I think Gold is moving back up ! NOW ? Everyone you talk to says gold is going down more, I think EVR hit bottom Rodin and I have been buying at .03 cents. I think we could move up sooner than later, when everybody says gold is going down more, I am buying more. Thanks for the cheap shares. I have been quietly buying, that is why I have been silent. here.
GLTA time is running out in my opinion.
Everyone selling? It's time to buy
The gold price fall means some investors are averaging down. When the gold price plummeted last week, hitting a two-year low, not everyone panicked and sold all their gold stocks.
''I'd buy some more; that's what I'm doing myself,'' says David Coates, a Sydney-based analyst with Baker Steel Capital Managers, one of the biggest investors in gold companies in the world.
The fundamentals of these companies have changed because of a lower gold price, but Coates believes that the value is there because gold will bounce back. At the time of writing, the gold price had stabilised. He adds: ''Companies with good assets and good balance sheets are really cheap down here … the recent gold price move is not representative of the true state of the global economy.''
Coates has been topping up his holdings of both big and small gold producers, including Northern Star, Lachlan Star, Evolution Mining, Endeavour Mining, Resolute Mining, and St Barbara, as well as the explorer Chesser Resources.
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Over the years, I have spoken to hundreds of fund managers, and all believe that if you have a strong ''conviction'' about a stock, and its price moves down, you should buy some more.
As Geoff Wilson of Wilson Asset Management says: ''The best time to buy is when everyone is selling.'' Peter Mouatt of Adam Smith Asset Management concurs, and says that his fund bought salary packages specialist McMillan Shakespeare after it fell 30 per cent in the wake of a government review of fringe benefits tax.
In contrast, if you kept buying building services company Hastie Group after successive falls in the past three years, you would have been left with nothing because the company eventually collapsed.
''Generally, [averaging down] is a sound approach as long as you have a longer-term time horizon and the company's fundamentals are strong,'' Mouatt says.