Gold Miners Not Making It Easy on Investors

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By Eric McWhinnie | November 5, 2013 5:28 AM EST

Wall St. Cheat Sheet

Hedge fund manager Hugh Hendry once said: “There’s no rationale for owning a gold mining equity. It’s as close as you get to insanity. The risk premium goes up as the gold price goes up. There is no valuation argument that protects you against the risk of confiscation.” While most investors have yet to face confiscation, it has been a brutal year for shareholders.

The world’s largest gold producer recently reminded investors just how much can go wrong in the mining industry. Barrick Gold (

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Disclosure: Long EXK, AG, HL, PHYS

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The article was first published by Wall St. Cheat Sheet and does not represent the views or opinions of International Business Times.

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