View Full Version : Miners, gold, BGMI, etc.
New page on Miners, gold, BGMI, etc. on my site (http://www.NowAndFutures.com/miners.html)
Looking forward to your conclusions ... :)
You have a way of making me word hard... ;)
Most of the charts show how truly volatile miners are, which is not much of surprise... but how frequently they've returned over 100% per year wasn't something I knew.
The BGMI is also a big sleeper - even most gold bugs and gold bulls are unaware of it. It's the only broad index that has data from the major bull in the '70s and lessons are available from it... one being that physical gold actually out performed the huge majority of stocks in the '70s bull.
Another fact is that selling the stocks at the exact time that physical gold peaked (and the Dow/gold ratio reached its high) caused one to miss out on large gains. Who knows whether it'll be the same this time... but as Twain said - history does rhyme.
Another item that *very* few know is that although the HUI index has performed the best (since it has no hedgers in it like the XAU), the BGMI itself performed *very* close to it, and also tracks gold itself as least as well as the HUI does.
Another key item that shows in the BGMI data from the '70s - after the first run up into 1975 or so, most stocks very much *under* performed for the rest of the bull market.
If one was very nimble at trading and caught the stock low in April/May 1980, the returns until they peaked in Oct 1980 were spectacular.
Stay tuned - there are some unpublished charts that I'm still working on that will make visible a possible technique to help increase one's profits.
And of course, there will be other charts too and even some text to help demystify the raw charts and what use they can be.
What do you see in any or all of them?
http://www.NowAndFutures.com/miners.html
Did any of this happen to be partly motivated by certain misconceptions being promulgated by a certain eVangelical? … ;)
Seriously, the BGMI sure hasn’t gotten much publicity, especially considering that it has the longest tracking history of the sector that we know of. All the more so given the level of interest in the gold mining sector these days. As you well know (perhaps ad nauseum) I completely agree with your observation about gold bullion having outperformed gold mining stocks in the last great gold bull market. This is a surprisingly little-known fact given the aforementioned interest.
It’s an expected relationship, since the stock of gold mining companies is still stock. It may well outperform most other sectors of stock when gold is in a bull market, but that nevertheless doesn’t negate the fact that paper assets tend to underperform hard assets when the former is in a bear market and the latter in a bull market. Yet despite good theory, we had no factual evidence until we stumbled upon the BGMI.
I had actually already been on the BGMI well before that certain eVangelical (love it :)) went off the deep end recently... again.
It is quite funny to see him wriggling and avoiding, all the while not knowing the answers... that have been on my site for weeks. :D ;)
I did actually have much evidence of the physical gold vs. stocks performance issue in the '70s, but copyright and other legal issues prevented me from posting and/or sharing it.
Credit where credit is due too: to SirEd on DR for first bringing it up, to Nick at sharelynx.com for the data, and especially to Mark Lundeen for the laborious work of library research and conversion of paper into electronic data.
The real value to me of all the current charts, and ones to come, is that they all put a lot of just plain facts out there that make it that much harder to cover something up... as well as making things visible that should be a lot more visible.
It appears that the biggest concern about the value and usefulness of the BGMI is related to its composition supposedly not matching the "average" gold stock... but it does almost exactly match the HUI for the HUI's full history since 1996 and is therefore pretty much a moot point.
There is of course the issue of it not matching juniors miners performance, and that's true. Junior miners are *much* more volatile and extraordinarily risky... and can also produce extraordinary returns.... more to come in that area too.
Finster
05-10-07, 05:45 PM
New page on Miners, gold, BGMI, etc. on my site (http://www.NowAndFutures.com/miners.html)
You have a way of making me word hard... ;)
Turnabout is fair play …? ;-)
It appears that the biggest concern about the value and usefulness of the BGMI is related to its composition supposedly not matching the "average" gold stock... but it does almost exactly match the HUI for the HUI's full history since 1996 and is therefore pretty much a moot point.
The amount of noise (emanating from that certain eV…al, in particular) bears little relationship to the actual magnitude of the issue. Whatever imperfections it may have, the BGMI was at least constructed by objective professionals set out to create a series representative of gold mining stock. What’s more, from the standpoint of having to decide which securities to include without having knowledge of their subsequent performance.
