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rgutsell2

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  1. Hi and thanks for this contribution. I too have been frustrated by the lack of movement (upwards, that is!) in the junior companies. I do not have the technical expertise shown in the first article, but I have had this thought. People are rushing to gold in a reactive way; that is, they want reassurrance and security in the face of the recent market turmoil. What people want is something reliable; i.e actual gold. Something they can touch and see, and isn't as ephemeral as share's or their sp's. The problem with the junior companies, is that they often aren't usually producing...just hoping too. They are betting on the future remaining good for gold, at precisely the time when betting on the future in the form of shares etc has apparently failed. So why would an investor, who is running from other shares, buy into these risks? I believe that the gist of the original article in this series is correct, in that money will flow into the junior's when the investing population has got used to a new market outlook (probably bearish) and they feel secure that an investment in junior gold outfits will be sustainable over a longer period of time. If the market settles, and shuffles sideways or even recovers, this reactive pressure will fall away. Another concern I have is this; in the same way that funds were innappropriately directed into the high risk mortgage lending market on the back of an over optimistic view, so funds could be committed to the junior gold companies, without rigorous research, in the more optimistic outlook for gold that exists now. A lot of small mines, and outfits, that were previously unprofitable, suddenly seem attractive. Just how solid are these small junior companies? For interested, but inexpert guys like me, it is hard to tell, and they remain a high risk. Good fun though! Gutsache.
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