I think the chart tells it better than I can. At different times the miners will lead or lag based on logical reasons like earnings leverage and sometimes a lead or lag will just be about emotion.
Sometimes there may visibility to this or not. I had favored the miner because I felt there was still a lot of positive emotion that might allow it to outperform the metal. After a good run of outperformance, I think the miners ( the big miners that is) might lag the metal for the time being.
As the chart shows, to the reader's question, there is a big difference between the metal and the miners. I have no idea if the tweak I did will still look right a couple of months from now but I do that gold's volatility added a lot to my return in the fourth quarter so taking a little of that volatility out (which is all this is really) feels like the correct trade.
2 comments:
Is the difference a function of risk, time frame and expenses? The "hardgold" is already out of the mines free of expenses. The "soon to be gold" is still at risk and may have rising expenses to obtain.
more about my perception of risk than anything else.
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