American politicians

These people would epitomize the foolishness of politics when it comes to making sensible decision. The biggest problem with democracy is the voting system. You need the voters to perceive that you are acting in their interest for that electorate. The next consideration is the interest of your party because your party chose you to run for the spot. So what do you care about the nation's well-being if you wish to keep your job?

But while the fools are squabbling and the markets are burning down, this may prove to be the best short period to buy stocks. The USA cannot afford to let its status as a financial beacon to topple over. China will stop investing its surplus cash there... and may even put it in Australia.

On Monday, the ASX will fall significantly. Since it is the start of the month, I might get some dough to buy for my super fund. What better to buy than gold producer stocks! The POG has risen in uncertain times. Yet for me, an amateur, it is CERTAIN that the USA has to resolve its impasse and the stupid politicians have to think with their brains (not arseholes).... and wallets. I hope if she defaults on her debt, that it will be the politicians who stop getting paid first! But usually it is the lowest paid civil servants who get screwed first.

A few of my gold miners are moving into production phase or have moved into. PRU will be, ADU has just started, and quite a few have progressed with ordering their plants. And quite a few have discovered more gold. Just look at BDR.... the share price has come down 2 days after fantastic grades have been uncovered!!!!!!!!!!!! It is incredible how many idiotic sellers there are but I love them when I am not selling yet.

FAR into BDR

This is a calculated gamble that turned out dry. In the days ahead, with no further drilling, the share price will collapse further. So at my first opportunity, it was tossed out of my portfolio. From a nice gain, up more than 100% at one time, it has turned out to be a loss.

But that is the nature of investment in explorers. Those that are successful will reward well but they can disappear too if they fail to find the mineral, especially after an expensive exercise.

I first bought BDR in Oct 2008 and this parcel has rewarded me well. In January 2011, with another good announcement, I bought a small parcel to top up but at 86c. Today, with an excellent announcement, the share price only moved up a little. How good? The best is 10m at 205g/t including 1m at 1877g Au/ton. And then there is Fe at over 50% from surface.

When the share price hardly moved after the latest announcement, I used a portion of the money from FAR to buy BDR at 85.5c. How can anyone ignore a 1877g/t grade?!

Aussie Shale Gas

Here comes the first big boy. BG has joined up with DLS to search for shale gas in Cooper Basin. This is the start. There will be more big boys soon. I have at least 5 of those stocks, excluding Carnavon Basin.

Today was an awful day. The Yanks still can't settle their debt limit issue.

FAR - dry hit

No oil is found (London posting), so FAR will be dumped in a big way on Friday. Another bites the dust!

POG and gold miners

http://www.mineweb.com/mineweb/view/mineweb/en/page72068?oid=132323&sn=Detail&pid=92730

In spite of my ranting about gold producers, I doubt anyone took an interest in it. But the share market did listen to me!

The above article gives an incredible succinct way of describing the value of gold relative to the Dow. I never thought of looking it that way. I am either buying oil/shale gas explorer, gold or coking coal sectors. Well, I could be a brave fool or a dumb investor.

FAR

It is looking for oil offshore in Senegal. Just announced a trading halt pending a drilling result. No news from London from its joint venture partners.

It is either good or bad. When the result is out, the share price will either rocket or disappear into the thin air. Unfortunately most drilling results are disappointing even when the seismic studies are good. But I will sleep easy because it is a calculated gamble.

In another 1-2 months, it will be the turn of RRS and RMP. They have started drilling in Georgia. There are promising billions of barrel of oil. Such great hype!

And this morning, I begged and got a small amount to spend on WHN. It is looking for oil off the Seychelles islands; up to 4 billion barrels of oil. If it finds oil, then the shares will pay for a holiday trip there! But it will be a long time before we get any result as it takes a long time in the middle of the Indian Ocean to get any drilling done. And it will have to look out for Somalian pirates!

AUK

I have my simple logic on how to invest using basic arithmetic.