That it and the HUI track is one more instance of fact verifying the theory. When different approaches to the same issue point towards the same conclusion, doesn’t it just give you that warm and fuzzy feeling?
Now, maybe you can tell us a bit about what your practiced eye sees in yonder squiggly lines ...
The amount of noise (emanating from that certain eV…al, in particular) bears little relationship to the actual magnitude of the issue. Whatever imperfections it may have, the BGMI was at least constructed by objective professionals set out to create a series representative of gold mining stock. What’s more, from the standpoint of having to decide which securities to include without having knowledge of their subsequent performance.
That it and the HUI track is one more instance of fact verifying the theory. When different approaches to the same issue point towards the same conclusion, doesn’t it just give you that warm and fuzzy feeling?
Indeed, I added that small section about the BGMI components just to let you pontificate... ummm... make that spring forth with awesome words of wisdom with truth and justice for all... ;)
I'll see that warm, fuzzy and raise you at least one.
The eV..al "discussions" of today encouraged me to alter my plans for updating that page and I just spent an hour or so putting together as full a picture as I can currently legally put together regarding junior miners... and the picture pretty much remains the same as we both expected. Physical outperformed as long as the peak is assumed in January 1980.
Juniors performance (http://www.NowAndFutures.com/miners.html#junior1)
Now, maybe you can tell us a bit about what your practiced eye sees in yonder squiggly lines ...
You mean there's something else besides squiggly lines? :eek:
What is it that you'd like me to babble or pontificate about?
Finster
05-11-07, 11:47 AM
Indeed, I added that small section about the BGMI components just to let you pontificate... ummm... make that spring forth with awesome words of wisdom with truth and justice for all... ;)
I'll see that warm, fuzzy and raise you at least one.
The eV..al "discussions" of today encouraged me to alter my plans for updating that page and I just spent an hour or so putting together as full a picture as I can currently legally put together regarding junior miners... and the picture pretty much remains the same as we both expected. Physical outperformed as long as the peak is assumed in January 1980.
Juniors performance (http://www.NowAndFutures.com/miners.html#junior1)
Given the context, it's certainly interesting that someone has put together an index of "junior" miners. I'd be very cautious, however, about drawing any conclusions based on extrapolating the relationship between the FSO index and the BGMI back to the past. This is because these "junior" stocks are practically by definition the most speculative and risky of the overall mining sector. While one can construct an index ex ante and draw reliable conclusions, ex post is another matter altogether. If you construct an index after the fact, you run the risk of biasing the results by selecting only those that survived some past period, underweighting or excluding those that went out of business. This isn't as much of an issue with established companies for the obvious reasons, but with an index of "juniors", the hole-in-the-ground-with-a-liar-at-the-top companies, that is where you're mostly likely to find them.
This isn't a problem with an ex ante index, because you don't know in advance which companies are going to go belly up, and even if you did, then at least real-life investors could avoid them as well.
Moreover, there's yet another issue to be considered. When we look back at the 1970s, we can consider an entire secular cycle. We can't do that now, because we are only part way through the current cycle. The relationship between the performance of one subsector and the whole in one part of the cycle can't be assumed to apply throughout. Just as with the relationship between gold bullion and gold mining stock. This is one of the major holes in that eV'al guy's reasoning. He examines only part of this cycle and then assumes the relationship holds throughout. That is, that since mining stock outperformed bullion in 2001-2004 or whatever, that that relationship can be imputed to the entire bull market. Not only this one, but the last one as well.
This is all the more important when you consider that it is towards the end of a bear market in paper assets that investors become their most distrusting of them.
The take-away from all this is that we cannot construct a valid estimate of the performance of junior miners in the 1970s by comparing the performance of junior miners with the broad sector in part of this cycle and then imputing the same ratio to the prior full cycle.
No nits to pick with the rest of your mining page. My favorite is the part with the charts showing "Gold, S&P 500, XAU, HUI & BGMI" all together (and am especially partial to the longer term version, but you know me...). Even I can see the message there without a tour guide!
You mean there's something else besides squiggly lines? :eek:
What is it that you'd like me to babble or pontificate about?
