Agnico-Eagle avoids forward sales


10:50p EST Thursday, December 16, 1999

Dear Friend of GATA and Gold:

Here are a couple of comments from GATA subscribers
that may be of interest.

The first, from Frank, makes a point I've made often in
individual posts at various gold-related bulletin boards. It
bears repeating.

That is, GATA (as distinguished from GATA Chairman
Bill Murphy's financial commentaries written for his
subscribers at his Internet site) is not much of an
investment adviser. We post all sorts of things that
may be of interest to our subscribers, including,
sometimes, things that contain investment
recommendations. But since our charter is to advocate
the gold cause -- that is, the restoration of a free
market in gold and restoration of gold's traditional
international monetary function as a competitive form
of money and the measure of national currencies -- we
always "get emotional about stock," which is exactly
what successful investors shouldn't do. We'd like to be
right and rich rather than right and poor, but we think
that being right is important in itself.

The second post, from Mark, comments on Barrick Gold's
recent insult to Arthur Hailey.

Gold Anti-Trust Action Committee Inc.

* * *

From Frank....

One word ("cause") in your introduction to a recent
post stands out as an explanation for some of the
hostile articles about the gold phenomena. All too
frequently causes are followed by the herds armed with
part-truths and trying to place the blame anywhere but
on themselves -- and, at times, trying to trample the
rights of others as long as it doesn't affect
themselves. Their advice to Barrick Gold is almost like
telling farmers to stop selling their crops so prices
can rise, or not to hedge their grains at a higher

The futures market and most derivatives were created to
provide liquidity and enable hedging by the commercials
(producers, users), permitting them to buy and sell at
prices that allows their businesses to survive volatile
markets. There's nothing illegal or immoral about it.
The markets are open to all willing (qualified)
players. This includes you, me, farmers, refineries,
and even banks and mining companies. Of course there
are risks; if one can't tolerate potential losses,
there are other markets.

When making an investment, there is generally some
motivating factor that brings us to make the decision.
The very sad truth is that many people are motivated by
the hype of articulate salespersons, the press, and
other advisers who tend to shout "buy!" near rally tops
and "short!" near correction bottoms. The hype is so
compelling that the "believers" feel a "can't-lose"
mentality. And when they do lose, they strike out to
blame anyone but themselves.

No one forces us to take losing positions. Just think
what a profitable position we'd be in if we were
unemotional about gold and took short positions near
the top. All of us could have done that. We still can
do it. But as with most activities we must learn the
technicalities. Unfortunately, it's much easier to be a
herd member than to do the required due diligence.

To blame others for our own mistakes is folly. I don't
have any love for Barrick or bankers, but they're not
in business to be loved. If they want to hedge, that's
their right. Their duty is to their shareholders, not
to the losers of the world.

It's helpful to always remember:

1) All investments (gambles) have a winner and a loser.
If one is on the losing side, it's time to re-evaluate
one's selection process.

2) If advisers had any great system for picking
winners, they wouldn't have to sell newsletters,
options, coins, causes, whatever. The winners don't
divulge their winning systems.

3) When we read some hostile article, we should inquire
about the expertise of the writer. Because one is a
successful novelist doesn't necessarily give him any
credentials as an economist, etc. It's a bit like going
to a barber for eyeglasses. Even if qualified, is the
writer telling only part-truths?

4) If our record is very poor for investments in, say,
bananas, maybe we should switch to sugar. When you can
cover up the name of the investment and just analyze it
on its own merits, you dump the emotional factors.

Every now and then I go to my "morgue" files and read
some of the past "investment predictions" by the big-
name gurus. It's amazing how wrong they have been, yet
we hear only about their successes (if any). No wonder
there have been so many losers in gold investments.

Yet nowhere is there any rage or cause against these
gurus. If such gurus are so wrong much of the time,
think of all the terrible info from the "unmarried"
marriage counselors out there acting as if they know
what it's all about. Coin flipping would be a far
better method than taking most advice.

The real "money" world involves the whole gamut of
professionals, politicians, producers, users,
speculators, gamblers, and many varieties of hustlers.
It takes money, guts, training, and experience ...
without emotion. Falling in love with gold, beans, or
the Swiss franc is no better than falling in love with
the peso, the dollar, or bananas. If loving gold
produced profits, we'd all be rich.

* * *

And from Mark....

Regarding Barrick Gold's insulting response to Arthur

The gold crusaders are getting some ink! I'm reminded
of what David Horowitz quoted Lenin as saying about a
debate: "We don't debate our opponents. We smash their
faces in!"