Friday File: Gold, Shop and China

More Chatter for the Irregulars

By Travis Johnson, Stock Gumshoe, October 20, 2017

So… what’s going on this week? The world watched Congress actually pass something last night, on the 30th anniversary of the 1987 stock market crash (they passed their spending framework bill for 2018, which is importantly mostly because it sets the stage for tax reform legislation to proceed in the coming months), so that made everyone feel pretty good this morning… it’s encouraging for investors to see that there’s a majority vote in Congress for something.

But was that enough to settle down the heartburn brought by the memory of that crash and the constant crash discussion in the financial press? Or enough to settle everyone’s worries about China’s slightly disappointing GDP growth? (Or the warning from the Peoples Bank of China that crashes are more dramatic following bubbles? Next update: if you throw a rock in the air, it might fall on your head!)

I don’t know… but so far, sure, the market is pretty happy — the S&P, as I type around midday on Friday, is still up a bit on the week (and gold is still down about 1.5% on the week, which may be an indicator that fears of inflation and crisis are lower… or, at least, that the dollar has strengthened slightly from recent lows). And Kim Jong Un and President Trump are continuing their war of words, but that doesn’t seem to make the market all that nervous anymore.

Any news on the stocks in the Real Money Portfolio? I thought I’d keep it pretty brief this week, but I want to answer some reader questions about two gold stocks that are performing poorly, USAU and TREK.V, and then I’ll wrap things up with a little China speculation update… let’s get right to it:

U.S. Gold Corp (USAU) stock is down sharply this year, perhaps because of a lack of understanding about where the company is in its development.  This is a gold explorer, led by an experienced geologist who has found huge gold deposits before in formations that are similar to U.S. Gold’s Keystone property in Nevada, but they haven’t found anything material yet in their short existence — or in miner parlance, they haven’t yet made a discovery.

That was the case earlier this year when the company was really formed, and it’s the case today, and it could easily still be the case in six months — if there is a ...

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