Mornin stateside:

I think your observation is valid, but I have to disagree with the overall conclusion. If we assume that people invest in stocks to make their investment grow they should naturally go to the best fundamental value. We hear repeatedly that gold has out performed most investments. Since October 27 2008 the HUI has moved from 151 to 522 as of yesterday’s close and the XAU has gone from 66 to 206 in the same period. So the big index miners have mirrored the increase of the metals. This is without any respect for the leverage that miners have to the price of the product. The junior pm miners, as a group, have done worse than the majors but better than ECU as evidenced by the MJGI increasing over 100% in the same period with numerous examples of juniors quadrupling or better. ECU has increased during that period from $.46 to the Friday $.70 close, for about a 50% rise. A significant number of juniors are up multiple times what ECU has risen.

During this period ECU has vastly increased their financial position, increased their cash flow, increased their reserves, purchased milling capacity and increased their scope of mining. In short ECU has vastly increased its value as a company and extricated itself from the weight of preditory finanancing. Yet, ECU is demonstrably underperforming its peers.

The PM shares including major’s down to the micro-caps are a trivial fraction of the total value of the stock exchanges. There are many companies who’s market cap alone is greater than that of the XAU, HUI, and MJGI combined. It would only take a very small % (less than 0.1 % ) of US and Canadian investors, without ANY participation from over seas investors, to move the gold and silver miners significantly. I believe it is the current group of power players; big banks and government economic “planners” that are keeping the mining sector down. We can see the obvious symptoms:
- constant braying by MSM that gold is in a bubble.
- refusal of MSM to cover the sector.
- strategic shorting of juniors (especially ECU).
- funding sources imposing very onerous terms for juniors.
- rules that keep major funds from investing in small cap stocks.
- large funds who’s management will not take any risk regardless of the potential rewards (with two exceptions that happen to be doing very well. E.g. TGLDX is up over 300% during the 10/08 to 10/10 period.

I believe it is not lack of available funds, as it would take such a small % of currently available funds to cause the sector to sky rocket. It is the same group of power cretins that have harassed the sector for over a decade. The same folks that preach a strong $ and want to trash gold, do not want ANY excitement in ANY investment that would indicate problems with the $. It is these cretins that keep the regulatory agencies from doing their advertised jobs. The same folks that shape the financial news and financial commentary. (Think CNBS and MSNBS.) are the ones that will fight to keep our sector down as long as possible. The entire sector will some day explode as the pressure continues to build by the increasing gap between price and value.

Just the opinion of a stubborn share holder with a lot of patience and a lot of frustration with the current gang of crooked pwoer mongers.