CHN

http://minesite.com/news/chalice-moves-towards-a-development-decision-at-koka-politics-permitting

If only politicians can be kept in cages!

TPT

Please note that my portfolios have been miserable. But there are some jewels there like any other portfolios. The very high risk investments that I made means the performances are all over the place. However, when I have owned them for long enough, there are some that I see great future in.

Of course, some are hype but these are good for trading in the short term. And if you hold them for long, they could vaporize or become ten-baggers or more.

In the link below, just read the ASX:TPT paragraph.

http://www.proactiveinvestors.com.au/companies/news/22828/london-broker-comment-corner-citigroup-oriel-securities-nomura-share-wisdom-22828.html

Oil and Gas explorers are great at generating hype. And drilling results are often negative and suck out a lot of cash. However, if you score a big hit, the discovery becomes a company maker. TPT is one that has excited the market recently. And it is not just in Morocco but in Oz, too. Great prospect but enjoy the rollercoaster ride!

Plastering the cracks

Today, you will see action on the ASX. Several central banks have stuck their fingers into the dykes. Great.... but the holes are still there. And more cracks will appear.

The reason why private banks are not lending is because debts were not paid back or the debtors couldn't make repayments. All the problems still exist. Greeks are still lazy and Europeans are still overpaid. And the Yanks owe a lot. Japanese haven't recovered from natural disasters. Chinese has a contracting market... with a pending property bubble bursting.

I am happy that there is going to a bounce but the gravity of more bad news will pull the rise back. Only buy what is valuable, will increase in value or are profitable.

ABU

If you had digested the announcement today by ABU, you might not have known that Old Pirate was expected to be THE area with the highest gold concentration. Maybe, the trench sampling was purely along the vein and therefore was a biased sampling. I only want to know why this area was not drilled earlier if the management had already known that this is the jewel in the crown based on historical data.

The share price closed at 7.4c... only a tiny rise relative to the stunningly impressive result. Bob Brown would be so annoyed that the mining tax does not apply to gold! I am so sorry Uncle Bob.

Currently if anyone asks me what shares to buy... I would say, out of my own portfolio, I would top-up ABU, IGR, KMC and for added risk CTP. CDU has bolted but based on history, the final JORC resource may disappoint.

ABU has a lot more analysis results pending; the drilling has been done. If the results are only one tenth as good as the one from today, it is still good. Note that trenching results are only for guidance for future drilling sites and do not quantify the total resources.

If you are reading this note, and you still have not bought any ABU shares after my repeated ravings, then you are wasting your time and IQ. Go fly a kite! Or watch sports!

CTP

http://www.asx.com.au/asxpdf/20111129/pdf/422x7hmzy0d44m.pdf

Why is the market not responding to something 'fluidic' now? There have been lots and lots and lots of hype from this company, mostly thin air. Now that oil is actually discovered, there is hardly any movement in the share price.

Once the big boys move into shale oil and gas, this one will be a prime target. At the moment, I am bearing a big loss because I bought my shares a long time ago, with lots of top-ups.

CDU

Investors no longer have faith in announcements from CDU. When it is bad, people listen but when it is good, it is almost ignored. Have I been foolish to think the news is good?

http://www.asx.com.au/asxpdf/20111129/pdf/422x33h83krfb3.pdf

I had already topped up in the last fortnight at $3.24.

KMC

Not much cash left but this one is tempting too with another good announcement.

http://www.asx.com.au/asxpdf/20111129/pdf/422x67yq52lcfy.pdf

IGR

This one is a producer of gold, not just explorer.

http://www.asx.com.au/asxpdf/20111129/pdf/422x4cyph6xj6x.pdf

Why is the market not responding well to this announcement? Who cares! I get to top up at 56.5c. I must be a dumb tortoise today; not a dumb rabbit because the announcement occured earlier.

ABU

After so much ranting about ABU by me, I think only one reader has bought ABU. And he was tempted to sell when it rose. Luckily he listened to me when I told him that the prospect is excellent and the share price was likely to rise when more results become available.

http://www.asx.com.au/asxpdf/20111129/pdf/422wztrsq9j6x2.pdf

I topped up a small parcel at 7.3c when I noticed the market was so sluggish at responding to that announcement. Currently at 7.5c. Too many tortoises in the market.