I am sure geologists have the same formula when they go looking for minerals. RB brought my attention to AUK. When you look at the map of where AUK is looking for its minerals, it has already proven itself, and then with each additional announcement, you get the feeling of how simple geology can be too!

Market direction

Today it should be tumbling according the SPI. Yet, it was up significantly. The US debt crisis is still being played out politically. So, who controls how the market move?

Before the ASX opened, I put down all my buy prices unless they were already ridiculously low. Well, at close, I even collected alpha...

Tomorrow, by the law of average, if White House is still fighting Congress, you can be certain that the market WILL fall. Inshallah!

CDU

Can you believe the grades? No. Just like all those investors who have been burned before, you no longer trust this company's announcements.

But I like to think you can believe Australian laboratories that assay the grades. So I bought some CDU this AM. The final calculation is the JORC compliant resource. Now, that is the important figure. I like to think that based on simple arithmetic, if the drilling continue to yield great result, then that figure should be good. Of course, the last time the market trusted CDU, it came up with a horribly disappointing figure.

Might be the same this time, but I like simple logic. I had to weigh carefully because I am running out of cash now. I cannibalized IRE and there is virtually no more spare cash unless I sell or my boss gives me more money to spend on the market.

Tour de France

It felt great that an Aussie has won it for the first time. Like the America Cup, today should be a "public" holiday.

But what it means is, it will inspire a generation of young Aussies to ride a bike and clutter the road dangerously.

What disgust me is, why when there is a Nobel Prize Winner, it does not stir the same drive in the youth of the "Clever Country"?.

No point winning the Nobel Prize this year for anything for any Aussie. The Australian of the Year will be Cadel. We have had too many Nobel Prize Winners but only one for the Tour de France.

Potash

http://www.potashblog.com/2011/07/report-identifies-potential-australian-potash-stars.html

I am a keen follower of RB. And here he presents 4 Aussie potash producers. All have been very profitable for me. I only bought AGR recently; already on nearly 15% gain. RB has made me a lot of money out of all the articles he wrote on potash. This sector is my best performer in the last 12 months.

Judging from the market capitalisation, I would say TRH and AGR are the most likely to spurt from now. The others have already jumped and unless there is a takeover, the share price won't be going by leaps and bounds for STB and ELM.

But of course, I am never always right!

CTP

http://www.proactiveinvestors.com.au/companies/news/18081/central-petroleum-worth-eight-times-current-value-according-to-bakers-investment-group-18081.html

Of all my current stocks that I hold, CTP takes the cream for hyping. It is only surpassed by MMR but that one has crumbled due to failure to prove any hydrocarbon at first drill. PCL only does it intermittently but it has powerful and rich joint venture partners.

I have met the boss of the company and he has tremendous faith in the company. It has the biggest tenementssss in that area.

If that valuation of CTP is true, then it is a wow for me. So far, it hasn't really proven anything big. There is a lot of coal but it is too far from any port and the quality is nothing to brag about. The hydrocarbons found are nothing to rave about either. But if it proves to be as lucrative as shale gas in the USA, then this one is worth more than the above valuation.

Never buy into this stock unless you are a calculated gambler and you have no qualms about losing everything. Of course, if it hits the jackpot, then the big boys will start to take over the management.

POG AUD

There were many "experts" who came out blaring that the POG is going to collapse. Meanwhile, the gold bulls were retreating into their pens.

I continued to buy gold shares. And coking coal companies. The coal companies has faded significantly but this trend will only be for a short while. There is no substitute for coking coal to make steal. Thermal coal is a different story.

One gold stock that has leapt is AUK, written up by RB, the man who makes me a lot of money. You have to read in between the lines to work out its potential worth.

And then there is LSA which I bought for intermediate term. The market capital is under AUD$50 million but will be producing a gold revenue worth USD$70 million this coming year. The gold cost USD$800/oz to produce (not cheap) and POG is at USD$1600/oz this AM. Go figure. If you can't, go back to your primary school and learn some basic arithmetic!

