• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Basic Materials

Now's the Time to Get Gold

Do not be dissuaded by today's decline. It's just another opportunity.
By JIM CRAMER
Sep 19, 2011 | 02:54 PM EDT
Stocks quotes in this article: NEM, AEM, GOLD, GG

The papers are filled with doom and gloom right now. Let's count 'em: Treasury Secretary Tim Geithner didn't seem to get much done in Europe so we have another terrible day for the Euro, worries about higher consumer prices without higher growth have people buzzing about stagflation and there's no let-up in residential housing prices in China. This is all within the last 72 hours.

Pretty grim, right?

Unless, that is, if you think about the prospects of what it might mean for gold, which, bizarrely, was down today, giving you another chance to get into the precious metal.

Why was it down? Oddly, I think it's because Europe isn't collapsing and the reports of it getting out of control are greatly exaggerated. I reiterate the faith I feel in what Tim Geithner said last week that there will be no more Lehmans. If that's the case, and the market seems to be saying it with gold not soaring, we have more ways to win than just gold.

More importantly, I want to call you attention to the strength in the individual gold shares, which I now think are ready to take off after a prolonged period of consolidation and underperformance vs. the actual metal. First, Newmont (NEM) hit a 52-week high today, in part because it is talking about a bountiful increase in its dividend as gold goes higher. The gold stocks of yore, like Homestake here, and the big South African mining companies, used to pay the highest dividends of all stocks. I think that can happen again.

Second, there's consolidation. Agnicos-Eagle (AEM) paid $255 million Canadian dollars for Grayd, a terrific miner with properties in Mexico.

Third, many companies that spent fortunes in the last years to take advantage of the higher price of gold by opening mines with alacrity are now beginning to reap the benefits of the expansion. In particular, there are two companies that must be bought for this reason, Randgold (GOLD), which has a huge expansion in Africa and Goldcorp (GG), which has spent a gigantic amount of money to develop a monster mine in Mexico that is just now beginning to pay off.

The time is ripe for gold again. Do not be dissuaded by today's decline. It's just another opportunity.

Embrace it. They don't come very often and when they do, those of you who don't own any should use the moment to start working your way toward a position in gold that is at least more than 10% of your portfolio with an optimum, in these uncertain times, of 20%, before you should feel safe in this ridiculously uncertain world, where the race to debase currencies to raise exports is at an all-time high.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, the author had no position in any of the stocks mentioned.

TAGS: Commodities | Markets | Basic Materials | Investing | Gold

More from Basic Materials

With Lithium Americas, We're Seeing a 'Trifecta of Triggers'

Timothy Collins
Feb 8, 2021 1:30 PM EST

It's hard to call a stock that doubled over the past six months oversold, but that is indeed what we see.

A 4.7% Yield With a Decade of Dividend Increases

Bob Ciura
Feb 5, 2021 2:45 PM EST

Sometimes high dividend stocks have a secure dividend with room for future dividend growth. These can be among the best opportunities for income investors.

Looking for Higher Highs After a Trex Correction

Bruce Kamich
Jan 22, 2021 12:20 PM EST

Some new accumulation (buying) around the $85 area should set the stage for further gains.

PotlachDeltic's Charts Are Strong Like the Housing Market

Bruce Kamich
Dec 30, 2020 10:45 AM EST

Here's where aggressive traders could look to go long PCH.

Iron Ore Soars, But Will the Pinch Between Supply and Demand Continue?

Maleeha Bengali
Dec 9, 2020 10:00 AM EST

For now, China's infrastructure-led stimulus efforts are helping drive demand for iron ore at a time when production is under pressure.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 10:53 AM EST GARY BERMAN

    Nasdaq Composite: Some Backing and Filling Is Here

    As today is the 4th day of the month, it seems lik...
  • 07:59 AM EST PAUL PRICE

    Fabulous News on United Natural Foods (UNFI)

    The major potential risk factor for , its contrac...
  • 08:50 AM EST PAUL PRICE

    Michaels: Close to a Deal?

    It appears that a deal could be announced soon. ...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login