No. 2 -- Randgold Resources ( GOLD)

Foster: Randgold fits the mold of the company that has grown organically. They've got a great team of geologists that have discovered world-class deposits in West Africa and we just love their growth profile and the fact that they founded it all themselves.

Are you worried about their rising cash costs, which have grown from $400 to almost $700 per ounce?

Foster: Not really ... the Achilles' heel of growth companies is that you have operating risk as they bring new projects into production ... Randgold is going through some growing pains, struggling with costs and operating issues that we think will get ironed out as time goes on.

I've heard from some analysts that Randgold's too expensive, that it trades at 22 times 2011 earnings, that it's too much of a premium. Why is that OK for you to stomach?

Foster: They're not too expensive, first of all, if you give them credit for all of the ounces that we expect them to develop over the next five-10 years. So my guess is that analysts who see them as expensive aren't seeing the growth potential in the company that we are.

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