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David Vengerov  

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  • Is The Price Of Golden Minerals Ready For Another Leg Up? [View article]
    Golden Minerals has just put out a 3Q 2013 results and I just cannot believe my eyes. They are AGAIN talking about a long ramp-up period to restart production. They are also reducing their estimated grades AGAIN. If we look at their forecasts since January 2012, they went from unbelievably good to totally rotten, with nothing happening in between. They promised investors that completion of the San Mateo ramp will allow them to bring the heavy machinery into the mine and greatly increase the production volume. But now it looks like that effort was totally wasted, since they are now saying that they cannot get the required scale of operations for the autoclave.

    Moral of the story: do not believe what the management says. Instead, believe the weekly price chart for the stock and invest only in companies whose weekly chart is going up. AND always place a stop below a recent major low, so that if that if the chart loses its nice uptrending property (an uptrend, by definition, is a series of higher lows and higher highs), you'll be out, looking for a better chart to invest into -- always fight on the winning side!

    I apologize for getting suckered into believing the AUMN management and spreading these hopes to other people...
    Nov 6, 2013. 08:13 PM | Likes Like |Link to Comment
  • An Explosive Rally In Gold And Silver Is About To Begin [View article]
    Folks, history is about to be made in the gold/silver sector. The latest COT report showed that the net long position in silver futures in the nonreportable category (the "crowd of speculators") dropped from 2040 last week to 700, making yet another all-time low. The net long position in gold futures in the nonreportable category dropped from -1500 last week to -1700, making yet another all-time low. At the same time, the net short position in gold futures in the Producer/Merchant category has dropped from 43K to 38K contracts, making yet another all-time low (in 2008 this net short position never dropped below 70K contracts, contrary to what some sentiment articles have recently claimed). So commercial traders, who are closest to the action, feel the least need right now to hedge their future production against the falling gold price...If we do not see a MAJOR rally in gold/silver in the next couple of months, that would be REALLY weird...
    May 10, 2013. 04:34 PM | 1 Like Like |Link to Comment
  • An Explosive Rally In Gold And Silver Is About To Begin [View article]
    Since the time of my previous comment a week ago, it seems like both GLD and SLV made a double bottom on the 1-month intraday chart at google/finance and are starting to pick up. I am expecting gold and silver to break out above their Feb 26 high next week, which will result in a bullish pattern of higher lows and higher highs since mid-February, which will cause all the sidelined investors to start piling back into this sector, thus causing a MAJOR rally. The sentiment is definitely ripe for that. Here is a good article that digs deeper into the COT reports, which I like to use as my sentiment indicators:

    http://bit.ly/Xz7kT6

    When sentiment reaches bearish extremes and the price stops dropping like a rock and makes a bottoming formation, the only direction for the price to move is up.
    Mar 9, 2013. 08:23 PM | Likes Like |Link to Comment
  • Is The Recent Destruction Of Golden Minerals' Share Price Justified? [View article]
    The 1-month intraday SLV chart on google gives me a feeling that the double bottom at $27.50 is going to hold and that silver will break out above its Feb 26 high next week. In anticipation, I purchased some May $29 calls on SLV at $0.67 today.

    The action in the miners is very constructive as well, with GDXJ solidly outperforming GDX this week. Whenever this happens, the risk is ON in the precious metals sector, which usually implies more gains are to come.

    The "fly in the ointment" for me is the overbought level of SPY, suggesting that the broad market is ready for correction (small or large). In order to hedge myself against a broad market decline, I bought some VXX today at the close. With VIX at $12.60, there is almost no room left for it to go down, and so the only danger to a VXX position is the contango-related decay, which is less than 10% per month. I am willing to pay that price while waiting for a broad market correction.

    I posted on Feb 13 in the comments section to my other article (http://seekingalpha.co...) that I purchased TVIX when VIX dropped under 13. That entry worked out very well for me -- I exited that position on Feb 25/26 with a nice gain. I think today's entry will work out just as well.
    Mar 9, 2013. 01:12 AM | Likes Like |Link to Comment
  • Is The Recent Destruction Of Golden Minerals' Share Price Justified? [View article]
    Peter, as I posted in the comments section to my latest article (http://seekingalpha.co...), I was very disappointed by their Q4 production report. I wrote that article in expectations that they will achieve the guidance they re-affirmed only a few months prior to that of becoming cashflow positive in Q1 2013 and then steadily increasing their production up to 850 tpd in 3Q2013.