Hui? Moi? Did I ever need advice on how to babble or pontificate? ;)
Seriously, the only thing that strikes me is that you might give us some insight on the message you see in the charts. Remember, the rest of us are not necessarily chart visionaries ... ;) Something motivated you to process the data in the way that you did, and to juxtapose the resulting series together on certain charts. What was it you were looking for, and what message do you see in the results? Just for example, does the annual rate of change of the BGMI and gold, or versus the S&P, imply something to you about probable future performance? Does something appear to be particularly "out-of-whack", e.g. "too low", "too high" or otherwise?
...
Thanks Bart. I put that in my favorites
Regards
Given the context, it's certainly interesting that someone has put together an index of "junior" miners. I'd be very cautious, however, about drawing any conclusions based on extrapolating the relationship between the FSO index and the BGMI back to the past. This is because these "junior" stocks are practically by definition the most speculative and risky of the overall mining sector. While one can construct an index ex ante and draw reliable conclusions, ex post is another matter altogether. If you construct an index after the fact, you run the risk of biasing the results by selecting only those that survived some past period, underweighting or excluding those that went out of business. This isn't as much of an issue with established companies for the obvious reasons, but with an index of "juniors", the hole-in-the-ground-with-a-liar-at-the-top companies, that is where you're mostly likely to find them.
This isn't a problem with an ex ante index, because you don't know in advance which companies are going to go belly up, and even if you did, then at least real-life investors could avoid them as well.
Moreover, there's yet another issue to be considered. When we look back at the 1970s, we can consider an entire secular cycle. We can't do that now, because we are only part way through the current cycle. The relationship between the performance of one subsector and the whole in one part of the cycle can't be assumed to apply throughout. Just as with the relationship between gold bullion and gold mining stock. This is one of the major holes in that eV'al guy's reasoning. He examines only part of this cycle and then assumes the relationship holds throughout. That is, that since mining stock outperformed bullion in 2001-2004 or whatever, that that relationship can be imputed to the entire bull market. Not only this one, but the last one as well.
This is all the more important when you consider that it is towards the end of a bear market in paper assets that investors become their most distrusting of them.
The take-away from all this is that we cannot construct a valid estimate of the performance of junior miners in the 1970s by comparing the performance of junior miners with the broad sector in part of this cycle and then imputing the same ratio to the prior full cycle.
No nits to pick with the rest of your mining page. My favorite is the part with the charts showing "Gold, S&P 500, XAU, HUI & BGMI" all together (and am especially partial to the longer term version, but you know me...). Even I can see the message there without a tour guide!
Your point about extrapolating is very well taken and I have added a sentence addressing it:
There are many ways to compare junior miners and calculate how they will or won't out perform other miners, and we have only shown one "best effort" example.
I did it more to show one possible fact based approach than to try and assert any particular opinion. It's a bit like the FDI in a small sense - no one else has done it of which I'm aware, and so it's the best currently out there... :eek: :cool: ;)
There are also a few other junior miner indexes out there, but the ones that Jim Puplava and Frank Barberra have put together is simply a starting point and they also have a known track history and have white hats... and I'm also willing to entertain any other approach to guesstimating what juniors might do in the entire bull too (and the power forbid that having said that, I'll have to use my get out of Fin free card on this thread ;)).
I also note, as an aside, that it's not unusual for juniors to have 50-75% corrections and even as much as 90%, and some end up a total loss... so extraordinarily high risk belongs in any discussion of them.
Even senior miners see more than a few 25-50% corrections during a secular bull, and as the BGMI showed during the '70s there was even an almost 75% correction between '74 and '77. That correction encompassed and then some the drop in gold itself from about $200 in late '74 to about $100 in mid '77.
Hui? Moi? Did I ever need advice on how to babble or pontificate? ;)
Seriously, the only thing that strikes me is that you might give us some insight on the message you see in the charts. Remember, the rest of us are not necessarily chart visionaries ... ;) Something motivated you to process the data in the way that you did, and to juxtapose the resulting series together on certain charts. What was it you were looking for, and what message do you see in the results? Just for example, does the annual rate of change of the BGMI and gold, or versus the S&P, imply something to you about probable future performance? Does something appear to be particularly "out-of-whack", e.g. "too low", "too high" or otherwise?
