Rick Rule: Gold and silver equities attractively priced

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There have only been two times in the past ten years when, from our own calculations, gold and silver equities were attractively priced relative to the metal, that being 2001 and 2008. We are back strongly in that territory.

I believe if current gold and silver prices hold up, and I believe they are actually going to increase, that we are going to see a rather dramatic jump higher in the prices of select gold and silver equities on a go-forward basis.
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More: http://kingworldnews.com/kingworldn...s_Only_Happened_Twice_in_the_Last_Decade.html

 

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Hedge-fund manager David Einhorn is betting that gold-mining companies will outperform bullion, reversing the trend from the past six months.

“A substantial disconnect has developed between the price of gold and the mining companies,” Einhorn said today in a conference call discussing results at Greenlight Capital Re Ltd. (GLRE), the reinsurer where he is chairman.

The reinsurer cut holdings of the commodity in the third quarter and moved funds into the Market Vectors Gold Miners ETF, Einhorn said. The exchange-traded fund lost 5.4 percent in the six months ended yesterday, while bullion gained 11 percent.

“With gold at today’s price, the mining companies have the potential to generate double-digit free cash flow returns and offer attractive risk-adjusted returns even if gold does not advance further,” Einhorn said. “Since we believe gold will continue to rise, we expect gold stocks to do even better.”
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More: http://www.bloomberg.com/news/2011-...-beat-gold-after-substantial-disconnect-.html