Watching Silver For A Bottom In Gold [View article]
So far I am treating this current move as a counter trend rally in gold due to the fact the trend of MZM really has been persistently flat YTD and I think is part of the reason why most of the cyclical sector has underperformed YTD. As long as the major averages do well and they can get away without printing why bother to do it?
I would be careful if gold rallies 10% from the low because that is close to a key technical level and if it fails you are stuck.
Cam I totally agree with you on your theory in the recent rout in gold.
To add: Ironically, it appears the the fed did a major addition to the money supply looking at a weekly MZM the subsequent week Goldman issued its bearish call in gold. As you know Goldman gets this cash first. More money for them to pickup the trading bargain created when (my theory) GS likely pushed the media to highlight the bubble in the Bitcoin market which caused its collapse and the effect spilled over to the gold market .
Looking For Value In An Overbought Market? Try These Hated Conglomerates [View article]
I thank you for the article and mentioning EXORF. The stock looks like its a much safer way to hold Fiat (which I think is a huge value in itself) in a portfolio provided you area smaller investor for liquidity reasons. You also get the NAV discount and a dividend to hold it. As for the currency discount trust me it doesn't exist. The pink sheet last traded in January so its real price has not been reflected.
Sandstorm: Adding Value Like No Tomorrow [View article]
The only issue I have with regard to SAND is what are the respective all in costs for the specific companies mining the commodity for them. To me that would be a very important thing to know and it seems to comprise of extra work and time just for one stock.
SND.v for instance certainly streamed into some low quality dicey projects.
On the subject of what gold stock did well Caledonia Mining has done relatively well over the past 12 months and they were plenty of special situations that panned out if you timed them right like Avion and Centamin.
Caledonia Mining Reports First Quarter Production [View instapost]
I added to my position today.
I feel the carnage in gold today coupled with MZM rising approximately 100 billion this week (whereas the QE trend has been negative YTD and I believe is the main reason for this extreme negative pressure on commodities) and the stinky spreads from the reverse split shares is providing a great opportunity to buy here at worst for a counter trend rally. You also get to capture the dividend.
Joe thank you for the article. I have been on a campaign to get NSU to significantly raise the dividend to counter the huge valuation discount on where it operates.
Its good to see you are adding here. I would be doing the same if the company would commit to just milking the cash cow. I have been nibbling at NSU and MWE.TO instead.
Great move John if you sold in the 2.20s. The stock looked like it was rising on news speculation which never materialized off of a strong market which subsequently experienced some technical damage and uncertainty.
I would probably start to consider re scaling into your Mart position off of the ugly Q4 2012 numbers.
Gold Stocks Are Dead. Long Live Gold Stocks! [View article]
First of all NSU is so horribly misperceived as a gold play but really base metals will be the main commodity mined from H2 2013 to the end of life (Copper will be the main commodity until 2017). I raise this point because if the scenario present the world economy picking up from money printing this stock should be insulated from the "fear" trade.
I agree the current values across the mining sector in general no matter what they produce is quite mind boggling and relatively close to the lows set in 2008 but over the past year the producing company representing the absolute best value changes.
NSU has been in my top 5 mining names for quite some time. I also would say NSU has the best mine quality of the producing juniors if you factor in mining method, grade and mine life.
The sector is tough to make money since 2011 but you can still make money in the sector by becoming opportunistic of temporary adverse events and particularly for this stock do well by using scales on the buy and sell side.
As for value NSU a couple days ago at its nadir was trading at a level where if you extrapolate its expected cash balance you could get all of its FCF for absolutely nothing after Q1 of 2015 which leaves you with about 2 years of high grade copper production and 25 plus years of mining the Zn+byproducts from the Bisha main pit and satellite deposits at the current rate production.
One major criticism of the company is the company is so profitable they should triple or quadruple the dividend and still could easily expand the company without dilution.
A very high dividend would make this stock expensive to short, entice investors starved for yield and mitigate the country risk discount.
I don't blame you for your skepticism . The low priced microcap stocks rose sharply in January in 2012 and then gave up their gains quickly and so far we are exhibiting a similar rise.
However,it is fact that the creation of money leads to higher stock prices and the level of printing is now at a much greater rate than last year. I believe as long as this is intact the trend will remain up.
I believe the market will begin to sell off a specified time period before an important macro date i.e debt ceiling and then continue its rise after it is resolved.
I actually would be more worried if the economy improved. Austerity would set in and the central bankers balance sheets would likely shrink again like they attempted before the 2010 flash crash.
2012 Review And What I Am Doing In 2013 [View instapost]
My inferred question with Khan is do you think they will collect their judgments against the gov't of Mongolia and ARMZ? I think their case is very strong and has won in the lower court. Lots of money at stake considering the paltry market cap of the company. I always thought Mongolia was and is still tied to the Soviet Union/Russia and they need to break that connection to be considered a better environment for investment. You might have more insight on these changes.
