A Golden Opportunity for Stock Market Investors

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A Golden Opportunity for Stock Market Investors

A Golden Opportunity for Stock Market Investors

There isnt a precious metal that has fascinated humankind more than gold. There isnt a precious metal that has infiltrated our everyday lives as much as gold has. This rich metal has made its way into our language: heart of gold, as good as gold, and all that glitters is not gold! are just a few examples. For centuries, gold has been at the heart of many societies. The Egyptians awarded the yellow metal godly powers and used the perfect shape of a circle to symbolize it in their hieroglyphic writings. To early Hindu philosophers, gold was the mineral of light, and to early Western philosophers, it was the light of the sun captured on Earth in a stone. Throughout history and in mythology, gold has not been merely a philosophical fascination; it also lured men across oceans and continents, over cold mountain ranges, and into Arctic tundra and deadly jungles. Gold has graced beautiful necks in European courts and pushed millions into slavery, wars and death. No other metal has created so much beautyand no other metal has caused so much misery. Aside from its splendor and mythical fascination, gold also has an unparalleled combination of chemical and physical properties that make it invaluable to a wide range of everyday applications essential to modern life. Thousands of everyday medical, industrial and electrical appliances require gold for optimum performance. It is virtually indestructible, completely recyclable, and immune to the effects of air, water and oxygen. The metal is benign in all natural and controlled environments. It is also among the most electrically conductive materials around. Gold is the most ductile of all metals, as it can be drawn out into extremely tiny threads without breaking. For example, a single ounce of gold can be drawn out into a thread five miles long! In addition, its malleability is unparalleled, as it can be shaped into extraordinarily thin sheets and recycled back into something completely different, without losing any of its characteristics. It is truly wondrous that an ounce of gold can be stretched into a 100-square-foot sheet! Golds wide-range applicability has made it an important sector in any countrys economy. For decades, 75% or more of the gold needed by U.S. manufacturers was imported from other countries. However, from the 1980s on, U.S. gold production rose steadilyfrom one million to more than 11 million ounces per year, mainly due to advances in mining, exploration and processing technologies. Today, the U.S. produces more gold than any other nation, except South Africa, and meets its domestic demand in addition to exporting roughly 23% of the metal. In addition, gold plays a key role in a number of rapidly developing technologies. Billions of goldcoated electrical connectors are used in the computer, telecommunications and home-appliance industries. Weather and communications satellites depend on gold-plated shields and reflective apparatuses for protection from solar heat and electrical interference while in space. Advanced laser technology used in industrial and medical applications also employs interior gold coatings to concentrate its powerful light energy. The automobile industry depends on gold-coated contacts for sensors that activate automobile air-bag systems, while modern medicine relies on gold to monitor heart functions or functions of the chemical procedures for diagnosis and treatment of cancer, viral and bacterial diseases, and allergies. Its no wonder then that gold is critical to the global economy.

