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Anyone buying gold miners or just me?


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Hey all:

 

Anybody else still looking at gold miners?

 

I've made some money in this space...

 

I'm actually contemplating a new strategy....

 

I've got some miners that are paying some pretty high dividends!  They are also profitable AND are on the brink of producing substantially more gold in the upcoming years.  So the strategy is this....

 

Buy puts on GLD for 2 years.  The dividends I receive will more than pay for this, as slightly out of the money puts on GLD for 2 years are trading for a surprisingly low premium.  This will protect me from gold going down more than $65 an ounce.  So if gold goes down another $200/oz in two years, I'm covered there.

 

If gold stays the same or goes up I'm good.

 

The dividends MORE than pay for the protection for 2 years.

 

Any thoughts?

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Hey all:

 

Anybody else still looking at gold miners?

 

I've made some money in this space...

 

I'm actually contemplating a new strategy....

 

I've got some miners that are paying some pretty high dividends!  They are also profitable AND are on the brink of producing substantially more gold in the upcoming years.  So the strategy is this....

 

Buy puts on GLD for 2 years.  The dividends I receive will more than pay for this, as slightly out of the money puts on GLD for 2 years are trading for a surprisingly low premium.  This will protect me from gold going down more than $65 an ounce.  So if gold goes down another $200/oz in two years, I'm covered there.

 

If gold stays the same or goes up I'm good.

 

The dividends MORE than pay for the protection for 2 years.

 

Any thoughts?

 

I've done something similar with oil producers in the past, I think the strategy is generally sound. If you think the business would be a good one without the commodity downside exposure, then hedging it out makes sense.

 

Would you be willing to share the names you're interested in?

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