Okay, you’ve heard what I don’t like about AE. Now let's talk about what I do like. Agnico-Eagle’s mines are in countries that are politically stable. That may be very important in coming years, as South and Central American countries swing back to the political left. 

Despite its recent production problems, the company should earn $3 a share for 2012, assuming gold stays above $1,250, which is a pretty safe bet. Its price-to-earnings ratio of 12 is the cheapest of the big gold miners. 

But even if AEM misses estimates, several new mines will come on line in the next three years, lifting production substantially. 

Meanwhile, after a recession in 2012, gold prices should soar as the Fed prints money to pay off the parade of unfunded liabilities coming due. In short, production problems or not, repriced options or not, the shares are a bargain.

I’m starting to accumulate shares now because:

•    I could be wrong about the recession and a concomitant short-term drop in gold prices
•    After heavy year-end tax selling, the shares could bounce back in January
•    At this price, recommendations from big brokers or investment media could boost shares.

They’re cheap enough to start buying now. If they fall another 10% to 20%, all the better. Buy more. Two years from now it will all be money well spent. 

Buy Agnico-Eagle Mines up to $40. Take an initial position now and add on pullbacks of 10% and 20%. At those prices it would be okay to overweight the stock.