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Feb 2011 - The Fuzzy Clock

The Clock's Fuzzy!

The latest update on the lion “clock” by the Lion Selection group release on the 28 February 2011, has it about half-way through a possibly shorter cycle this time. The clock used to work quite well – at least for two 10-year cycles to 1997 and 2008, but appears to have become ”Fuzzy” as illustrated by the numerous IPOs and exploration occurring before, during and after the mergers, not after as shown in Figure 1.

Also the mergers have not simply been for cash. Independence’s acquisition of Jabiru (being nickel for zinc) is using paper, as was Kingsgate’s for Dominion, as have some of the larger international resource company acquisitions. And to add further complication, some Australian companies are not following the North American preference of sticking to one commodity, as shown by Independence moving into zinc, and Panoramic moving into gold at Gidgee.

Throw in a major slab of uncertainty as to what is going on in North Africa from Egypt to Libya and what it may mean for the future and you have the current (1 March 2011) situation of a strong gold price and relatively weak gold shares.

So according to the clock, is it a boom or not? The market does not appear to be behaving as if it is a boom, if anything the clock has become fuzzy.

Disclosure and Disclaimer : This article has been written by Keith Goode, the Managing Director of Eagle Research Advisory Pty Ltd, (an independent research company) who is a Financial Services Representative with Taylor Collison Ltd, and with his associates, may hold interests in some of the stocks mentioned in this article. The opinions expressed in this article should not be taken as investment advice, but are based on observations by the author. The author does not warrant the accuracy or completeness of any information and is not liable for any loss or damage suffered through any reliance on its contents.

Figure 1. The Lion Selection Group ClockGDNfeb2011

  • Written by: Keith Goode
  • Tuesday, 01 February 2011