Its odd that you mentioned Centamin that probably was the easiest non risk money I ever made. There was a window of 1 1/2 hours where the resolution regarding the diesel supplies was made public in the Egyptian press but the stock did not move higher on the PR. Bought a bunch at 43 sold at 69 and rebought my free cost shares the day after from the forced selling volume due to the index deletion at 60.
Apparently the recent follow through price action on the stock is related to the signature on file with the petroleum and mine ministries. The judgment rendered from the court case in October was actually won on the technicality of no signature of the concession in question because the company came to court ill prepared.
2012 Review And What I Am Doing In 2013 [View instapost]
John I also enjoy your reading and will always appreciate what you have done for Caledonia Mining. At least the fundies fit the parameters what I prefer to find in an investment.
As for the pick in 2013 why not Khan Resources? The judgment comes due in November. You probably have a strong opinion on that situation that would be interesting to hear your perspective.
It seems with exception to Mart what really worked well for resource companies in 2012 was special situations due to political related situations. Avion, Centamin Calvalley (2011 that was unlocked in 2012) etc
7 Brand New Entrants Into The Dividend World That Deserve A Closer Look [View article]
1 I don't follow SWC. It is not necessarily stinky cheap. In the resource sector I generally look for companies with a high ROE/PTB value (40 or higher) or a low EV/EBITDA with a PTB below 1. I am not at all familiar with the minor details of the company but I am not the biggest fan of high capex low grade porphyry projects unless perhaps it can be fully funded internally. A guess they took this route because they operate in Montana which do have very draconian restrictions in mining. It is unfortunate they picked an Argentinian project just before the YPF debacle. I still think if a mining company could create a very high yielding company that can be easily funded through internal cash flow (a situation similar to Mart) its relative value would be much greater than most of its peers and the company could use equity to acquire the cheaper company. What investment out there can you get paid well to hold a hedge in a portfolio and would be afraid to short because of the high carrying cost?
The only general comment I can give about the sector is strict fundamentals did not work well in the mining sector for the past 2 years unless you were able to trade through the short periods of sector strength.
Special situations did much better but they force you to trade. Nevsun UN boycotts and reserve downgrade The coup in Mali allowed me to pick Avion for a decent stink value and subsequently got purchased and the recent problem with Centamin allowed me to book a 60% gain for holding it a week with no risk because a positive news release was out in the Egyptian press before the close. The dummies didn't raise the stock price for approximately 2 hours. I rebought my profit shares when the stock was delisted from an index 3 days later. Crucible mentioned Labrador Iron Mines LIM when it was hammered down to 15% of book value a month ago after an equity offering. You have to understand how Wall Street vultures work. Flush the sheeple out then dangle a carrot. Now look at it on a minor upgrade in the sector up approx. 200% a month or 2 later.
2. My only suggestion is try the interactive investor board in the UK for an anlysts report on HOIL. There may be a recent post in the last month with an analysts report. I did my own crude analysis for 2013 based on the company's projections and came up with an EV/EBITDA at 4 times with the cash flow approximately doubling each year for the next 5 years. All internally funded. Regarding Crucible I use him to save time. His fundamental analysis is 99% on the same wavelength as mine. He is really a deep value investor and finds situations with a strong catalysts. I really don't have the time to dispute him on some minor detail. For instance, I know Crucible does not like Heritage because the lease is up in 2019 but if they improve the production which has not been done for 50 years the lease will be renewed. The only suggestion is to follow some poster who share your investing philosophy to aid in finding ideas to allow you to save time for your own work on other stocks and macros. Learn to trade around a core position and know the difference between a cyclical and secular stock. People I think who are worth your time reading is Tim Stabosz aka longtimefollower on the yahoo board and Honest Abe on the stockhouse board. AAII shadow stock portfolio etc. I like Cam Hui on SA for macros and quant theory.
You got my investing book in a few short paragraphs. Free of charge.
7 Brand New Entrants Into The Dividend World That Deserve A Closer Look [View article]
Same name on IV but with a hyphen. I rarely post because Oullins and Crucible steal the show (definitely deserved). I really don't have the time to post because I am busy in the trenches and contacting companies on suggestions. In the past 18 months four companies out of seven companies intend/paid a dividend after a letter to them but only Mart followed through with my exact suggestion. ( Mart ,Caledonia Mining, JBSS and Orosur Mining the latter finally did it in a desperation attempt well after I sold out of it when it was obvious they didn't have a viable 2nd project). After years of trying management's are starting to listen somewhat to my tactical suggestions. I have to give Mart plenty of credit of gaining creditability. The turning point was when CA>CL. It sure was a mickey mouse operation in the beginning especially with the drama of its owned rigs.
