The Globe and Mail reports in its Saturday edition that generalist investors are largely shunning gold stocks, despite the brisk run-up in the price of gold bullion. The Globe's Niall McGee writes that since 2011, when the price of bullion went into a multiyear tailspin, generalists -- or sector-agnostic investors -- have mostly abandoned gold stocks. Even as the price of gold has climbed from $1,050 an ounce in late 2015, to roughly $1,580 currently, investors have mostly stayed away. While gold bullion is only about 17 per cent below its $1,900 an ounce peak in 2011, gold stocks are trading nowhere near their highs. Generalist aversion is a big problem for an industry that is so capital intensive. At a recent mining conference, David Smith, chief financial officer of Agnico Eagle Mines, said that while an extended multiyear bull run in gold would certainly help bring generalists back, companies themselves have to "behave a lot better." In the mid- to late-2000s, many companies, from Barrick to Goldcorp to Kinross, made disastrous investment decisions. Those moves included overpaying for acquisitions, or forging ahead on marginal development projects -- destroying tens of billions of value along the way.
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