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Gold Rally Pays off
Big for Market Advisor Readers
Published:
March 10, 2008
While a series of sobering
economic reports have battered the major market averages over
the past few months, not all investors are complaining. In fact,
those that have put their money in gold have actually enjoyed
intoxicating gains.Spurred by a volatile mix of factors including soaring crude oil
prices and rising inflation, a tumbling dollar, and even supply
disruptions in South Africa, prices for the shiny yellow metal
have soared to record highs -- flirting with the lofty $1,000
per ounce level this past week.
In times of geopolitical instability or economic uncertainty,
investors often turn to gold as a classic hedge, particularly
when inflation is on the rise. With all this in mind, Paul
Tracy, editor of our
StreetAuthority Market Advisor newsletter, went
panning for gold stocks in his November 2005 newsletter.
At the time, gold prices were languishing below $450 per ounce.
But with inflation building, the dollar falling, and GDP growth
already showing hints of a slowdown, Paul felt the time was
right to begin exploring gold -- and prices have more than
doubled since.
Of course, some companies were far better positioned than others
to take advantage, and Paul recommended Compania De Minas
Buenaventura (NYSE: BVN, $75.77). The Peru-based company was
sitting on some of the richest mines on the planet, and its
extraction costs were well below industry average -- a key
competitive advantage in a commodity industry with no pricing
power.
The company was also teaming up with larger companies like BHP
Billiton (NYSE: BHP) on new joint development ventures. Yet,
despite robust earnings growth forecasts of +40%, the shares
were trading at one of the most attractive valuations in the
industry. Paul singled out the stock and gave it a "Buy" rating
at an initial price of $24.64.
And since then, the shares have turned in a glittering
performance, jumping all the way to $75 -- a gain of +204%.
In this month's
Market
Advisor newsletter, Paul has unearthed another
promising miner that is cashing in on the global commodities
boom. The company is a leading producer of industrial metals
like copper and zinc -- whose prices have soared thanks to
surging demand from China and other emerging markets. The firm
is aggressively planning to step up its production over the next
few years, but like BVN, its shares are still trading at a sharp
discount.
To learn more about this stock, which Paul believes could double
from $40 to more than $80 per share, please
follow
this link.
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Nathan Slaughter
StreetAuthority Staff Writer
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Income Security
of the Month
Our "Income Security of the Month" for July 2008 invests in
a fast-growing overseas market that doesn't get much exposure in the
mainstream financial press. And although it typically makes enormous
annual dividend payments -- it has paid an average dividend of 24.9%
per year over the past five years -- this fund is perhaps most
appealing for its total return potential. Specifically, the fund has
delivered total returns of +263.9% since 2003, and
it ranks in the top 10% of its category over the past decade.
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