Gold stock to sell #2: AngloGold Ashanti (AU)

Posted Sep 12th 2009 1:00PM by Jamie Dlugosch
Filed under: Stocks to Sell

AngloGold Ashanti Ltd. (NYSE: AU) is one of the largest gold mining operations in the world.

The gold cult has made this company very wealthy -- AU has a current market capitalization of more than $15 billion.

I highly doubt the jewelry market could support that valuation, but the wacko gold bugs certainly do.

The credit crisis brought sanity to AU's nosebleed valuation, but the crazies jumped on this stock this year. As a result, shares trade near late 2007 levels. Though shares traded higher in 2006, I would not want to bet on prices continuing the trend.

The V-shape recovery in AU stock does not jive with the current economic environment. A V-shape rally assumes that inflation will be roaring back to life in the very near future. That simply is not supported by the facts.

I would sell AU.

Next: Gold Stock to Sell #3

Tags: anglogold ashanti, AU, gold stocks, jamie dlugosch, stocks to sell

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Reader Comments (Page 1 of 1)

9-21-2009 @ 11:01AM

tommy said...

I believe gold at 1000.00 dollars an ounce has peaked and only will move down from here. I actually am shorting gold right now. Also just liquidated all my physical gold to an online refrinery called http://empiregoldbuyers.com . Hope this info helps someone. Thanks