John Doody brings a unique perspective to gold stock analysis. With a BA in Economics from Columbia, an MBA in Finance from Boston University, where he also did his PhD-Economics course work, Doody has no formal “rock” studies beyond “Introductory Geology” at Columbia, taught by the University’s School of Mines.
An Economics Professor for almost two decades, Doody became interested in gold due to an innate distrust of politicians and concern over their habit of debasing the currency via inflationary economic policies.
As Doody initially studied gold stocks, he had a hard time deciding which to buy. Their share prices, market capitalizations, production and reserve levels were all different, yet each made exactly the same product: Gold.
To solve the dilemma and determine which gold stocks represent the best value at a point in time, Doody popularized a metric called Market Cap per ounce; a company’s stock market capitalization (number of shares times stock price) is divided by the ounces produced per year, or its ounces of proven and probable reserves. This puts all the miners on the same basis, so when buying you know how much you are paying for each ounce of production and each ounce of reserves. The Market Cap/oz values are wide-ranging… sometimes justified and sometimes not. This simply means that “Mr. Market” is inefficient and does not always price a stock correctly, which creates many of the opportunities identified in the GSA newsletters.
A result of this Market Cap metric, Doody’s newsletters cover only producers or near-producers that have an independent feasibility study validating its reserves are economic to produce. Success with this method of finding undervalued gold mining stocks led Doody to leave teaching and start Gold Stock Analyst late in 1994 to make his research available to everyone. The results to date have been spectacular: through 2012, the GSA Top 10 Stocks portfolio has a cumulative gain of over 1,200%, and an average annual gain of over 35% per year.