Precious Metal stocks suck but the EV PascalA list has many as high rated...why?

As a newbie I am trying to look at and understand the PascalA stock rankings but I can't figure out why it has several PM stocks at high rankings while the Gold and Silver markets and stocks are falling off a cliff! Luckily, I did not pick up any stocks or ETFs in this space or I would have taken a big hit in the portfolio...

IMHO, no matter how good one's analysis of a stock is (including using EV), single stock risk factors remain unsettlingly high for most individual investors. I have come to the conclusion that ETFs should form the base of most portfolios with individual stocks being in the minority.

I like 'em here...

[QUOTE=engr_358;24924]As a newbie I am trying to look at and understand the PascalA stock rankings but I can't figure out why it has several PM stocks at high rankings while the Gold and Silver markets and stocks are falling off a cliff! Luckily, I did not pick up any stocks or ETFs in this space or I would have taken a big hit in the portfolio...

IMHO, no matter how good one's analysis of a stock is (including using EV), single stock risk factors remain unsettlingly high for most individual investors. I have come to the conclusion that ETFs should form the base of most portfolios with individual stocks being in the minority.[/QUOTE]

It is because of how the ranking is built: if a stock is pulling back to its Lower Boundary while under accumulation, then it is a good buy candidate, but only when the market is on a buy signal. This is still the case today.

However, when a stock breaks its Lower Boundary, then its rating is getting much worse and you can see today that most of the gold/silver miners are deeper in the list, because of the LB being broken.

If you check the worst sectors list, you will see that most include commodities, including PM. However, time after time, I have stressed that when the 20DMF issues a buy signal, it is better to buy the most beaten down stocks, because they move up quicker.

Today, the 20DMF is not issuing a new buy signal, but is getting closer to issuing a short signal. Hence, in case of a short signal, the stocks in the sectors with the worst price RS will fall the most. However, the PM related sector is now oversold by a wide margin and I would not short such oversold sectors.

I would target such sectors as steel (Energy, growth dependent), defense (Budget cuts) or clothing (retail).



Pascal

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