RE: I don't get it ...My opinion.
It has been noticeable for some time that raw commodities such as metals (esp gold, silver) have been soaring to new highs recently while many of the corresponding stocks for these commodities have been going absolutely nowhere. A significant gap has developed between the commodities and the stocks which sooner or later will close - either the commodity prices will come down or share prices will go up. At the moment it looks as if the commodity prices coming down scenario will win out in the near term.
Incidentally, the commodities were driven up in the first place by large hedge funds which poured money into them while ignoring stocks. There are increasing stories now with names like Sprott and Soros attached to them indicating that the big boys are taking their profits and bailing out.
With all the money going to commodities it's not surprising stocks have languished. There are a couple of other factors which haven't helped the case for stocks:
1. The resource companies, especially the explorers, have been running their printing presses around the clock pumping out shares in one offering after another saturating the market. We criticize Ben Bernanke and his Federal Reserve for printing dollars and driving down the value of the US currency but the resource companies have done the exact same thing and with the exact same result.
2. Many small exploration plays have been hyped and pumped up to ridiculous levels. There's no shortage of small companies with early drill results being worth more than companies like Timmins with an actual operating gold mine. These flashy exploration plays have sucked money away from the actual miners. Boring production numbers can never compete with "Our drill rig is shitting solid gold nuggets! Wow!!!!" Unfortunately after a while even drilling results get repetitive and people start thinking longer term to how many years away a mine might be and how many additional shares are going to have to pump out during that time. Suddenly taking profits and taking cash doesn't seem like such a bad idea after all.
At the TSX and the Venture exchange charts look like beached whales, and we've crossed over the top of the hump and are going down. Unfortunately all ships drop as the tide goes out. The near term outlook continues to look bleak but perhaps with the funds moving out of commodities they'll start looking at stocks to place their monies next. Companies with real value like Timmins could look very attractive especially if we can increase our reserves.