Rick Rule and strategy.....I always have time to listen (and re listen) to current Rule commentary. Interesting points regarding the inflation of the gold sector as a whole, via the IPO's of new junior's and the share structures of many existing co's getting larger, via secondary offerings.
The one opinion he expressed regarding the current price of the 'gold miners' vs the current price of gold that could be extremely useful and profitable going forward - and this isn't a new concept by any means....
"....in the 12 months to come....cash-flows to gold miners are absolutely going to go parabolic...."
I think most of us would agree that the Senior producers will finally have their day as this plays out - their share price appreciation should be dramatic in the short to medium term. The strategy to profit from this
event is a no-brainer. Go out a couple months on atm (at-the-money) or otm (slightly out-of-the-money) Call options. Touareg mentioned NEM having broken out recently - the NEM Oct $67.50 and $70.00 series of Calls put in a > 100% move today. That qualifies as a 24hr home run!
My bet is on Goldcorp - I'm currently waaaaay long G Calls.
Another bullish case supporting the senior producers: Gold hit $1938 on Sep 6th and had fallen approx 8% as of yesterdays close......but the HUI declined < 5%........this is pretty amazing and perhaps unprecidented. Smart money is getting positioned for what they know is coming.
Anticipating a few cautionary replies.......yes, going long Call options, without an adequate hedge, is high risk and you could stand to lose your entire wad. But......be bold and mighty forces will come to your aid......I always say.