First the disclaimer: I have tried my best to keep subscribers abreast of the risks for the last half a year or so. HUI is now 240 points lower than when risk mode was entered. I am making no recommendations with this post because even if the gold sector bottoms, it is unlikely that steadfast risk managers would sit and watch the index make up much more than a 1/10th of those 240 points on a hard bullish reversal. In other words, risk management has been by far the way to go even if ‘the’ bottom is missed.
That said, I have indeed bought PVG this morning, am watching the ‘below cash value’ sale in AKG and AAU approaching support at around a buck a share. There are several others out there in the senior, junior and explorer patch. Sector players should have their eyes on quality if looking to buy. The macro atmosphere holds the potential and indeed the probability to exterminate the garbage miners and owners of barren holes in the ground.
In short, I am entering the mode where the market seems to be telling me to buy values and worry less about the price destruction in the sector. That said, you know my view on cash. Barring any sort of bullish reversal I am going to look at this as yet another foray into the sector to try to pick up quality at hysterical value and thus, cash will remain at extremely high levels as long as the price destruction persists.