Gold versus gold mining stocks

GLD is a trust that owns physical gold.
GDX is an ETF index of gold mining stocks.

As you can see from the chart below, GLD has clearly been the better performer since the inception of GDX.  (GDX would perform better if dividends were taken into account.  However, it still wouldn’t make a difference.)

In my opinion, gold miners have spent way too much effort on mining the capital markets (e.g. you, me, your pension, etc.) and on chasing projects with terrible returns.

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Osisko (TSE:OSK) – Yet another promotional gold miner

Originally, I was interested in Osisko since it has dropped by three quarters since 2011 and it seemed cheap.  However, the company consistently uses aggressive accounting so it’s not as cheap as it seems.  Overall, Osisko is hard for me to evaluate since (1) I don’t trust the promotional management and (2) there isn’t enough information being disclosed.  I also prefer to invest in management teams that are really good at generating value.