Einhorn and other hedge fund stars such as John Paulson and George Soros have been burned by the underperformance of gold miners, The Wall Street Journal reported Wednesday.
“Investors have worried that mining costs are rising, and that governments around the world are becoming more aggressive in taxing resources companies,” the newspaper reported. “They’re also concerned that gold miners might squander any windfall with ill-conceived acquisitions or other moves.”
The small-cap Market Vectors Junior Gold Miners ETF is down about 40% this year.
Yet investors upbeat on the sector note that gold-mining companies are “seeing improving revenues, and that shares are more attractive relative to gold prices, making them bargains that investors eventually will recognize,” according to the WSJ story.
Market Vectors Gold Miners
Full disclosure: Tom Lydon’s clients own GLD.