2010-05-06

Buying some gold miners

In one account, my only position for several months has been ProShares UltraShort Euro (EUO). I picked up Anadarko Petroleum (APC) last week. I expected the broader market sell-off, but thought APC sold off too much on the news of the leak in the Gulf. I think they're a great company, but if it breaks down, I'd sell and wait to buy it back at a lower price, especially since the miners may become much more attractive soon. At the moment I'm down about 4% in APC.

Today, I just moved back into Nevsun (NSU), a gold miner that was profitable for me from late 2008 to summer 2009. I sold out and it went up 100% after that. I also picked up some Seabridge Gold (SA) and possibly some Evolving Gold (EVOGF; EVG.V) if my limit order goes through.

Gold continues to be strong and I believe that gold miners can benefit if gold rises or stocks rise. Plus, if the euro reverses, gold and stocks may both rally. I think one can do fine holding an ETF here, such as Market Vectors Gold Miners (GDX) or Market Vectors Junior Gold Miners (GDXJ).

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