Why Short A Miner?

NEM 10.30.09A buddy of mine said “They’re a gold miner!  How can you short a gold miner in a down market!  Gold’s going to skyrocket on fear.”  I can certainly understand his point of view a few months ago however in my mind, things have changed.  We’re no longer in fear of skyrocketing inflation; at least not yet.  That inflation trade of *going into gold* is off the table; for now.  Secondly, a flight into gold as a fear trade does not necessarily translate into the companies that dig it up.   The raw material could appreciate, but in an extended market with companies having rallied up to 60% and during a market correction, miners can feel the pinch as much as any other while investors flee to less risky assets such as Bonds.   Lastly, I’m a chartist.  I look at this chart with accumulation obviously dropping and sure, I’m looking for some downside here; not a *buy the dip* stock at this point in time [imho].

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