hedge funds and analysts to outdo each other with ridiculous and now obviously flawed price predictions and entry levels is over.  The rush now and for a long time to come is to get out with whatever capital and credence is left intact. 

Even if buying at today's pricing people will be lucky to make a profit and to do so they'll require terrific timing and smart selection. 

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