A J Taylor article from kitco. , seems to be in tune with the Q1 rally and then more nasties after. My "homework" for Q1 is to understand this type of scanario better. If there is a time to see a divergence with the gold stocks this will be it. It is hard for me to see a rush into juniors straight away , I'm thinking that institutional money will flow into the majors and the juniors will be underpinned by this, ie if the HUI is rising because/inspite of the next wave down you are unlikey to see 10c again in Tyhee at the same time cash generating companies may see the best returns initially.

http://www.kitco.com/ind/Taylor/dec0...

“This phase is a gift. The eye of the hurricane storm, which is a category 5 financial storm. A second chance to raise cash at higher prices. Because, once it completes, a world rattling catastrophic plunge is coming, one that will take prices far lower than anyone - even Bears - imagine, wave (C) down. Wave (C) down could be so bad as to usher in mergers of nations, where nations become states within new larger nations. This coming political solution to wave (C)'s calamity is good reason to accumulate Gold.”

The important thing to realize is that in this environment, because the cost of production is in decline, gold mining profits margins are improving. Now that we are at the start of this deflationary trend, we think there are several emerging gold mining companies that should do very well for their investors even as the general equity markets are in a longer term decline. Such was the case in the 1930s when Homestake Mining rose by over 600% even as though the Dow had lost nearly 90% at one point in time