Newmont Mining (NEM), the world's #2 gold producer, stumbled 6% Wednesday after giving a poor forecast. Meanwhile, the commodity gold -- playable through exchange traded funds -- continues to hover at a 27-year high. When playing broad market forces such as global demand for metals, is it better to play through ETFs?
Karen Finerman explains that Newmont surprised The Street Wednesday when they revealed production costs are higher than anticipated and the company doesn’t have as much reserves as they thought they had. That’s two very big pieces of bad news, Karen says.
Consequently, she tells investors if you want to make a gold bet and mitigate “unqiue risk” (outside factors that could drag a stock lower) go into the ETF because you get the general movement of the commodity.
On a related ETF note, Pete Najarian likes iShares MSCI Singapore Index (EWS) as a way to play Singapore yet mitigate "unique risk."
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Trader disclosure: On Sept. 25, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Macke Owns (DIS), (EMC), (ATVI); Najarian Owns (CBAK), (UA), Najarian Owns (DGX); Najarian Owns (GS) Options; Finerman Owns (GS); Finerman's Firm And Finerman Own (TEL); Finerman's Firm Owns (NMX), (NYX), (KFT), (BEAS); Finerman's Firm Is Long (GCO) Calls; Finerman's Firm Owns (MSFT) Options; Finerman's Firm Owns S&P 500 Puts; Finerman's Firm Owns Russell 2000 Puts; NBC Universal Is The Parent Company Of CNBC