Investment Contrarians

Newmont

Founded in 1921 and located near Denver, Colorado, Newmont Mining Corporation (NYSE/NEM) is one of the world’s largest gold mining and producing companies with operations in the United States, Australia, Peru, Indonesia, Ghana, Canada, New Zealand, and Mexico. The company employs 34,000 people. Newmont is included in the S&P 500 Index. In 2007, Newmont became the first gold company selected to be part of the Dow Jones Sustainability World Index.


Why You Need to Be Looking at Mining Stocks

By for Investment Contrarians | Oct 11, 2012

Barrick GoldGold and silver continue to be bullish on the charts. I can see gold breaking to $1,800 an ounce, something that nearly materialized on October 5, when cash gold traded at $1,795.78 prior to slipping. The last time gold was above $1,800 was on November 8, 2011.

Silver is holding around $34.00 an ounce; but I’m not as bullish on the white metal, because the price is largely driven by the direction of the global economy.

I continue to like gold going forward, given the financial crisis in the eurozone—and, trust me, it is not going to get better anytime soon. It could take years. Moreover, with a recession expected to hit the eurozone in 2013, the crisis could deepen further.

Across the Pacific, you have the stalling in China and its impact on the other Asian countries, like South Korea and Japan, along with the smaller emerging Asian countries.

For those of you who took my advice to hold on and accumulate gold on weakness down to $1,600, it has been a nice ride. Major price weakness should be viewed as an opportunity to accumulate.

I favor the metal plays and continue to see opportunities, especially in the mining companies and junior gold miners.

China and India continue to be the world’s top buyers of gold, and this is expected to continue. China has also been buying mining companies around the world in an effort to increase its reserves. This is a reason why I like some of the smaller mining companies, especially those with a massive reserve of proven metals in the ground, waiting to be developed and … Read More


Why Mining’s Still a Great Place to Make Money

By for Investment Contrarians | Aug 23, 2012

Why Minings Still a Great Place to Make MoneyGold has shown some good support and buying after previously declining to below $1,525 an ounce. The metal has rallied above $1,600 and is currently showing some promise, being on the verge of a possible breakout towards $1,700.

I continue to like gold going forward, given the massive financial distress and possible exit of Greece from the eurozone, despite recent statements from the European Central Bank and its desire to keep the eurozone intact. And then there is Spain and the other five eurozone countries currently in a recession.

Even if the yellow metal fails to hold at $1,600, I do not feel it is time to dump gold stocks and believe major price weakness should be viewed as an opportunity to accumulate.

I favor metal plays and continue to see opportunities, especially in the mining companies and junior gold miners. You want to ignore the daily fluctuation in gold, silver, and copper prices, understanding that these mining companies will continue to mine.

China and India continue to be the world’s top buyers of gold and this is expected to continue. China has also been buying mining companies around the world in an effort to increase its reserves. This is a reason why I like some of the smaller mining companies, especially those with a massive reserve of proven metals in the ground waiting to be developed and needing a cash-rich partner to get the ore out of the ground.

You can buy the major gold players, such as Freeport-McMoRan Copper & Gold Inc. (NYSE/FCX), Barrick Gold Corporation (NYSE/ABX), or Newmont Mining Corporation (NYSE/NEM), but for the real big gains, … Read More


China Wants Your Resources

By for Investment Contrarians | Aug 16, 2012

China Wants Your ResourcesMoney is flowing out of China, according to the People’s Bank of China, which, in a report, indicated that banks in China were net sellers of 3.8 billion yuan, equal to US$597 million, in July. The significance of this is that the data suggest China’s exporters and investors may be exiting the yuan; whereas, Chinese banks have been net purchasers of yuan in the past years.

The news indicates China may face hurdles trying to pump up the economy, given that with the outflow of capital, the country will need to ramp up its government spending.

Yet, instead of following the capital flow and in spite of the fact the country is slowing, China remains a resource-hungry country that’s hunting the world for resources to help fuel its expected GDP growth in the decades ahead.

For this to happen, ample raw materials are needed.

In the oil patch, Chinese energy firms made about $48.0 billion in acquisitions in North America in 2009 and 2010, according to the International Energy Agency. China is investing in the oil-rich Canadian tar sands, and I expect to see more Chinese capital flowing in.

In July, CNOOC Limited (NYSE/CEO), one of the three major state-owned oil stocks in China, announced it would acquire Canada-based Nexen Inc. (NYSE/NXY) for $15.1 billion in cash or $27.50 per share, representing a whopping 60% above the close of July 20. I believe the deal may not be accepted by the Canadian regulators, who in the past axed deals from China when pressured by the country’s conservative government. In 2005, CNOOC attempted to buy U.S. oil play Unocal, but the … Read More


Newmont—a Widow Stock for Gold Investors

By for Investment Contrarians | Aug 13, 2012

Newmont a Widow Stock for Gold InvestorsSince the bursting of the tech bubble in March 2000 and before the recent financial and credit crises struck, at least three sectors have managed to post significant gains: bonds, real estate, and small-caps. For some reason, however, gold remained under the radar for most investors. Yet, since the stock market peak, prices have climbed past many psychological marks. The shares of companies that mine the metal have gone along for the ride.

The perennial question for any gold investor is whether to buy bullion or gold mining stocks. I favor gold stocks over the higher risk of other commodity options.

While favoring gold stocks, I view Newmont Mining Corporation (NYSE/NEM), in particular, as one of the best stocks in gold, because I believe this stock will add value to your portfolio for years to come.

I’ll go even so far as to say that this stock is the only one you will need to own for the next decade, with its good price appreciation potential and dividend.

Without a doubt, for those investors looking to hedge their portfolios with gold exposure, Newmont Mining deserves to be at the top of the list. This company stands out among other players for two reasons: 1) size; and 2) low production costs.

Over the years, Newmont has grown rapidly through mergers and acquisitions, as well as the development of its existing reserves. This strategy resulted in the company’s diversified risks; namely, unlike junior producers, Newmont doesn’t depend on one or two of its mines for its future, and it is certainly not exposed to politically unstable regions.

In that regard, the risk … Read More