...
Mostly, I like to leave the babbling & pontificating up to those much more qualified for the job... ;)... and more seriously I think of that page and most of the other pages on my site as both "just the facts ma'am" and also allowing folk to draw their own conclusions based on their own approaches.
You use log charts and I use annual rates of change to show relationships and relative returns. I included the S&P or Dow on most of the charts so far so that there's a more known basis (or "stable datum" as I sometimes say) on which to draw conclusions. Also, I wasn't looking for any particular message... at least until after the charts were built.
But there are some very obvious things that may not be quickly apparent, especially on the 1970-1982 record.
1. The dollar and gold did not track very well
2. The Dow and gold did not track, except during '75-'77
3. The yield curve has a significant effect on both gold and miners (hint, hint ;)).
Most of those are either backwards from today's thoughts of most, or are relatively unknown factors.
As far as direct comparisons, along the lines of history rhyming, the '72 to early '74 period has strong parallels to today and also roughly aligns with ka-poom. 1977-'78 also has some parallels.
The juniors section was built partially to satisfy myself and also to just plain do something that no one else has done. The bottom line out of it wasn't unexpected and does show that it can be easy to outsmart oneself by doing cherry picking and not listening to the actual data (d'oh). That's not to say that extraordinary returns can't or won't be gotten from juniors in the current bull, just that the full picture shows something different than most think or expect.
As far as something being out of whack, as a general view, miners seem overvalued and physical gold seems undervalued, given the '70s relationships and my overall knowledge of both periods (including the behind the scenes areas).
So... is there anything else you'd like that will make me word hard again? ;)
Finster
05-12-07, 08:07 PM
Your point about extrapolating is very well taken and I have added a sentence addressing it:
You are making finning you rather difficult … ;)
Mostly, I like to leave the babbling & pontificating up to those much more qualified for the job...
Did you notice? The kind folk at iTulip have created yet another forum just for thee and me!
Rant and Rave Rules
(http://www.itulip.com/forums/showthread.php?t=1317)
You use log charts and I use annual rates of change to show relationships and relative returns…
Capish...
But there are some very obvious things that may not be quickly apparent, especially on the 1970-1982 record.
1. The dollar and gold did not track very well…
If by "the dollar" you mean the dollar in relation to other government currencies in the forex markets, then that’s not at all surprising.
2. The Dow and gold did not track, except during '75-'77
Copasetic.
3. The yield curve has a significant effect on both gold and miners (hint, hint ;)).
Copasetic.
As far as something being out of whack, as a general view, miners seem overvalued and physical gold seems undervalued, given the '70s relationships and my overall knowledge of both periods (including the behind the scenes areas).
This is another one of those separated-at-birth things, where we reach consonant conclusions via quite different and independent routes. One of the reasons I’ve thus far not been able to get much excited about PM mining stock is that the valuations - figured using fundamentals like book value, dividends, etceteras, have shown them to be fairly rich. FWIW, however, this is not an article of faith with me … if/when the broad stock market sells off (and this sector as well, likely even harder) … historical precedent suggests the rebound is likely to see this group outperform. Interested readers can refer to your Miners (http://www.nowandfutures.com/miners.html) page for some charts illustrating such precedent.
So... is there anything else you'd like that will make me word hard again? ;)
Yes, but you might enjoy it too much …
... kicking eV’al butt … :eek: :D
You are making finning you rather difficult … ;)
*huge sigh of relief* :D
Did you notice? The kind folk at iTulip have created yet another forum just for thee and me!
Rant and Rave Rules
(http://www.itulip.com/forums/showthread.php?t=1317)
:D :D :eek: :eek: ;)
I was sorely tempted to post this over there but figured that someone else should have the honor of the first rant/rave moment.
http://www.nowandfutures.com/grins/do_brave_thing_then_run_like_hell.jpg
This is another one of those separated-at-birth things, where we reach consonant conclusions via quite different and independent routes. One of the reasons I’ve thus far not been able to get much excited about PM mining stock is that the valuations - figured using fundamentals like book value, dividends, etceteras, have shown them to be fairly rich. FWIW, however, this is not an article of faith with me … if/when the broad stock market sells off (and this sector as well, likely even harder) … historical precedent suggests the rebound is likely to see this group outperform. Interested readers can refer to your Miners (http://www.nowandfutures.com/miners.html) page for some charts illustrating such precedent.