RE: Oando The company is going to dilute to pay for this acquisition but I would not chase it at a 70% higher price for it and I would wait for the dilution if you want to own it. One thing I don't like about Oando is I am 100% sure the company never will be shareholder friendly. From the start they had Bharti on the board and I am sure he educated them of the ropes of being crooked. One positive thing about the company is I believe they have the strongest position in the next marginal bidding round. I am not concerned with lack of liquidity I have bought many names where I was the only volume.
Of the African oils I actually like Heritage the most(even more than Mart at this point) but it is going to take some patience. If they hit their eventual production target and prices stay the same their cash flow tops out at 2.3 billion annually. In the 3rd year Buckingham will hear from me regarding initiating a dividend program at a high rate.
7 Brand New Entrants Into The Dividend World That Deserve A Closer Look [View article]
HNR 1/3 retracement of this gain perhaps. The company nets about $12.50 cash on the Pertamina sale and the stock is below that level. EGY who knows when they wake up but I do see value there and I don't think I have any influence in their strategy either.
My adds in the oil sector in the last 6 months were Iona in the mid .30s Oando at $1 and Heritage at $1.90 and $2.80 US. Heritage's Canadian shares trades at a discount to the bid in the UK and US pinks. If you can tell Nigerian oil has treated me well in the past with Mart and Addax and presently so if it ain't broke I am not going to change.
I picked up Mart during the credit crisis and took a chance that it would survive intact. I knew that when the UMU-1 and 5 wells never really shown any depletion after about 9 months of production that they had much more to find. It is nice that the company followed my suggestion posed on the IV board in the summer of 2011 that they pay a dividend at this high rate.
Watching Silver For A Bottom In Gold [View article]
I would be careful if gold rallies 10% from the low because that is close to a key technical level and if it fails you are stuck.
Cam I totally agree with you on your theory in the recent rout in gold.
To add: Ironically, it appears the the fed did a major addition to the money supply looking at a weekly MZM the subsequent week Goldman issued its bearish call in gold. As you know Goldman gets this cash first. More money for them to pickup the trading bargain created when (my theory) GS likely pushed the media to highlight the bubble in the Bitcoin market which caused its collapse and the effect spilled over to the gold market .
Looking For Value In An Overbought Market? Try These Hated Conglomerates [View article]
Sandstorm: Adding Value Like No Tomorrow [View article]
Sandstorm: Adding Value Like No Tomorrow [View article]
SND.v for instance certainly streamed into some low quality dicey projects.
On the subject of what gold stock did well Caledonia Mining has done relatively well over the past 12 months and they were plenty of special situations that panned out if you timed them right like Avion and Centamin.
I think at this juncture Iwould
Caledonia Mining Reports First Quarter Production [View instapost]
I feel the carnage in gold today coupled with MZM rising approximately 100 billion this week (whereas the QE trend has been negative YTD and I believe is the main reason for this extreme negative pressure on commodities) and the stinky spreads from the reverse split shares is providing a great opportunity to buy here at worst for a counter trend rally. You also get to capture the dividend.
Future Dividend Increase Candidates [View article]
Caledonia Mining Pays Initial Dividend [View instapost]
Selling Mart Resources Today [View instapost]
I would probably start to consider re scaling into your Mart position off of the ugly Q4 2012 numbers.
Gold Stocks Are Dead. Long Live Gold Stocks! [View article]
I agree the current values across the mining sector in general no matter what they produce is quite mind boggling and relatively close to the lows set in 2008 but over the past year the producing company representing the absolute best value changes.
NSU has been in my top 5 mining names for quite some time. I also would say NSU has the best mine quality of the producing juniors if you factor in mining method, grade and mine life.
The sector is tough to make money since 2011 but you can still make money in the sector by becoming opportunistic of temporary adverse events and particularly for this stock do well by using scales on the buy and sell side.
As for value NSU a couple days ago at its nadir was trading at a level where if you extrapolate its expected cash balance you could get all of its FCF for absolutely nothing after Q1 of 2015 which leaves you with about 2 years of high grade copper production and 25 plus years of mining the Zn+byproducts from the Bisha main pit and satellite deposits at the current rate production.
One major criticism of the company is the company is so profitable they should triple or quadruple the dividend and still could easily expand the company without dilution.
A very high dividend would make this stock expensive to short, entice investors starved for yield and mitigate the country risk discount.
Why My Inner Investor Is Worried [View article]
However,it is fact that the creation of money leads to higher stock prices and the level of printing is now at a much greater rate than last year. I believe as long as this is intact the trend will remain up.
I believe the market will begin to sell off a specified time period before an important macro date i.e debt ceiling and then continue its rise after it is resolved.
I actually would be more worried if the economy improved. Austerity would set in and the central bankers balance sheets would likely shrink again like they attempted before the 2010 flash crash.
