Almost 10% of the 2,200 companies on the ASX are primarily gold companies. Gold is the fourth largest Australian goods export, after iron ore, coal, and natural gas. The gold ecosystem is a stock-picker’s paradise: volatile, not well researched, and inefficiencies abound. Most of the companies are too small to attract substantial analysis. Gold stocks have been reviled for the last few years. However with the gold price rise in early 2016, which probably saw off the bottom in the gold price, the gold stocks are merely deeply unpopular. When money moves into the gold sector it generally starts at the top (Newcrest, $15b) then cascades down to the smaller and riskier stocks, as the initial stocks get bid up, and later investors look further down the risk curve to find better value. Surfing the wave of revaluations of progressively smaller companies can be very profitable.