Markets rebounce

The bounce is a fake. All market conditions yesterday was the same as the day before so why should all indices spike upwards? Governments can "fix things" but you got to get people to work, you can't generate debt without generating profit on your investments and you can't value yourself high if your service is not desirable.

With gold, you have to find and dig it up. And like Australia, Ghana and Argentina, you have to content with sovereign risk. People and central banks want that stuff even though it hasn't got much use other than for jewelry and a standard for "value". That creates a value called POG.

While there will be more faked bounces, I am mostly investing in gold and commodities that maintain their relative values. You need oil, you need phosphate/potash and you need coal.

BHP

Virtually all the brokers are recommending buying BHP. It has dropped from its Apr 2011 high. That is true but nothing is improving in Europe, USA, China or Japan. In fact, it is getting worse. If you sum up BHP's market cap including those traded in London, then it is worth about 20% of Aussie stock market value. That means if you want a very averaged performance in your portfolio, just buy anytime!

Of course, it is a great company. In fact the biggest miner in the world with great projects and spread of commodities.

Personally, I would wait. But if I want to buy something now, just remember that POG is over USD$1600 per oz and cost of most production is under USD$1000, usually around USD$500 to 800. In other words, you can SEE the profit for gold producers. And if the world economy should collapse, taking with it, the value of currencies, then what better hedge than gold?

Market sentiment will rule in the short term. So gold producers will suffer the same fate as the rest of the stocks... until their profit announcements. However, there are also more and more reports asking investors to consider gold stocks. Try and seek out the PRODUCERS.

PXG

When it fell by over 4% today, I picked up an incomplete parcel. Rated low by market cap but when you look at the JORC resource announced recently, you just cannot believe investors are selling out!

AUCO

Amongst my tipster, this one is one of my current top 2.

http://minesite.com/news/ausgold-loses-its-chief-executive-but-not-its-focus-on-the-world-class-katanning-gold-discovery

What I like about his articles are his analysis and his ability to pick up future quality stock. There may be no movement for a while because it seems to me that few people actually read his reports! So if AUCO remains low at 81c, I put in a bid in for 81c.... Got it! Imagine, the ordinary share price is $1.04, to exercise it cost 20c in 2013. And someone sold their options for 81c. Basically I bought AUC at $1.01, with the remaining 20c to be paid in over 1 year.

The market sentiment prevailing at the moment is bad. But I am not a short term investor and the more people sell, the more appealing! You will note that while price of gold is rising and AUD is falling, and there is possibility of more gold to be uncovered, the share price of Ausgold is falling!

The market does not think with the head, hardly the heart; more with the rectum. It is true that European, Chinese and US markets are worrisome. But the price of gold mostly rose during the Great Depression between 1929 and 1938. In fact, it was said to be the only commodity that kept it value and rose except for one year. Stick to gold stocks... gold producers if you can. AUC is only an explorer :-( but with great prospect.

POG... its floor

When you are desperate financially, the first asset you sell is the one that generates the most cash. Hence gold fell badly yesterday. But look what happened overnight!

The last floor was USD$1600 per oz. Looks like the new one is USD$1700 per oz. The nouveau riche of India and China have developed a taste for the precious metal. There must be a lot more mistresses in those parts of the world now.

In EV/oz Au valuation, it is hard to beat PXG. Yet the market seems very indifferent to this stock because it is small. Yesterday, it announced a rise in its Au resource. The market response is "So what?". I love that!

BKP

Collected a small parcel today. Maybe I don't know how to read the announcement. While hydrocarbons were detected, it wasn't pressurized to surge out into the open but the pressure is increasing. Maybe Uncle Bob would not allow fracking in Australia.