As you said - copacetic.
And do note that I just added a section about yield curves that will either cause you to change at least part of your mind, or start another *fin* attempt... or both. :D
Yes, but you might enjoy it too much …
... kicking eV’al butt … :eek: :D
'tis well under way but he's grasping and so pathetic that I'll probably just build a macro to deal with his foaming at the mouth after the real facts hit him... :D :cool: :)
Finster
05-13-07, 09:24 AM
'tis well under way but he's grasping and so pathetic that I'll probably just build a macro to deal with his foaming at the mouth after the real facts hit him... :D :cool: :)
:cool:
And do note that I just added a section about yield curves that will either cause you to change at least part of your mind, or start another *fin* attempt... or both. :D
You started me thinking about ways to back-estimate the performance of "juniors" in the 1970s. Despite the caveats expressed above, yours is at least the first attempt to do so that I'm aware of. And of course it's not totally invalid (my apologies if I said it was). Let's just say I'd take it with a fair-sized grain of salt due to those potentially confounding factors.
Okay, so mister smarty pants Finster, what would you do? Glad you asked. ;) Start with the BGMI and FSO's "junior" index (FSOJ), just like you have done. Then augment that with a comparison of large and small cap stocks during the current (recent history) period, and also in the 1970s. (Say, using the S&P 500 or DJIA versus the Russell 2000 or S&P Small Cap or S&P Wilshire 4500 completion index, depending on what's available for the 1970s.) Then use the relative performance of the large and small cap indices between the two periods to adjust the scaling of the BGMI-FSOJ between the two periods. In formal terms, apply multiple linear regression.
The reasoning here is that small caps are known to have outperformed large in the 1970s, and have also done so during the last few years. What we'd be asking is by how much did small caps relatively outperform during this portion of the current cycle? By comparing that with the prior cycle, and relative performance of small and large caps during the entire prior cycle, one can refine one's idea of how much small cap mining stocks could be assumed to have outperformed large during all portions of the prior cycle.
It wouldn't be perfect, because you still have potential unaccounted-for ex-ante-ex-post survivorship bias, plus the analogy between whatever large and small cap indices on one hand and the BGMI versus FSOJ on the other itself would be less than perfect, but this way you could at least control for changes in small-versus-established-company performance during different portions of the cycle.
I might attempt it myself, but am not sure I care enough about "junior" mining stock performance in the 1970s to work that hard. ;) But since you have already gone partway out that limb anyway ...
You started me thinking about ways to back-estimate the performance of "juniors" in the 1970s. Despite the caveats expressed above, yours is at least the first attempt to do so that I'm aware of. And of course it's not totally invalid (my apologies if I said it was). Let's just say I'd take it with a fair-sized grain of salt due to those potentially confounding factors.
Okay, so mister smarty pants Finster, what would you do? Glad you asked. ;) Start with the BGMI and FSO's "junior" index (FSOJ), just like you have done. Then augment that with a comparison of large and small cap stocks during the current (recent history) period, and also in the 1970s. (Say, using the S&P 500 or DJIA versus the Russell 2000 or S&P Small Cap or S&P Wilshire 4500 completion index, depending on what's available for the 1970s.) Then use the relative performance of the large and small cap indices between the two periods to adjust the scaling of the BGMI-FSOJ between the two periods. In formal terms, apply multiple linear regression.
The reasoning here is that small caps are known to have outperformed large in the 1970s, and have also done so during the last few years. What we'd be asking is by how much did small caps relatively outperform during this portion of the current cycle? By comparing that with the prior cycle, and relative performance of small and large caps during the entire prior cycle, one can refine one's idea of how much small cap mining stocks could be assumed to have outperformed large during all portions of the prior cycle.
