RE:Pity the analysts Analysts have a special problem with companies whose economics are closely tied to a severely manipulated market - such as is the case with the gold market. Even if you get it right about the company, how in the world can you guess what gold is going to do over the short or intermediate term? Or even over a longer-term period? We have certainly seen the problems with this over the years.
If you have a company that is firing on all cylinders and doing everything right (and is lucking out where luck can be a factor) - and yet the price of gold keeps dropping irrationally or keeps refusing to move to where it should reasonably be - how is a gold miner’s stock price going to come close to accurately reflecting the company’s true fundamentals and prospects?
And basing one’s reputation on making accurate calls vis-a-vis the future price of gold is pretty much a loser’s game. We know how out of whack the price of gold typically is. Whatever the true fundamentals might be with gold, it’s anyone’s guess as to what will happen next. The “best” analysts are repeatedly wrong - and more often than not through no fault of their own. Occasionally they get “lucky” with their calls, but that is all it really is - luck.
So what’s a body to do? Well, I try to make my own investment calls based upon what I believe should be the case with precious metals prices. In an increasingly chaotic world, this approach should make sense over time - and, in any case, I can’t see a reasonable alternative to this approach (other than to stay the hell away from all precious metals related investments). — horace