keep going higher

Among the 42 companies in the fund's portfolio are six real standouts in year-to-date performance. Canadian miner San Gold (SGR.Canada), which is looking for the precious metal in the Rice Lake region of Manitoba, returned 136.7%. Osisko Mining (OSK.Canada) is developing a gold deposit in northeastern Québec, and is up 89.8%. Vancouver-based Minefinders (MFN), which is producing gold in Mexico, has jumped 68.9%. Toronto's Iamgold (IAG), which has a number of gold properties in Africa, has gained 90.2%. Impala Platinum (IMP.South Africa) of Johannesburg, which produces platinum in southern Africa, has risen 51.1%. Then there is Randgold Resources(GOLD) with a number of properties in Mali and other spots in Africa; its shares are up 36.3%. "Unlike last year, when rising production costs for things like oil, steel, chemicals and labor squeezed profit margins, [those costs] have been declining this year, while gold prices, which were weak in 2008, have been rising in 2009," Johnson says. "As a result, gold margins are getting quite wide, and that should drive prices higher for mining stocks."

It's funny to think of stocks as an inflation hedge because they've always been victims of inflation. But the brutal competition that once typified the minerals industries and the scarcity of plays against them has caused a shortage and short squeeze of amazing proportions as we span the globe looking for inflation plays. Hence Randgold, a previously untouchable African gold play.

Q: Right now, you see more value in gold miners versus gold exposure via the GLD exchange-traded fund. Do any come to mind?

A: One is Randgold Resources [GOLD], a mid-tier gold producer focused on West Africa. The company is headed by D. Mark Bristow, a geologist who knows African geology and politics. They have developed two major mines in Mali, and have two more exciting development projects in the pipeline. What sets them apart from their peers is their uncanny ability to grow organically and to find gold deposits through exploration and drilling, rather than overpaying for somebody else's discovery. The stock trades at $670 per ounce of reserves, roughly a 25% discount to gold.

#3:Randgold Resources: The price action above the downward sloping trendline since mid Dec '08 is a positive sign. Add to positions within consolidation.

Inflation/Recession

Safe

Randgold Resources (GOLD) upgraded by HSBC Securities from neutral to overweight.

It worked on pappermoney

Randgold CEO: Gold to Top $1,200 in 2008
Randgold Resources CEO Mark Bristow gives Simon Constable the scoop on the mining business, plus what's in store for the firm.

Click here to watch the video.

overrated!!!!!

Silly name