It wouldn't be perfect, because you still have potential unaccounted-for ex-ante-ex-post survivorship bias, plus the analogy between whatever large and small cap indices on one hand and the BGMI versus FSOJ on the other itself would be less than perfect, but this way you could at least control for changes in small-versus-established-company performance during different portions of the cycle.
I might attempt it myself, but am not sure I care enough about "junior" mining stock performance in the 1970s to work that hard. ;) But since you have already gone partway out that limb anyway ...
No worries at all on my juniors comparison efforts and I took no offense at all. It truly is pretty much nothing but a best efforts first attempt, while also being hopefully educational.
Shall I add an image of a large salt shaker near the juniors section on the miners page now? ;)
I suspect I'll just mostly leave it as is, much as I did with my M3 and other efforts, and let others like yourself flesh it out and add to the analysis and facts as they wish.
I'm almost certain that more than a few brickbats will be thrown in my direction, but simply opening up the area for real debate and thought was and is my primary intention.
Markets do change and it is possible that juniors and/or seniors will out perform in the current cycle too...
You're definitely the stock maven between the two of us by far, and your thoughts and data about small and large caps are brand new to me... and also sound like a very valid approach whether you take it up or not. As for me, I have too many other backlogged projects and tasks to entertain it for now.
What did you think of the yield curve charts? The correlation between an upward sloping (or level yield curve at positive values) and relative out performance of miners is pretty clear...
Finster
05-13-07, 11:35 AM
No worries at all on my juniors comparison efforts and I took no offense at all. It truly is pretty much nothing but a best efforts first attempt, while also being hopefully educational.
Shall I add an image of a large salt shaker near the juniors section on the miners page now? ;)
I suspect I'll just mostly leave it as is, much as I did with my M3 and other efforts, and let others like yourself flesh it out and add to the analysis and facts as they wish.
I'm almost certain that more than a few brickbats will be thrown in my direction, but simply opening up the area for real debate and thought was and is my primary intention.
Markets do change and it is possible that juniors and/or seniors will out perform in the current cycle too...
You're definitely the stock maven between the two of us by far, and your thoughts and data about small and large caps are brand new to me... and also sound like a very valid approach whether you take it up or not. As for me, I have too many other backlogged projects and tasks to entertain it for now.
What did you think of the yield curve charts? The correlation between an upward sloping (or level yield curve at positive values) and relative out performance of miners is pretty clear...
It makes sense. In general, stocks tend to strongly follow the yield curve, and there's no reason to believe mining stocks would be an exception.
I may yet do the small-large-cap regression analysis, if for no other reason than to satsify my curiosity. My guess is that it would generally confirm your work, but for the reasons outlined above, likely suggest a lesser overall gap between the BGMI and the FSOJ throughout the course of the entire cycle.
It will probably mostly depend on how much trouble I have getting my hands on good data showing small cap stock performance during the seventies. Also, I don't happen to have in hand the recent FSOJ data. If those obstacles can be readily overcome, I'll probably go for it.
As much fun as making you work hard is ... ;)
It makes sense. In general, stocks tend to strongly follow the yield curve, and there's no reason to believe mining stocks would be an exception.
I may yet do the small-large-cap regression analysis, if for no other reason than to satisfy my curiosity. My guess is that it would generally confirm your work, but for the reasons outlined above, likely suggest a lesser overall gap between the BGMI and the FSOJ throughout the course of the entire cycle.
It will probably mostly depend on how much trouble I have getting my hands on good data showing small cap stock performance during the seventies. Also, I don't happen to have in hand the recent FSOJ data. If those obstacles can be readily overcome, I'll probably go for it.
As much fun as making you work hard is ... ;)
Cool! (and no comment on work hard or word hard... ;))
I tried to add the S&P 500 to the yield curve charts, but the change rates were too difficult to see, given the much higher volatility of miners.
*Very* interesting that your belief is that a lesser overall gap would exist than I posited between juniors and the BGMI.
I hope you do decide to do the research, and I wish I knew of any decent historical series on small cap data. I'd start at yahoo and Dow Jones themselves, and then wing it with search engines. My experience is that finding and importing and formatting the actual data is usually the most time consuming portion, and I suspect your experiences are similar.
As far as the FSOJ data, I only used the averages. I think there are still some significant legal hurdles left for Puplava's indexes before they publish either the components or raw data itself.