A Golden Opportunity for Stock Market Investors

Gold Market Today

An investor is fortunate to experience one or two bull markets in his or her lifetime. Some bull markets last for long periods of time and many investors often enjoy the benefits of such rewarding periods, especially those who recognize the bull market early on and get on board before the stampede follows. However, bull markets in their infancy are seldom immediately recognized. Usually, both investors and market observers are too busy focusing on the fallout from the previous bearish cycle to recognize the onset of the next bullish market. As economic data start pouring in, most investors are still deciphering what came first the chicken or the egg. Considering a number of economic indicators, a new bull market has been definitely happening in the commodities markets, especially in gold and silver since 2002-2003. Most precious metal prices are consolidating right now, but our view is that gold in particular is still very much in the early stages of a long bull market. The price of gold is trading in a range and its just waiting to break out over its current level. This current bull market seems very similar to the last bull market for gold, which began in the 1970s. At the time, both physical gold and gold stocks were rallying. After the dollar was taken off the Bretton Woods system, gold and silver prices became deregulated. As a result, investors turned their focus to owning precious metals. During the first phase of the bull market in the early 1970s, the only buyers of gold were investors seeking refuge from the weak dollar, along with some industry insiders who continuously kept gold on their radar. This phase lasted until about the mid-1970s, at which point both the stock and precious metals markets went through a correction. The second phase started in 1976, when bigger players came into the game, such as high net-worth individuals and financial institutions. During that second bullish period, monetary conditions were shaping up to be to gold bullions advantage on many levels. Arthur Burns, the former chairman of the Federal Reserve Board, tried to control interest rates through credit. Burns strongly believed that the government should have the power to control the economy regardless of the external mechanisms that also must be factored in. He viewed monetary policies from a credit perspective, thinking that he could control the economy through credit markets. In addition, Burns thought that unions and monopoly pricings of large corporations caused inflation, referring to price spikes in oil and food prices. The problem was that Burns viewed inflationary spikes as one-time events that were not intertwined with a number of other factors appearing within a business cycle, and never attempted to deal with them through the policies of the central bank. Only when the new chairman, Paul Volcker, took over the reins, did inflation and interest rates become real tools of real monetary policy. Volcker was also the one who put an end to the great bull market in commodities, when he recognized that too much money and too much credit were eating away at the very foundation of the U.S. financial system. However, before Volcker took over, a number of things shaped the great bull market for commodities in the 1970s. Burns monetary and fiscal policies were primary drivers of the gold bull market. However, supply and demand fundamentals were also out of shape, therefore helping precious metals prices.
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A Golden Opportunity for Stock Market Investors History is repeating itself today. America is again having issues addressing its monetary policy, while most economists view the dollar as being weak and likely to get even weaker as a result of spiraling deficits and a slowing economy. In that sense, the price of gold is very often a result of psychological shifts. For some people, gold is a material used for making jewelry. For others, it is the worlds original currency, and thus the only real protection against inflationary pressures, financial bubbles, and even global economic meltdowns. The most fervent gold bugs run to it every time the U.S. economy teeters on its path to recovery or when foreign investors threaten to call in the U.S. massive loans. For the first time since the 1980s, the worlds economies (particularly Western economies) are growing and faltering almost in tune with one another. There are indications that this positive correlation will continue well into the next decade. Generally, this spells good news for producers of basic commodities, such as agriculture, copper and oil. Investors should remember that gold and silver were the worlds first true money and, when paper money starts depreciating, the precious metals tend to resume their historical role as currency. Freely floating currencies are by default unstable and, since there are no reassurances in tangible assets, paper money is inherently prone to losing its value. In addition, both the worlds gold and silver supplies are running out. So, those companies with large resources of both mined and in-ground precious metals will be the big winners in the commodities bull market that is shaping up before us.

The simple truth is that gold is a trustworthy and realistic investment instrument that should be in every investors portfolio.

The time seems to be right for picking precious metal stocks, as the renewed momentum of the bullish reign in commodities develops. Some observers go so far as to claim that we could expect another 10 years of a commodity price boom. The simple truth is that gold is a trustworthy and realistic investment instrument that should be in every investors portfolio. Golds traditional role as a safe haven has made it the underdog in the world markets an investment that people turn to only when the stock or bond markets arent performing well, or when monetary policies are running amok. It is high time to move gold from its apocalyptic pedestal and accept it as a credible and realistic investment vehicle. This brings us to the only gold stock that we believe you need to own for the next decade. This company is a leader in the gold industry and it is the gold investment of choice for most portfolio managers. Since the subprime mortgage crisis, this companys stock price

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Ratings Index
Speculative Buy: A buy recommendation for a stock with high investment risk. Enthusiatic Hold: Keep holding your position in this stock; company and stock prospects look great; maintain a moving stop-loss limit. Hold: Keep holding this stock; maintain a moving stop-loss limit. Sell: A recommendation to sell or take profits from a stock. Radar Screen: A recommendation to begin watching the trading action in a particular stock.