Even better still, LSA has not finished exploring yet....

Marathon Resources

I used to own shares in it. But one guy wrote shortly after I bought how beautiful the site is where uranium was found. He was of the opinion that the South Australian government will never let it be a mine. Of course, he was ridiculed, called all sorts of names, told he was a negative ramper, etc, etc.

That was a few years ago. I have learned, even before that, to ALWAYS listen to the worst comment/report/opinion. I did sell at a small profit subsequently, partly because of a naughty management. Today, that guy was right. And he has the last laugh... with me!

RRSO

RRSO is on the move again. What I can't understand is why did it even fall? The drilling rig has spud and should bear results in a month or two. Looking back, I should have bought more RRSO when it was falling.

RMP is on a trading halt for a capital raising. Yes, I would be interested! If it is Ming Securities, I might be able to get some. There is a broker there who gave me some RMP rights the last time.

The markets

I have no idea how the markets decide which way to move. But it is nice to have alphas. The ASX is up just over 1% but my two main portfolios was up 2% and 1.5%.

SER has graphite, a strategy mineral... controlled by China. Today it made a deal with a North American company so it jumped a bit. I am up 150% on it, bought in Oct 2010.

I bought URA a long time ago and it lost 90% of its value. But it spun out GTE. And I have made a huge profit out of GTE. So when you look at the two combined, the loss in URA is nothing, especially because I topped up on GTE after the initial float several times.

BPT

http://www.theaustralian.com.au/business/companies/beach-energy-poised-to-capitalise-on-shale-gas-fields/story-fn91v9q3-1226099341923

Why wait for BHP to come knocking on its door? I have already topped up some time ago. This season, due to successful fraccing, without Greenies and farmers to deal with, the share price is starting to climb.

Before you plunge in, a word of warning. Very few of my CSG, oil or conventional gas explorers in Central and West of Australia have done extremely well. But I am a calculated optimist.

Short term performance

Whatever I buy usually falls. My purchases this week performed variably. It is rare to get any purchase at the trough. But my strategy has always been longer term investment. There are many idiotic sellers in stocks that I buy. It is a pity that I only have that much cash after selling IRE. I topped up on CEO and LSA, the very next day.

I like coking coal (not for electricity but for steel making) and I still love gold explorers, especially those which are producing as well. PRU is going to produce its first gold ingot this quarter :-)

KGD

I topped up today because of another good announcement. It is not fantastic but if it continuously produce good result, this is becoming a stock ignored.

And as I said before, when this company floated, it met all the requirements of a good quality IPO. But the share price continued to drift downwards. This top up today confirms my faith in the management and in its future prospect. I am draining my supply of cash!

IRE

IRE is almost directionless after so many years. I got rid of it today. Well, tomorrow if a big institution makes a move on it, I would regret the sale. This has been an anticipated event.

But I find resource stock more exciting... and rewarding. Especially stocks with prospect or where the metal price is good and expected to stay high.

So I used the money generated to buy coking coal (not thermal coal) and gold stocks. There is CEO (but it kept falling!), LSA, AUK and CKA. And finally, a top up of my Chinese fund, AGF.

KGD

I once read an article on how to pick a stock to invest when it floats. This one hit all the right notes. But at $1.80, it has been a gradual fall. That is not warranted.

http://imagesignal.comsec.com.au/asxdata/20110608/pdf/01187541.pdf

When you look at its drilling results, you wonder what the market to doing to a good gold producer. I have already topped up once. And if it continues to fall, this is NOT a stock to sell but accumulate while idiotic sellers are dumping their shares.

Simple arithmetic

http://www.proactiveinvestors.com.au/companies/news/17920/asx-gold-producers-cga-mining-lachlan-star-dragon-mining-integra-mining-silver-lake-resources-17920.html


Here is an article, doing all the homework for you. I own 4 out of the 5 companies mentioned. And topped up on SLR. If the market stays as it on Monday, I will have to collect the other company LSA mentioned because its market capitalisation is worth $40 million but it is collecting revenue of $70 million a year. After cost, it will probably be a PE of 1.