There also is another junior index available at http://www.goldcolony.com/index-new-2005.asp for what its worth. At least they list the 50 stocks in it...
Finster
05-13-07, 02:18 PM
*Very* interesting that your belief is that a lesser overall gap would exist than I posited between juniors and the BGMI.
Just a qualitative judgment. And little implied about the size of the gap at that. It could be de minimus, or pretty substantial. For that matter, I could be wrong altogether and it might suggest a higher performance for juniors in the 1970s. Just that that would amount to a surprise if it turned out to be the case. The only way to know for sure would be to do it.
I hope you do decide to do the research, and I wish I knew of any decent historical series on small cap data. I'd start at yahoo and Dow Jones themselves, and then wing it with search engines. My experience is that finding and importing and formatting the actual data is usually the most time consuming portion, and I suspect your experiences are similar.
You can say that again! A huge bulk of my financial spreadsheets is taken up just with data splicing, scaling, cleaning and formatting. Substantive processing winds up being simple in comparison.
As far as the FSOJ data, I only used the averages. I think there are still some significant legal hurdles left for Puplava's indexes before they publish either the components or raw data itself.
There also is another junior index available at http://www.goldcolony.com/index-new-2005.asp for what its worth. At least they list the 50 stocks in it...
The juniors index data was the main thing. I’d just assumed you had a whole time series for the FSOJ. Checking back to your site, though, I gather you eyeballed endpoints from their chart. (?) If that’s the case, then I capitulate: I wouldn’t be able to improve on your results. I wouldn’t need a detailed methodology or component list or anything like that, but I’d need at least a monthly series of the index values. I checked and evidently they only have it in graphic form. :( The good news is you remain the unchallenged top dog for estimating 1970s junior miner performance! ;)
GoldColony, on the other hand, does have actual numerical index data posted on its site. Only issue there is that there remains the concern about proprietary rights and derivative use. I suppose I could do an internal study and see if it yields up anything worthy of public revelation, and then look into the rights issue if the results turned up interesting enough.
Not sure this is the right place for it, but I'm wondering if this is a sign of the Apocolypse. Or maybe a sign of the KApocolypse?
Dec 2010 gold calls at 1000 have gone from ~55 to ~35 in the last couple weeks:
http://sites3.barchart.com/pl/vsn/optqte.htx?sym=GC&mode=D
What's driving this?
Not sure this is the right place for it, but I'm wondering if this is a sign of the Apocolypse. Or maybe a sign of the KApocolypse?
Dec 2010 gold calls at 1000 have gone from ~55 to ~35 in the last couple weeks:
http://sites3.barchart.com/pl/vsn/optqte.htx?sym=GC&mode=D
What's driving this?
Lots of possible answers to what's driving it. Amongst them are the very high volatility of gold plus the manipulation/control going on, and also the recent reversal of the dollar drop.
It strikes me that it indicates an approach of a low, whether short term or not.
Just a qualitative judgment. And little implied about the size of the gap at that. It could be de minimus, or pretty substantial. For that matter, I could be wrong altogether and it might suggest a higher performance for juniors in the 1970s. Just that that would amount to a surprise if it turned out to be the case. The only way to know for sure would be to do it.
About the best we can hope for I think is a public juniors index with a decent history - at least since 2000.
You can say that again! A huge bulk of my financial spreadsheets is taken up just with data splicing, scaling, cleaning and formatting. Substantive processing winds up being simple in comparison.
I wonder if anyone will offer us loads of sympathy for our data travails and trials and tribulations? :cool:
The juniors index data was the main thing. I’d just assumed you had a whole time series for the FSOJ. Checking back to your site, though, I gather you eyeballed endpoints from their chart. (?) If that’s the case, then I capitulate: I wouldn’t be able to improve on your results. I wouldn’t need a detailed methodology or component list or anything like that, but I’d need at least a monthly series of the index values. I checked and evidently they only have it in graphic form. :( The good news is you remain the unchallenged top dog for estimating 1970s junior miner performance! ;)
GoldColony, on the other hand, does have actual numerical index data posted on its site. Only issue there is that there remains the concern about proprietary rights and derivative use. I suppose I could do an internal study and see if it yields up anything worthy of public revelation, and then look into the rights issue if the results turned up interesting enough.