Drilling is stopping soon with the earlier than expected start of the wet season.

http://www.proactiveinvestors.com.au/companies/news/22384/baraka-energy-and-resources-and-petrofrontier-corp-record-elevated-hydrocarbon-shows-in-macintyre-2-well-22384.html

PXG

http://www.proactiveinvestors.com.au/companies/news/22394/phoenix-gold-lifts-jorc-resources-to-168-million-ounces-22394.html


Here is another crazy one. No, it is not 168 million oz but 1.68 million oz. But even at 1.68 million oz, how does the market value this stock at under AUD$20 million? FIIK! (F.... if I know!) The final amount of resource is not announced yet. And it is already a producer but using other company's facility to process their ore.

POG is still over USD1600 per oz. Go figure how much 1.68 million oz is worth. Most gold production costs under USD$1000 per oz. You really wonder why the Chinese haven't taken over this stock yet! It is so cheap! But no one is listening....

BKP

Can you believe this?

http://www.asx.com.au/asxpdf/20111122/pdf/422pp29v63ywc6.pdf

There is decent oil or gas in Central Australia. But the market doesn't like it. It could be just the sentiment so the share price fell! I have put in a low bid and if I collect more BKP, I would be happy with those sellers!

Dow plunged

Today is not the best day to buy. Tomorrow is. But only if the Dow continues its plunge. This is madness. Of course, there are financial troubles everywhere. The Europeans are largely to blame. Now there is the Chinese property bubble. The money is flocking to 'safe haven'.

The real safe haven is Switzerland but the government there is restricting the use of the Swiss Franc for currency trading.

The best news this AM is the fall from parity of the AUD. Our debt level is low. Chinese government has to act to prop up its financial institutions to bring stability to the society, and it has a large reserve of cash. While gold has also fallen today, it is most likely because it is the best performer and people caught short, have to sell it. There has been a floor of USD1700 per oz but now it looks like USD$1600 per oz. At that level, lots of our producers are still very profitable.

Punished... whatever

Today, CDU had a good announcement but it only went up by 10c. The last few announcements in fact has been phenomenal. I have already topped up CDU very recently.

Last week GRY had a good announcement and it fell. Today, it is the turn AMX. Short term price movements have little to do with logic and more to do with sentiment. I did top up on AMX recently. Unfortunately, my cash has been assigned to exercising RRSO soon. So I have to buy very selectively. The best gold stocks to buy are still producers.

KMC and LSA

Based on the same logic, one is up and the other is down. But neither has profit statement yet reflecting their recent profits. You can only infer from their recent announcements what the next report will show.

If KMC continues its downward drift, I will get excited... Any seller who does not want very profitable gold producer, I am happy to relieve them of their miseries. I wonder which schools these sellers go to, to learn their arithmetic. But maybe they know something that a simple gasman overlooked or does not understand

Be ahead of the big guns

http://www.mineweb.com/mineweb/view/mineweb/en/page31?oid=140049&sn=Detail&pid=31

When these blokes are buying, you are perhaps a little late but not too late. If you can beat them to the line, then you might be smarter but not richer!

The arithmetic is so simple that I am sure my father with just two years at school would have thought the same as me, if he was still alive. How absurd it is that the POG has been high, the gold PRODUCERS have been churning out the precious metal and yet the share prices have been mostly languishing behind or not climbing as POG is? Look at RMS, KCN, KMC, IGR. These are stocks that I own so I am more conscious of their performances. Even the new crop of West African producers are not given proportional credit for their recent commencement of gold production.

The floor was USD$1600 per oz. In the last fortnight, at least, it has not gone below USD$1700 per oz. The POG cannot keep rising because when it is too high too fast, the speculators would start unloading their gold and drop the price. Plus, central banks might even sell and join in the speculators' fun. There is a lot of gold stashed in central banks but more are purchasing than buying because the Euros and USD have become volatile and diminishing in value. But then, there isn't that much gold to go around.

Why do fund managers get paid heaps to follow the big boys like lemmings when they should be thinking themselves? Unfortunately, whether share prices go up or down are often dependent on how these idiots trade in the short term.

LSA

http://www.proactiveinvestors.com.au/companies/news/22207/lachlan-stars-gold-intersections-continue-from-two-separate-deposits-at-the-cmd-mine-in-chile-22207.html

Sometimes, I get people asking me how do they invest in the stock market. And harder still, which stock do they invest in. Here is an example of very basic arithmetic.