A Golden Opportunity for Stock Market Investors has done very well, carried by a strengthened balance sheet, and the company does not hedge its selling gold prices. This stock has already corrected, so now is the time to be considering a new position. This company firmly believes in its product and sees no need to hedge against the price of gold depreciating. It is growing internally and by acquisition. The company we are talking about is Goldcorp Inc. (NYSE/GG), which we believe is the only stock that you need to own for the next decadea truly golden opportunity for stock market investors. Finally, Goldcorp is one of the worlds lowest cost and fastest growing multi-million-ounce gold producers. The company has a strong and liquid balance sheet and does not hedge its gold production.

Strategy for Growth

Low-cost gold producer High-quality reserves in the Americas Gold production 100% unhedged Strong focus on organic growth Experienced operating and project development teams 2010 production estimated at 2.6 million ounces at $350.00 per ounce.

About Goldcorp
Company History
Goldcorp is one of the worlds leading gold producers. The companys main assets are comprised of 11 operations and six development projects throughout the Americas. Over 70% of Goldcorps reserves are situated in politically stable NAFTA countries. According to the company, in 2006, it doubled its reserves and resources from five million to 10 million ounces through the acquisition of assets from Placer Dome and Glamis Gold Ltd. Gold production is forecast to increase by over 50% over the next five years. The company has a solid pipeline of projects, including the 100%-owned Eleonore gold project in Quebec, Canada, and the 100%-owned Peasquito project in Zacatecas, Mexico. These two assets, along with several others, are expected to be the growth drivers for the company over the coming years.

Senior Executives
Charles Jeannes, President and CEO Lindsay Hall, Executive VP & CFO Steve Reid, Executive VP & COO

Directors
Ian Telfer Charles Jeannes John Bell Larry Bell Beverley Briscoe Peter Dey Douglas Holtby Randy Reifel Dan Rovig Kenneth Williamson

Head Office
Park Place, 666 Burrard Street, Suite 3400 Vancouver, BC, Canada V6C 2X8 Tel.: (604) 696-3000; Fax: (604) 696-3001

A Golden Opportunity for Stock Market Investors

Goldcorps Latest Results

According to Goldcorp, its gold production in the second quarter of 2010 grew to 609,500 ounces at a total cash cost of $363.00 per ounce. This compares to production of 582,400 ounces in the second quarter of 2009.

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These gold sales generated total first-quarter revenues of $844.3 million, representing a 34% increase as compared to the same quarter in 2009. Goldcorps net earnings attributable to shareholders were $828.3 million, or $1.13 per share, as compared to a loss of $231.6 million, or ($0.32) per share. Adjusted net earnings were $198.8 million, compared to $99.2 million. Operating cash flows were $382.6 million, as compared to $263.6 million.

strings attached. For example, retail mark-ups on gold coins and bars are hardly ever fair, while exchangetraded bullion, even in rising markets, doesnt appreciate in price as fast as gold stocks do. While generally favoring gold stocks, we view Goldcorp in particular as a Strong Buy, because we see this stock bringing value to your portfolio for years to come. Well go even so far as to say that this stock is the only one you will need to own for the next decade! Without a doubt, for those investors looking to hedge their portfolios with gold exposure, Goldcorp deserves to be at the top of the list.

GoldcorpA Golden Opportunity

Since the bursting of the tech bubble in March 2000, three sectors of the stock market managed to post significant gains up until the middle of 2007: bonds, real estate, and small-caps. For some reason, however, gold remained under the radar for most investors. One of the main reasons for a change in sentiment toward gold is the falling U.S. dollar. Over the years, gold has moved in the opposite direction from the dollar, mainly because it was considered the ultimate currency and the only safe haven when paper currencies have suffered. The perennial question for any gold investor is whether to buy bullion or gold stocks. We are in favor of gold stocks, because other commodity options come with

...we see this stock bringing value to your portfolio for years to come.