    Prior to placing a high probability on a mining company starting its production on time, I should have collected some statistics about the frequency with which production forecasts have been met in the past from other mining companies. Here is a video that talks about it:

    http://bit.ly/XorRK5

    The folks in that video (from Sandstorm Gold) found that out of all the mining companies they considered, 0% have actually started production on the day they first set as the expected production start day. Moral of the story: building out a mine is a complex activity, which ALWAYS takes longer than expected.

    Golden Minerals has now given a more detailed information about their strategy, and it is apparent that their previous strategy was "opportunistic," where they hoped to temporarily beef up their output from other mining areas, rather than the main Santa Juana area, until the San Mateo ramp is completed. This plan did not work out, and now they have set more realistic expectations of the steady growth in production starting only when they complete the San Mateo ramp. Given the horrible sentiment in the mining sector now, no one will pay attention to AUMN until they actually complete the San Mateo. Thus, I wrote wrote that until that happens, AUMN will be at the mercy of computer algorithms, which can jack the price up and down so as to shake out all human traders.

    Sentiment indicators are at a rock bottom for the mining industry now. Check out, for example, this article:

    http://bit.ly/102G3r1

    Thus, for diversification purposes, I'll try to time the bottom of the pullback in this sector (using stops, and being prepared to get stopped out a couple of times before I actually nail THE bottom), and will then go heavy into January GDX calls. No need to play around with risky junior miners, when the majors are as oversold as they are now.

    I'll start piling into AUMN again either when they rise above $3 or when they complete the San Mateo ramp, whichever happens first. :)
    Mar 5, 2013. 03:48 PM | Likes Like |Link to Comment
  • An Explosive Rally In Gold And Silver Is About To Begin [View article]
    I have just looked at the latest COT reports and saw that as of Feb 26, the net long gold position of small speculators was 21K contracts. Note that gold rallied hard for 4 days prior to Feb 26, and so by this Friday the net long position of small gold speculators was probably below 20K contracts...

    The previous two times when this number dropped below 25K in the last 5 years were on May 15 (25K contracts) and July 24 (23K contracts), which were both major bottoms for gold. In contrast, the one-year high in the gold price attained in early October was marked by the net long 61K contracts.

    An extreme low in the net long position of small speculators was THE indicator that helped me to pick out the July low with the above article, and the latest COT numbers suggest, once again, that a major bottom in gold is nearby.
    Mar 2, 2013. 08:23 PM | Likes Like |Link to Comment
  • The New Share Offering By AUMN Creates A Unique Buying Opportunity [View article]
    I have just looked at the latest COT reports and saw that as of Feb 26, the net long gold position of small speculators was 21K contracts. The previous two times when this number dropped below 25K in the last 5 years were on May 15 (25K contracts) and July 24 (23K contracts), which were both major bottoms for gold. In contrast, the one-year high in the gold price attained in early October was marked by the net long 61K contracts. These numbers suggest that we are much closer to the bottom now than to the top. Also note that gold rallied hard for 4 days prior to Feb 26, and so by this Friday the net long position of small gold speculators was probably below 20K contracts...
    Mar 2, 2013. 08:20 PM | Likes Like |Link to Comment
  • The New Share Offering By AUMN Creates A Unique Buying Opportunity [View article]
    Sure, Antonio, but you have to be more civil yourself and not make posts like the one you made this morning.