LSA is worth AUD$54 million on the market at 97c per share. Last Sept quarter, it generated AUD$4 million in profit. You can extrapolate that to $16 million a year with a 40,000 oz gold produced annually, and unhedged. The PE ratio should be under 4. Next year, the management said that it will be increased to 75,000 oz Au per year and expect the cost of production to fall. AND they are expecting more hits with their exploration. 5000m have already been drilled; waiting for laboratory analysis. And another 3000m more drilling to be done.

Would anyone buy LSA? Most of my few current readers have a profession and a tertiary qualification and won't even look at LSA. What hope has a nurse? I even wrote to tell one guy to buy at 71c.... just recently when he asked which stock should he put his money in. Some idiots were dumping their LSA shares that day.

The wisdom of Alan Kohler

Worth reading his article in Eureka Report this AM. I have the same opinion as the person who he interviewed. No one wants to live in a depressed world. And lazy over-rated Europe (Germany excepted) has to take a cut in pay and accept a lower standard of living, including the Brits. It is impossible for politicians to tell the citizens that you need to work hard, productively and effectively (ie you have to make goods that others want to buy) and accept less government handouts. The honest and realistic politicians will get turfed out so that is why in Italy and Greece, you have technocrats and not politicians running the country.

Hence, I have been buying in a down market. I must the only fool in Australia! Those stocks of mine that were sold, were forced sales, ie due to takeovers.

Value of AUD

If you are simple, then it would appear that a high AUD is a sign of Aussie pride. You can get more on Amazon and your traveling expenses are less. True. But you spend that money outside of Australia and it is not good for Australia's economy.

Plus it becomes harder to sell Aussie goods. And whatever Aussie goods you sell, priced in USD, you get less AUD. The main export earners for Australia are all priced in USD, oil and gas, coal, iron ore, wheat, gold and virtually all other minerals.

Hence, if you think with your head, then a low AUD is much better. Why do you think China is progressing so well and exporting so much? It has a communist government manipulating their yuan to make it advantageous for Chinese businesses. The American Congress is livid over that issue. Part of European problem is due to cheap yuan killing off European exports and manufacturing.

GRY

Today, the market is trading using sentiment rather than logic/financial sense.

http://www.asx.com.au/asxpdf/20111118/pdf/422mfl2mb0mk9n.pdf

When you look at that announcement, it is so hard to believe that the market punished GRY for that. POG has fallen but it is still over USD$1700 per oz. If I was at home today, this would be the stock I buy. Who are these idiots selling?

NST

When I saw the announcement, my eyes nearly popped out. The grade is the highest in Australia for a long, long time at 0.8m at 12718g per ton. That is >300 oz of gold, valued at >USD$400,000 per ton of dirt. Elizabeth Taylor must have buried her gold pieces there!

I went in and grab what I could by offering a high price and collected a parcel at 89c. Luckily I didn't pay the top price for today! When the fact sinks in, a few more investors will want a parcel of this stock. If more drilling results match this one, then the share price will leap again.

But recently one stock was rapidly dumped (after a rapid rise) when it announced that the assay was incorrect! Hopefully it won't happen to NST!

Takeovers

Just received a nice cheque for HUN. But I would rather HUN continued on its own. It is so promising. It will prove to be a cheap buy for Banpu.

ESG got takeover by STO. It is below what I wanted but it is still a nice profit at 57%, mostly because of shares I bought before GFC in 2007.

I sold BOW yesterday because I didn't want to wait for the cash from Arrow (Shell). I bought mine at 98c (2009) and $1.15 (late 2010). So the profit again was good but it is frustrating that management sold out so easily.

With SBL, again the board sold off the company at too low a price. I am highly suspicious that they receive undisclosed kick-backs but I have no evidence other than to pose the question why did they sell off so cheaply? Hence I have lost money with SBL. The takeover has not occurred yet but when management agrees to a takeover, it is rare that it fails. Bastards!

ALK CDU RDR SVL BOW

Considering the fact most of my dealings were before the market fell, 2 went up and 1 (SVL) stayed the same and 1 fell (CDU), while BOW went up a tiny bit, I have done well!

