Hubsters:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/9/15_Special_John_Hathaway_Report_-_Gold%2C_Opportunity_of_a_Lifetime.html

I've always wondered about the pros and cons between bullion and gold stocks and the future of gold period. If you've wondered then above is a link to a John Hathaway special report that you may want to dig into. I copied a couple very interesting sections (below) that pertain to our SLI situation. IMO I think we are still in the first 'Sweet Spot' on the Life Cycle chart below. Thisl article might be Link Library worthy.

Rawkstar

(excerpts)

The Case for Gold Stocks

Gold bullion and gold stocks are completely different, similar only in their attraction to investors who distrust paper currencies. Gold is inert. Gold stocks are claims on the enterprise of finding and extracting gold from the core of this planet. Think of them as long term, deep in the money, long duration income producing options on the gold price. Perhaps their suitability is limited to a range of investors narrower than bullion itself. However, for that narrower slice of the investment universe seeking a more dynamic exposure to currency debasement than the metal itself can provide, they are the only game in town.

In terms of potential return, gold stocks have inherent advantages over the metal itself: income, growth, and takeover potential. These three possible sources of return are beyond the scope of physical gold. As obvious as these attributes may seem, they have been periodically over looked. One possible reason is that the bid for gold is global. It emanates from China, India, South East Asia, and other diverse global locations where gold mining stocks are all but unknown. Aside from speculators in Western capital markets, gold is purchased not for its return potential but rather for its traditional attributes as a safe haven and a store of value. The demand for gold stocks comes mainly from a much narrower base of investors. In the primal scramble for safety, the nuanced advantages of gold mining equities have been heavily discounted. To our thinking, the discount is sufficiently excessive to spell extraordinary opportunity.

Conclusion

Gold mining stocks provide dynamic exposure to rising metal prices, but frequently with a lag. If one believes that the current gold price is sustainable, the historically high discount between the shares and the metal represents a compelling opportunity. The industry, once marginal, is now on solid footing with durable free cash flow. With more enlightened management, decisions on the deployment of free cash ought to result in substantial dividend increases. Mainstream investors agnostic on the prospects for monetary debasement may well come to regard gold stocks as generic yield plays. Quoting Jim Sinclair: “gold stocks are the utilities of the future.”

Still ahead is the possibility that gold will be reintegrated into the international monetary system. Should desperate governments grasp at this straw, they will have to fix the price of gold at a level sufficiently high for investors to prefer government paper to the metal. While it is hard to imagine a repeat of the Roosevelt administration’s confiscation of gold from U.S. citizens on a global scale, it is worth recalling that gold mining stocks benefitted while those who dutifully turned in their coins and bullion did not: