FSN Metals Update with John Doody

John Doody brings a unique perspective to gold stock analysis. With a BA in Economics from Columbia, an MBA in Finance from Boston University, where he also did his PhD-Economics course work, Doody has no formal "rock" studies beyond "Introductory Geology" at Columbia, taught by the University's School of Mines. An Economics Professor for almost two decades, Doody became interested in gold due to an innate distrust of politicians. In order to serve those that elected them, politicians always try to get nine slices out of an eight slice pizza. How do they do this? They debase the currency via inflationary economic policies. As Doody initially studied gold stocks, he had a hard time deciding which to buy... their share prices, market capitalizations, production and reserve levels were all different, yet each made exactly the same product: Gold.

To solve the dilemma and determine which gold stocks represent the best value at a point in time, Doody popularized a metric called Market Cap per ounce; a company's stock market capitalization (number of shares times stock price) is divided by the ounces Produced per year, or its ounces of Proven and Probable Reserves. This puts all the miners on the same basis, so when buying you know how much you are paying for each ounce production and each ounce of reserves. The Market Cap/oz values are wide-ranging… sometimes justified and sometimes not, meaning Mr Market is inefficient and does not always price a stock correctly… and this creates many of the opportunities identified in Gold Stock Analyst.

Today on Financial Sense Newshour's metals update, John Doody talks with Jim Puplava about why gold will continue to climb, and why gold stocks represent a better value.