Gold: The Most Hated Asset Class?

A gold mine is a hole in the ground with a liar on top–Mark Twain

The above chart illustrates how historically cheap gold mining equities are to gold. Not since the Great Depression and Pearl Harbor have equities been so cheap on market cap to production, reserves and cash costs. See the XAU (Index of gold and silver miners) below as a percentage of the gold price–currently below the Great Recession lows of 2008:

For about six years, equities have under-performed due to poor management, rising input costs, dilution, and growth for growth’s sake. That’s the bad news....