I actually just picked up the work that Barberra provided in his 2006 performance wrap up article. If there is another index that's both at least as valid and has a longer track history, I'll add it in as a separate analysis... but I suspect that given both my experience and other non public data I do have that the results would be similar.
My basic concern about the GoldColony index is that it's not a representative sample of all juniors.
If you do go ahead with more research, feel free to steal anything from my miner's page.
And since you may have capitulated, can I get another Get Out of Fin free card? ;)
http://www.goohf.com/card.gif
Finster
05-13-07, 06:08 PM
About the best we can hope for I think is a public juniors index with a decent history - at least since 2000.
I wonder if anyone will offer us loads of sympathy for our data travails and trials and tribulations? :cool:
I actually just picked up the work that Barberra provided in his 2006 performance wrap up article. If there is another index that's both at least as valid and has a longer track history, I'll add it in as a separate analysis... but I suspect that given both my experience and other non public data I do have that the results would be similar.
My basic concern about the GoldColony index is that it's not a representative sample of all juniors.
If you do go ahead with more research, feel free to steal anything from my miner's page.
Just to note Barbera refers not to the "FSOJ", but the "FSJG" ... will try to follow the latter acronym convention in the future ...
Not clear on your complaint about the Gold Colony index ... is it because you don't think it has enough? Or that that its selection process results in the membership being unrepresentative?
Just to note Barberra refers not to the "FSOJ", but the "FSJG" ... will try to follow the latter acronym convention in the future ...
Not clear on your complaint about the Gold Colony index ... is it because you don't think it has enough? Or that that its selection process results in the membership being unrepresentative?
Will do from here too on the "FSJG".
My reservation on the Gold Colony index is it being fairly representative of all juniors... and there's also plenty I don't know about juniors too, so add salt to taste.
(edit/add - part of the problem is that to the best of my knowledge, there's no broadly accepted definition of a junior)
Finster
05-14-07, 06:16 AM
...(edit/add - part of the problem is that to the best of my knowledge, there's no broadly accepted definition of a junior)
BINGO! This is one of the arguments I raised to that eV'al guy. Since there is no clear line of demarcation between "junior" and the rest of the sector, it's leaves it to the discretion of the commentator to select according to his own preferences and biases. In other words, it winds up being highly susceptible to "cherry picking".
grapejelly
05-14-07, 07:41 AM
Very similar to any other venture-backed startup...the large companies no longer rely upon their own resources, but instead rely upon acquisition to build reserves and secure new opportunities.
For this reason, I think, the junior explorers seem to be much higher potential return than the other junior categories.
I think the fundamental trouble with miners is share dilution but for these micro cap juniors, that isn't as much of an issue if they actually win on any of their "lottery tickets".
What I might call micro cap junior explorers can offer incredible leverage if/when they make an important discovery and package it for "the big boys".
BINGO! This is one of the arguments I raised to that eV'al guy. Since there is no clear line of demarcation between "junior" and the rest of the sector, it's leaves it to the discretion of the commentator to select according to his own preferences and biases. In other words, it winds up being highly susceptible to "cherry picking".
Perhaps in another few years as miners overall get more broad public attention, a definition will evolve. Puplava will likely be a driving force in it... and the eV'al will figure out how to spin it to his advantage too.
Very similar to any other venture-backed startup...the large companies no longer rely upon their own resources, but instead rely upon acquisition to build reserves and secure new opportunities.
For this reason, I think, the junior explorers seem to be much higher potential return than the other junior categories.
I think the fundamental trouble with miners is share dilution but for these micro cap juniors, that isn't as much of an issue if they actually win on any of their "lottery tickets".
What I might call micro cap junior explorers can offer incredible leverage if/when they make an important discovery and package it for "the big boys".
You're likely right on the shorter term at least, and market sector performance to date certainly backs up your point about small explorers.
And I'm glad you partly characterize them as "lottery tickets" too. Spreading the "investment" over a number of selections helps mitigate both the risk and increases the chances of hitting one of the 10-100x baggers.
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