6/25/09

Charlie, The equation is this: Total price of all the stock shares added up/ Amount of gold in the ground. So if the total stock sells for $1 million (say 1 million shares at $1 each) and the company has 1 million ounces in the ground, that means for $1 you get one ounce of gold in the ground. Now if the price falls to 50 cents a share, then for $1, you get two ounces of gold in the ground. If the price falls to 25 cents, then for every $1, you get four ounces of gold in the ground. (There is still one share for every ounce, but the price of the shares has dropped, because in a panic, people have sold and created an opportunity for buyers.) The price to extract the gold has to do with equipment costs and gasoline costs etc, and doesn't change based on this relationship.

In the above example I am increasing the amount of gold in the ground you get as the price falls. You can also look at it in this way: As the price falls, you are paying less for the gold in the ground you are buying. For example: If at 70 cents a share you are paying $40 an ounce for gold in the ground, as the price of the shares falls, you will pay less for the gold in the ground, which stays constant or only increases as more discoveries are made. Does that make sense? If not, please send me another email. Bull

6/25/09

Jeremy,

Dow will bottom out around 3200! If you want a place to put your money, buy gold and silver and hold it ok a safe place. Mining stocks might head down again before they head up but gold has only one way to go from here, 3000-5000 an ounce most certainly. I have all my money in kimber Minefinders and physical gold and silver and the two pieces of property I own . I wouldnt put a penny into the Dow.

Remember when I told you about Apple and everyone thought they'd go out of business? Kimber is a surer thing than that. One can never time these things just right, but the ultimate outcome can be seen. In other words, it is hard or impossible to call the waves, but not so for the tide. The tide for gold is up and nothing man made can stop it now. Bull