Investing in vexing!

Shale Gas

http://www.businessspectator.com.au/bs.nsf/Article/BHP-Billiton-swoops-on-US-oil-firm-Petrohawk-for-1-JRUN4?OpenDocument&src=hp1


BHP just spent nearly AUD$12 billion purchasing a shale gas producer in Texas and Arkansas, covering about a million acres. Just look at BKP... a million acres in central Australia but nothing found yet. Worth "ext to nothing" compared to Petrohawk. And then there is CTP worth a "few cents" only to BHP. These are unpolished gems but they could also be just quartz if nothing is found. However, the geology and seismic studies suggest otherwise.

As usual, Australian assets do not carry the same weight.

ERN

There was almost total indifference to this stock's announcements recently. Trench sampling is not helpful in getting a JORC-compliant resource estimate. But it has some bearing on drilling results.

Hence suddenly it flew up from 13c to 17c today after 2 days delay with the last announced result. Because it is exploring in the Democratic Republic of Congo, who cares! I more than doubled my holdings in Jan 2011 with a purchase at 10c per share. With that my profit has jumped today. But this is a volatile stock, so I won't collect any bragging rights... yet.

RVA - Reabsorbable coronary stent

If this stock turns out a product that can be sold AND sells well, then today's top-up will be a wise move. There is no way of telling how it will perform in the future. I topped up because the share price has fallen.

Simple arithmetic

Simple arithmetic... someone is listening to me but not my readers! Because I have none! Or those who read, don't buy shares. I have been harping on the rising POG and AUD stability. With Italy and the USA going downhill, gold has become the default flag for value.

Anyway, the ASX hasn't been doing well but this does not apply to the gold producers. There are many negative values today in my portfolios. However, overall, the gold miners have given me a 0.5% rise. It appears to be the gold producers or oil explorers that did well, giving me alpha.

ASX 200 was at 4600 on the last financial day of 2010-2011. Today it is at 4500. But thanks to gold and oil, I have made a profit instead for my portfolios. And I have been brave and dumb to top up during the critical days. It is too early to say whether I was a fool or a smart contrarian. Just being a contrarian is gambling. Is it wise to be a calculative contrarian? Inshallah! I always maintain that when people are dumping good stocks, grab them at a low price. The other stocks that I usually retain are those that can pay real dividends (i.e. from profit). Very few of my small resource stocks pay dividend.

RMP, RRSO

It has spudded in Georgia and will take 55 days to reach the target. Most drilling are unsuccessful. So, the chance of the share price vaporizing is high. This is a calculated gamble because if successful, then the share price will rocket upwards. The gamble is made a little less riskier because of helium studies. A positive result leads to a higher success rate. But this is no guarantee.

Hence in about 2 months time (there is often delays to be expected, resulting in temporary falls as well), I will know whether RRSO and RMP are good investment or a bad gamble.

Shale Gas

http://www.theaustralian.com.au/business/news/a-fracking-good-deal-on-aussie-shale-gas/story-e6frg906-1226094181189

They are coming...

There is a lot of shale gas in Australia based on geology. But without fraccing it will be very difficult to extract the sequestrated hydrocarbon. The volume apparently is huge. In the USA, those gas explorers were penny dreadfuls until the big boys moved in. They were taken over for billions.

Australia follows America; it is in the history.

Someone wrote in Hotcopper comparing SSN in Brakken Basin and BKP in Georgina Basin (check the details yourself). In the USA, it is thousands of acres; in Australia, it is more than a million. Yet one is worth a lot more than the other. SSN has made me a lot of profit while BKP is barely green.

KAS

Late last year in Nov, the price of tin was going through the roof. And there is no reason to not to expect it to go higher in the longer term. It is very difficult to recycle tin because it is used in small quantity. Lead cannot be used in soldering material; to be replaced by... tin.

