GSS - Sector: Basic Materials---Industry: Gold & Silver

[sebfr]

Great find...

Technically we have a gap of breakout and a white marabozu on high volume !

[Gu$tavo]

David , we have a news on this,,, If  there is something I don't like of the minning co's is there are always asking for other's people money  most of them do ,,,

Golden Star Resources Ltd.-New Issue
THURSDAY, DECEMBER 08, 2005 4:14 PM
- BusinessWire

TORONTO, Dec 08, 2005 (BUSINESS WIRE) -- Golden Star Resources Ltd. ("Golden Star") (CA:GSC) (GSS) has today entered into an agreement with a syndicate of underwriters co-led by BMO Nesbitt Burns Inc. and Blackmont Capital Inc. under which the underwriters have agreed to buy 29,200,000 Common Shares from Golden Star and sell to the public at a price of C$2.80 per Common Share, representing an aggregate amount of C$81,760,000. Golden Star has granted the Underwriters an option to purchase up to an additional 4,200,000 Common Shares, exercisable until 48 hours prior to the closing date, which is expected on or about December 30, 2005.

A preliminary short-form prospectus for the Canadian offering will be filed with the applicable Canadian securities regulatory authorities. A shelf registration statement for the U.S. offering was previously declared effective by the U.S. Securities and Exchange Commission and a preliminary prospectus supplement will be filed with the SEC

[shawFund]

AH down 5% to $2.52 with 73k shares traded due to the news - share dilution.

That is the beauty of day trading. I bought this morning and closed my position at $2.78 about the top of its range. No overnight risk.

December is only 1 week, my whole portfolio gained 6% so far and no overnight holding.

I can sleep at night. Today, NVAX gained about 10% and SVA and AOB may be bottomed (just may be, waiting for bullish signal).

[irod]

Bastards!

[puenthouse]

LOL, after my 10,000 accident, i sold for a loss and put it in here, i can not find AH loss that you are mention, but i hope this is not for real.

[irod]

I did find it.

http://www.google.com/search?sourceid=navclient&ie=UTF-8&rls=GGLD,GGLD:2005-11,GGLD:en&q=gss

After Hours ECN: 2.54 -0.12 (-4.51%)  8 Dec at 6:56PM ET

[shawFund]

Here is the table which listed the best performers in GOLD mining sector during last 4 weeks.

Amonth 61 stocks in this secotr, only 2 losses and 59 gainers. Gold is onle of the best performer among 100 sectors.

Number 1 in the sector is GBN gained 55.81%, number 2 MNG 53.03%, ...

[David Randolph]

Bad luck on GSS, right after I bought it we got news of a share placement and dilution 

Well, a speculator needs to be prepared for this. What to do now?

The offering price is C$2.80 per common share, for 29,200,000 shares. At current exchange rate, C$2.80 = $2.416. That's no good, the offering price is below the current market price.

Why should one buy at the market at an higher price if he can buy at the offering for a lower price? So probably the stock will trade lower than $2.42.

The rally of the last couple of days is quite strange, didn't smart money knew this was coming? Why the rush to buy just before such bad news? This is unusual.

Why was GSS so weak relative to its peers over the last couple of months? Because of it's hedgies in gold? Or was it that insiders knew this private placement was coming and inside information spread across well positioned people?

I really don't know what's going on ... but all this doesn't change the fact that we have higher gold prices and higher production from the company, how can they do such harm to shareholders in an environment like this?

Hell, I feel stupid if I say «sell» at the open on these negative news.

Here's what I'll do: design a trading plan that doesn't allow me to lose my shirt trading this and then follow it. I see a gap to be filed just below the offering price, between $2.37 and $2.42.

GSS can't close below $2.37 or I'll dump it, losing about 11% on this gold trade.

(Lesson to be remembered: always buy the leaders, not the laggards. They are laggards for a reason. If the reason was this private placement, there was a «sell the rumor» effect and then we'll see the buy the news after the lower open. But if this wasn't the reason for the weakness, then new lows below $2.10 are coming).

[puenthouse]

I am not here to complain, no one likes that.  BUT has this happen to you?  or was i just that unlucky to have a HUGE hits in Xing, take all my money and put it in this and 5 hours a later a 15% loss.  Im not upset, i know this is the game.  What to do when one is down from 19000 to 14000 in 2 days?  I know the answer is just brush off the knees and start again, slow and follow the plan.  Just head is to cloudy.  Dave i assume you will get out.  I figure i cant stay in and hope it goes up, it looks that it has a road down if it does not float above 2.41   

[SmartWrasse]

Regarding trading stocks in generarl, I'd say hang in there Capn'.  I have had runs of bad timing and such before, and recently with VPHM and NVAX.  I was able to recover a good bit of that lately by following the 3SoF plan in a modified way- I didn't buy all the stocks, traded a little less, and became a little more conservative.  Hope things start going your way

[Michael]

Hi David,

I missed this phenomenal gold rush (only holding Rangy.pk which has done very well but that is a another story).

