Agnico Eagle Gold Mines Ltd: The Bet!
Wednesday, August 9, 2006 at 11:03AM
Gold Prices in Gold Mining Companies
While helicopter Ben groomed himself for stardom we had a small wager on an upward move for Agnico Eagle based on a rate freeze.

The rational being that the rates would not be changed, the dollar would weaken, gold would rise and Agnico Eagle would rise with it. As we said in yesterdays article, any vehicle could have been chosen and some would have generated more cash than others. However, in the event of getting it wrong we would be left holding Agnico’s stock, which is just fine and dandy with us. We are of the opinion that this stock represents terrific value at the moment so for us there is downside.

However, the objective was to win and make a few bucks in what has become the doldrums for trading every single month. And you know our feelings on this issue.

Back to bet. We bought yesterday for $36.94. We then watched the price disintegrate as gold prices weakened. At times like this you tend to think that Day Trading is not for us, but we like the stock and did not take a large position.

All we can do is wait and do some research on other mining investments that might be worthy of our future investments. We do have a large watch list we is constantly under scrutiny and re-evaluation. When we think that we have a winner we will most certainly publish it on this site.

The news comes through that the rate will remain unchanged, the first time for numerous months although it was not that hard to predict. The next day gold starts on the path north and Agnico Eagle which was a lot less that we paid for it starts its recovery;

GO Eagle GO!

Eagle moves up and we are now at break-even point, phew! This stock keeps on rising to $37.32, a rise of $0.38, be patient! Something we need to practice. The rise continues and shows a gain of about $0.47, yippee, however gold bangs its head on the $650 ceiling, meets resistance and starts to fall. The stock drops with it, we decide to sell at $37.28, may be too early but with a little profit of $0.34.

So we made a few bucks and had a little excitement in the doldrums to boot. No doubt there are better ways to do this, but, for us this move had no downside and as Warren Buffett once said, “the most important thing in investment is not to lose money”

So back to the big picture, hope you enjoyed the ride.

09 August 2006
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