However, nothing follows the script! KAS has been tumbling since I bought but today, I topped up at 20c. For some reasons, presumably because China is powering ahead in its economy so the price of most metals has gone up.

SLR

Just had a look.... and I did pick up some SLR shares. Could have got them cheaper earlier on but I delayed buying and its share price picked up recently. As long as it is a producer, I am less concerned about what price I pay. I am investing for a longer term.

If Italy keels over, then gold will reaffirm its status as the yardstick for value. Would be nice to have some gold bars, but I hate having to worry about storage and security. Easier to own gold producers. And SLR is going great with both producing and discovering more gold for it to refine.

For those who missed out today, I expect the downward trend of share markets worldwide to continue tomorrow... unless a few companies in the USA announce phenomenal profit results soon.

Simple arithmetic

POG is still above USD$1500 per oz. But AUD has fallen to below USD$1.06. That means gold producers will be more profitable in AUD. But people are still not buying gold producers. I am but I have set my buy price too low to account for market sentiment.

My EQN cheque was deposited nearly a fortnight ago. But it is in Canadian dollars. So the bank has not cleared it yet! The profit was more than 100%. I first bought it in 2006. And then in May 2010, I bought CGG which got taken over by EQN. In turn EQN was taken over by Barrick. Sweet!

When the money is cleared, I can't wait to grab more gold miners. But I expect the markets to go down in the short term.

AGR

Two recent articles by RB and Proactive suggest AGR is doing good work and the future should be rosy. When market sentiment took a tumble today, AGR fell by 9% so I picked up some shares in it.

Italians are in trouble. All Europeans other than Germans will be in trouble. You only have to go to 5-star resorts to notice that Whites are becoming rarer. And possible all the Whites are actually Aussies! In their place, are Chinese and Indians. Europe has always been overpriced. And offers lousy value for money when traveling. The arrogant attitude will also cause more problems.

I have always like potash or phosphate stocks. Indians and Chinese have to eat. So do Europeans and North Americans. And AGR's tenements are in the middle of its market, ie Brazil.

Rally?

One report expects Wall Street to rally next week. Brave reporter! The job data was bad but companies are expected to announce profits above expectation. Well, if that is true, those companies only paint a historical picture and a smaller financial picture. The bigger and more predictive picture is the USA job figure.

And then another reporter thinks the Aussie market will rise, especially the gold sector.

Markets cannot keep going up so there should be a correction. I am hoping the gold producers will be marked down. I love opportunities to top up when idiotic sellers abound. A few years down the line, those sellers might be laughing at me as an idiotic buyer! I am relying on the simple arithmetic. But smart mathematicians are rarely the richest people around :-(

AOA

This company had a few great announcements because of its investment in a gold explorer in North America. But no one wants it. You could not even sell it if you wanted to because there was NO buyer! So instead of selling it, I put a low bidding price to top up my meager holding. Now, I am the ONLY buyer!

FML

This is an arrogant company. While I paid my money early, I missed out on the share purchase plan recently. If you live in WA, you get your mail earlier. Hence I am sure a lot of country shareholders and those from the Eastern States missed out as the SPP closed much earlier.

The sweet revenge is the share price has fallen below the SPP price! So I topped up about 10 days ago at 7c. And that has fallen a tiny bit. Now, this is a gold producer.

AZM and ADU

My error. I bought both these gold explorers recently. AZM has not started producing yet but ADU is. While my AZM has given me a nice profit, ADU is not moving much. However, it is ADU that should be racing ahead because it has only recently started producing and announced recently that it reaffirmed its full year production.

Like Mr Deng's cats, it doesn't matter whether the miners produce gold or not, as long as the share prices have risen! However, unless there is prospect for mining, a miner is not profitable in the long run.

Disastrous week ahead

When markets keep rising, you know they will correct soon. And with bad job figure from the USA, there is an impetus for the impending fall next week.

