Precious Metals Stocks: The Most Undervalued Asset Class

http://winteractionables.com/?p=4382

An inordinate number of articles lacking in perspective have been circulating of late about the failure of mining stocks as a precious metals investment vehicle. On Wednesday came yet another example with Paul Price’s article, “Gold Mining Shares: Less Than Glittering.” Price makes a skewed argument about the poor performance of gold stocks by selecting points of reference that begin in the confine of late stage bull markets such as 2003 and 2008, and end in the depths of bear markets.

Although mining is clearly a challenging business, bear markets are not the sole domain of this industry. For those who may have forgotten, there have been some doozy boom-bust cycles witnessed in many asset classes during the last 15 years. In the case of mining, there have been three terrific booms — and now three nasty busts — over the last 20 years. To say this is a boom-bust business is an understatement.
But rather than write post-mortem analysis articles about the most recent bust, a far better exercise is to analyse whether valuations are now conducive to creating the conditions for another bull market. The time has come to roll up our sleeves and do some real digging into what the mining industry has to offer.