    We are here to figure out ways of making money in the market rather than laughing at investment decisions other people are making.
    Mar 2, 2013. 07:43 PM | Likes Like |Link to Comment
  • The New Share Offering By AUMN Creates A Unique Buying Opportunity [View article]
    Antonio, if you were to see beyond your nose, you would notice that the whole junior mining sector, GDXJ, keeps making new all-time lows.
    Mar 2, 2013. 01:27 PM | Likes Like |Link to Comment
  • Is The Recent Destruction Of Golden Minerals' Share Price Justified? [View article]
    I think the company-specific uptrend in the stock will begin when they complete the San Mateo ramp (currently scheduled in 3Q) and will be able to lower the heavy machinery into the productive Santa Juana area and start opening up new mining areas. Currently, they are getting only 300tpd from Santa Juana, with the rest 200 to 300 tpd coming from lower-grade more costly mining areas. Starting 4Q they will start increasing the output of Santa Juana, which will both lower their total cost and increase the total throughput. In their latest production report the company has also indicated that they found a new way of extracting gold from gold pyrite, which is less expansive than the autoclave approach they have been thinking about before. If in 2Q they make a statement that they have tried this process and it worked well, then the company-specific uptrend might start in 2Q. By a company-specific uptrend I mean an uptrend that will exist even if the mining indices remain flat.
    Feb 18, 2013. 01:31 PM | Likes Like |Link to Comment
  • Is The Price Of Golden Minerals Ready For Another Leg Up? [View article]
    Golden Minerals issued a 2013 production plan today, which seemed uniformly positive. For the first time ever, they moved a milestone forward in time rather than pushing it further out! This plan also left plenty of room for positive surprises, if any of the metalurgical tests they are doing now becomes successful. I was also glad to see that they plan to have $24M in cash at the end of 2013, which implies that there is a chance that they won't need to raise any more capital, since they plan to become cashflow positive in 3Q2013.

    I would be buying more AUMN now, but I want to wait for the inevitable correction in S&P, since in the past the miners were always sold down indiscriminately during such corrections...

    I bought some TVIX yesterday when VIX dropped under 13, which I think is a good way to hedge my current position against a market correction. With VIX at historically low levels, it has no room to fall further, and the only downside to owning TVIX/VXX is contango in VIX futures, which is less than 10% per month now...
    Feb 13, 2013. 01:34 PM | Likes Like |Link to Comment
  • Is The Price Of Golden Minerals Ready For Another Leg Up? [View article]
    jdm, I can't say whether a specific trade was a human or a computer trade, but overall I have noticed many times that AUMN traded opposite to GDXJ (was down on a GDXJ up day and then up on a GDXJ down day). Humans would not trade like that...
    Feb 7, 2013. 08:17 PM | Likes Like |Link to Comment
  • Is The Price Of Golden Minerals Ready For Another Leg Up? [View article]
    The strong support at $3.50 was broken. :) As I had commented above, the delay in expanding production at Golden Minerals likely means that the stock price will be at the mercy of computer algorithms for the next 6 months, which will be jerking the price up and down so as to repeatedly lure human traders into positions and them shake them out. The stock price should start trending up once they complete the San Mateo ramp, unless silver starts a sustained uptrend before that.
    Feb 7, 2013. 03:56 PM | Likes Like |Link to Comment
  • Is The Price Of Golden Minerals Ready For Another Leg Up? [View article]
    It looks like $3.50 is indeed a very strong support for AUMN. Every POS has its bargain price, and at $3.50 AUMN is once again in a bargain territory. As long as you have a 1-year time horizon, there is a very high chance that you'll make good money on your position. If you adopt a 2-year time horizon, then there will be plenty of time for Golden Minerals to complete their San Mateo ramp, bring the heavy machinery through that ramp into the productive Santa Juana area, and ramp up their throughput to 850 tpd.
    Jan 30, 2013. 02:10 PM | Likes Like |Link to Comment
  • Is The Price Of Golden Minerals Ready For Another Leg Up? [View article]
    Thank you for the first kind words, Antonio. :) I bought a ton of April $5 calls between $0.4 and $0.6, and I think there is still a chance that they come into the money if silver rises above $40. That's not impossible, I think, given $85B per month printed by the Fed. I am actually totally amazed that gold, silver and miners have not zoomed yet, given the previous strong correlations between expansions to the Fed balance sheet and risk asset performance.
    Jan 30, 2013. 02:06 PM | Likes Like |Link to Comment
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