Yet, while AUD is steady against the USD, POG continues to climb albeit slowly. If next week shows investors dumping gold producers, you wonder how they make longer term decisions. Short term investments are for gamblers. And I prefer to gamble to WIN. Hence if any of my gold producers come out short, I will definitely plunge in again and again.

Shale oil and gas

How do you value these companies? China has the largest shale gas reserves but extracting in for commercial purpose is not going to happen till 2020 apparently. The USA has enough to last a long time. England is discovering its own. France disallows fraccing so it is not going to possible to extract its underground gas economically.

But some of the largest basins in the world are in Central Australia, covering vast areas in QLD, SA and NT. I have pumped some money into companies operating around this area. But so far, most have been losses because nothing substantial has been found yet. If the hype is true for most of these companies then I can probably retire earlier! Provided my wife does not spend big.

In the US, big companies like BHP and Shell have spent big buying up those 'small' shale gas companies. Will it be repeated in Central Australia?

Awful short term memory

Yesterday, I was going to buy more GRY after its good announcement. But I didn't want to pay over the top. Of course, it went higher when I didn't buy.

But then what is the reason for selling down today, almost back to where it was on Tuesday close.

Investors' memory must be so short! And obviously, the sellers of GRY are also very poor at basic arithmetic. The POG is up and AUD is down a little.

When the market recovers, my stocks often do well especially when price of oil and gold are moving up, and AUD is not climbing high. My investment portfolios are not standard.

VOR

It hit a stumbling block in May 2011. So bad that its share price fell below the rights issue whic I didn't participate in. But I did buy shares on the market. Of course, it went down further. But today, I have gone into green again.

Not all Mongolian stocks do well. HAR has been falling badly. But I am happy to sit on it.

The markets

Price of gold is up and AUD is steady at around USD$1.07. What justified the rise in Wall Street last night? I have no idea. Based on performance in other markets AND the rise in China's interest rate, it should be down.

While Aussie market is expected to fall today based on SPI number, the gold index should be up. But big investors never understand simple arithmetic and trade mostly for short term gain.

AZM

Why do people sell when AZM is starting to produce gold? And why do people sell when AZM keeps discovering more gold?

It is good for me! AZM has gone up by about 21% since I bought it 8 days ago. I love the Greeks. Every time there is a financial crisis over those lazy guys, I get to make a nice profit! In fact, most stocks I bought during that time have risen. But I am not optimistic how long the profit will stay.

While price of gold remains high and AUD remains relatively unchanged, I am happy to continue to invest in gold.

I was going to invest in more shares today but the All Ords started to rise. So I only collected some CTP at 5.9c. Don't put your money in CTP if you are a chicken because this is pure hype, with one failed drilling already. But if what the company has been bragging about is confirmed, then there is a lot of money to be made.

IGR

http://imagesignal.comsec.com.au/asxdata/20110705/pdf/01195111.pdf

When you look at the grades and thickness, you will realize that the market has not fully appreciated this company's announcement. And this is not the first time.

I am hoping to be able to top up again.

LRF

http://imagesignal.comsec.com.au/asxdata/20110609/pdf/01188153.pdf

http://imagesignal.comsec.com.au/asxdata/20110620/pdf/01190434.pdf

The share price is 84c, the final dividend is 3c (total 4.5c for the year). The NTA is worth $AUD$1.39 on 31/5/2011.

Can you imagine buying a $1.39 million dollar home for $840,000 and getting $45,000 for rent annually? Yet most people prefer to buy property and not LRF. Worse still, why are investors selling off LRF? That guy who runs it is brilliant. One share he sold off recently is Riverdale to RIO.

Market direction

No idea where the market is heading. The US recovered some but it might be a dead cat bounce.

I topped up ADU today at 56c with a good announcement that the market ignored for a while. Some thing with JKA but I could not buy any as the sell price was pitched a bit too high.

What has been great in the last 2 days is my portfolios had a lot of alpha.... but that is after faring a lot worse than average!