I am therefore also tempted to buy gold stocks.

GSS is an excellent long-term pick. They are sitting on some very valuable assets so I am not at all concerned that they raise money to develop these properties.

My main concern however is the gold price. I believe that the gold price reflects a speculative end of year bubble. Driven by demand from jewelry and the rumors about central banks buying. It is quite normal for gold to go up at the end of the year and fall back in the start of the next year as can be seen on the chart below.

I don't believe Central Banks will buy gold at 520 and the jewelry business will obviously slow down in January (in fact already at the end of December).

I think there will be a better entry point in Gold stocks in the beginning of 2006 when Gold might be at a lower level.

In the meanwhile GSS is probably one of the best gold stock to hold. The fact that the stock price has lagged the increase in gold should protect it if gold goes back down again and the $2.42 price for the share placement should provide a nice support.

[voova99]

Michael

Are you with us on GIGM ?!


Best,
Vova

[willey]

Hi Michael,

<<My main concern however is the gold price. I believe that the gold price reflects a speculative end of year bubble. Driven by demand from jewelry and the rumors about central banks buying. It is quite normal for gold to go up at the end of the year and fall back in the start of the next year as can be seen on the chart below.>>.....This statement of yours I MUST disagree with.  While very short term the gold shares and/or gold price may fall somewhat, it won't for long.  What's not understood is the 'hidden hands' driving up the gold price EVEN with simultaneous increases in price in the dollar!  Next year, I expect $580 gold.

gold should ( in my opinion ) almost immediately go to about $546, or so!  Many will be surprised!  Then a mild correction.  The 'new' play should be palladium & SWC is the one to own 'cause it's just getting going.  Palladium & platinum are SWC's forte'.  Palladium should become a major demand item for catalytic converters ( cheaper than platinum ) & China is desparate to do air cleanup!

best to you...
willey

[Michael]

Hi Willey

This is what makes investing fun. You could be absolutely right GOLD could continue up short term and compared to earlier gold rush this one seems to be supported by fundamental supply and demand issues. I am however willing to take the chance and sit on the side line till the beginning of next year.

Here is a good article about the pricing of gold and gold stocks: http://www.resourceinvestor.com/pebble.asp?relid=15284

According to this it seems like gold stocks are pretty fair valued:

Illustrating their leverage to the gold price, our bellwether global gold index shows that year-over-year, gold stocks have improved their valuations by 51% from $163.20 per recoverable reserve ounce in December 2004 to $247.22 per reserve ounce today.

The gold price has increased 20% over the same period.

Over a longer period – since December 2002 – gold is up 42% whereas gold equities have almost doubled in value.

Global gold mining equities and gold securities are now worth nearly $160 billion, up from around a mere $30-40 billion when the gold price signaled a double-bottom in 2001.

By historic measures, gold equities are showing some overbought signals. On the basis of tonnes of gold required to buy all the world's mining stocks, you'll need well over 9,000 tonnes. That level has only been exceeded once before in November 2003 when it took 9,663 tonnes of gold priced at $398.35/oz to pay for the world's gold equities.

My bet is that speculators will take profit at the end of the year or start of next year. The price of gold is now well above any analysts forecast (see article) and some speculators are sitting on huge unrealised profits. To quote from the article:

Things that go up must come down, and it remains to be seen how strong the usual seasonal downdraught in metal prices will be as 2006 gets underway. With so much speculative involvement evident right now, any reversal would be vicious, but hardly terminal.

The long term bullish view on gold does however seems to be supported by fundamentals so I haven't bought my last gold stock yet!

Dear Vova

I am unfortunately not invested in GIGM at this point in time. This is not because I don't like what I see. I just missed the train 

I hope I will get a chance to buy a ticket for the next journey 

Mike

[David Randolph]

I am not here to complain, no one likes that.  BUT has this happen to you?  or was i just that unlucky to have a HUGE hits in Xing, take all my money and put it in this and 5 hours a later a 15% loss.  Im not upset, i know this is the game.  What to do when one is down from 19000 to 14000 in 2 days?  I know the answer is just brush off the knees and start again, slow and follow the plan.  Just head is to cloudy.  Dave i assume you will get out.  I figure i cant stay in and hope it goes up, it looks that it has a road down if it does not float above 2.41   

Dave i assume you will get out.

Why did you assume this puenthouse? I specifically wrote in the newsletter: «HOLD, unless it is set to close below $2.37».

Anyway, don't worry about losses, it's not really losing if you learn the lesson ! I think you're overweight in just 1 or 2 stocks and that explains your losses. Don't try to recover quickly, forget about it, focus on doing the right thing and on long term performance. I'll write you a private message in a moment.

Michael, I'm very glad to see you on this GSS thread. The probability of this trade going well just increased some points 

I talked about a gap between $2.37 and $2.42, and that was filled on Friday's session. Volume was so big that today I expect the stock to rebound vigorously. I'll continue with my plan of holding, unless the stock is set to close below $2.37, but I feel this trade will go well, perhaps very well, although it started badly.