2012 Review And What I Am Doing In 2013 [View instapost]
Its odd that you mentioned Centamin that probably was the easiest non risk money I ever made. There was a window of 1 1/2 hours where the resolution regarding the diesel supplies was made public in the Egyptian press but the stock did not move higher on the PR. Bought a bunch at 43 sold at 69 and rebought my free cost shares the day after from the forced selling volume due to the index deletion at 60.
Apparently the recent follow through price action on the stock is related to the signature on file with the petroleum and mine ministries. The judgment rendered from the court case in October was actually won on the technicality of no signature of the concession in question because the company came to court ill prepared.
2012 Review And What I Am Doing In 2013 [View instapost]
As for the pick in 2013 why not Khan Resources? The judgment comes due in November. You probably have a strong opinion on that situation that would be interesting to hear your perspective.
It seems with exception to Mart what really worked well for resource companies in 2012 was special situations due to political related situations. Avion, Centamin Calvalley (2011 that was unlocked in 2012) etc
7 Brand New Entrants Into The Dividend World That Deserve A Closer Look [View article]
I still think if a mining company could create a very high yielding company that can be easily funded through internal cash flow (a situation similar to Mart) its relative value would be much greater than most of its peers and the company could use equity to acquire the cheaper company. What investment out there can you get paid well to hold a hedge in a portfolio and would be afraid to short because of the high carrying cost?
The only general comment I can give about the sector is strict fundamentals did not work well in the mining sector for the past 2 years unless you were able to trade through the short periods of sector strength.
Special situations did much better but they force you to trade. Nevsun UN boycotts and reserve downgrade The coup in Mali allowed me to pick Avion for a decent stink value and subsequently got purchased and the recent problem with Centamin allowed me to book a 60% gain for holding it a week with no risk because a positive news release was out in the Egyptian press before the close. The dummies didn't raise the stock price for approximately 2 hours. I rebought my profit shares when the stock was delisted from an index 3 days later. Crucible mentioned Labrador Iron Mines LIM when it was hammered down to 15% of book value a month ago after an equity offering. You have to understand how Wall Street vultures work. Flush the sheeple out then dangle a carrot. Now look at it on a minor upgrade in the sector up approx. 200% a month or 2 later.
2. My only suggestion is try the interactive investor board in the UK for an anlysts report on HOIL. There may be a recent post in the last month with an analysts report. I did my own crude analysis for 2013 based on the company's projections and came up with an EV/EBITDA at 4 times with the cash flow approximately doubling each year for the next 5 years. All internally funded. Regarding Crucible I use him to save time. His fundamental analysis is 99% on the same wavelength as mine. He is really a deep value investor and finds situations with a strong catalysts. I really don't have the time to dispute him on some minor detail. For instance, I know Crucible does not like Heritage because the lease is up in 2019 but if they improve the production which has not been done for 50 years the lease will be renewed. The only suggestion is to follow some poster who share your investing philosophy to aid in finding ideas to allow you to save time for your own work on other stocks and macros. Learn to trade around a core position and know the difference between a cyclical and secular stock. People I think who are worth your time reading is Tim Stabosz aka longtimefollower on the yahoo board and Honest Abe on the stockhouse board. AAII shadow stock portfolio etc. I like Cam Hui on SA for macros and quant theory.
You got my investing book in a few short paragraphs. Free of charge.
7 Brand New Entrants Into The Dividend World That Deserve A Closer Look [View article]
RE: Oando The company is going to dilute to pay for this acquisition but I would not chase it at a 70% higher price for it and I would wait for the dilution if you want to own it. One thing I don't like about Oando is I am 100% sure the company never will be shareholder friendly. From the start they had Bharti on the board and I am sure he educated them of the ropes of being crooked. One positive thing about the company is I believe they have the strongest position in the next marginal bidding round. I am not concerned with lack of liquidity I have bought many names where I was the only volume.
Of the African oils I actually like Heritage the most(even more than Mart at this point) but it is going to take some patience. If they hit their eventual production target and prices stay the same their cash flow tops out at 2.3 billion annually. In the 3rd year Buckingham will hear from me regarding initiating a dividend program at a high rate.
Anyway I enjoyed the chat.
7 Brand New Entrants Into The Dividend World That Deserve A Closer Look [View article]
My adds in the oil sector in the last 6 months were Iona in the mid .30s Oando at $1 and Heritage at $1.90 and $2.80 US. Heritage's Canadian shares trades at a discount to the bid in the UK and US pinks. If you can tell Nigerian oil has treated me well in the past with Mart and Addax and presently so if it ain't broke I am not going to change.
I picked up Mart during the credit crisis and took a chance that it would survive intact. I knew that when the UMU-1 and 5 wells never really shown any depletion after about 9 months of production that they had much more to find. It is nice that the company followed my suggestion posed on the IV board in the summer of 2011 that they pay a dividend at this high rate.