Tomorrow, the market will go anywhere but highly dependent on the Dow. The fact that China surplus is relying less on exports is bad news for Australia. Still, we are better off than the Europeans or Yankees!

I still have a few buys on the side, hoping for desperate sellers.

European woes

European malaise is starting to bite the ASX. The once very proud region of the world with its sense of superiority and sophisticated taste has remained aloof and sophisticated... but they are becoming Texans with big hats but no cattle. We are heading back to the future where India and China dominate. And with the rise of America in the last 300 years, another super power which will be eclipsed by the historical two.

Luckily for me today, ERM had a huge jump so I was near neutral when it comes to alpha. What I bought today have mostly been coming down in price AND have been made good announcements. There are lots of these stocks but today I created cash by selling a stock (BOW) which is going to be taken over. I didn't want to wait for the formality.

I will visit Europe again when the Euro has reached parity with the AUD. And use cheaper Greeks, Italians, Irish, Portuguese and Spaniards to take me around. Maybe, the French and Brits, too. Germans are the only Europeans who deserve to remain aloof and rich.

SVL

This is the last buy today. Ag has been holding its value

http://www.asx.com.au/asxpdf/20111116/pdf/422khd995fz8nd.pdf

And when you see an announcement like that, I would still buy when its share price jumped today. But this is still way below my first buy price. Why such a small jump for such a fantastic result? You will have to ask the sellers! Maybe their wives want Paspaley pearls, now.

CDU

http://www.asx.com.au/asxpdf/20111116/pdf/422knmg6df5x5m.pdf

With an announcement like the above, it is so hard to believe that the final JORC resource estimate could be low. But that happened the last time. The market has learned not to trust the board. I like to think there is still integrity in the ASX-compliant stocks. Of course, I am naive.

So I topped up another parcel....

ALK

I sold off BOW as I didn't want to wait for the cash offer from Arrow (ie Shell). The offer has been on the table for a while now and there hasn't been another interested party. I might regret the decision. But since it is >25% profit over 2 years, I cannot complain.

I took some of the cash to buy ALK. Why? The Chinese needs zirconium for its ceramic industry and are scouring around for a reliable source. Since it is looked upon as as REE company, the market had recently taken a dislike for those stocks... other than NTU (which has a higher proportion of HREO, not the light cheap REEs).

http://minesite.com/news/alkane-will-shortly-join-the-ranks-of-the-gold-producers-but-the-real-upside-remains-in-the-steadily-advancing-dubbo-zirconia-project

Our Man In Oz is one of my BEST analysts. I read and DIGEST his article every Sunday. And I heed his words. He actually goes to the grounds or he interviews the big boys himself. What I like most profoundly is his analysis. He has made me a lot of profit.... and his articles are FOC! How generous!

ERM

It has been hovering just above my average buying price for a long time following a high plateau after I first bought into it. DH gave it a good write-up but he jettisoned the shares. Big mistake!

Here is why I bought: It has a gold processing plant worth more than its market cap just to replace the machinery. The gold in the tenement has a rich history but was not fully explored. When it announced what it had, it was disappointing so the market savaged it. But it hasn't fully explored yet! That is where the adage that the market is for the patient investors hold true. I believe Xstrata has a commitment to this stock, or at least another miner with a deeper pocket.

Suddenly it has exploded.

Please note that ERM's tenements are not that far from ABU and the latter has the biggest land tenements for exploring gold in Australia. And like ERM, ABU is also exploring in an area with historical high grade of Au and both have not fully explored their acreage yet.

RDR

When the value of this stock fell in a downwards ramp over the year, I had pondered whether to sell. The negative sentiment did not dampen my faith in it.

http://www.mineweb.com/mineweb/view/mineweb/en/page31?oid=139626&sn=Detail&pid=31

In fact, it is time to re-accumulate! It has a 3 million oz resource of Au and a gold plant on site which needs some work. The market cap is under AUD$100 million. POG is USD$1782 per oz. Go figure! And this gold acquisition was not the reason why I bought into RDR; there are other assets.

POG and AUD

POG went down by under 1% and AUD went down by greater than 1%. So for Aussie gold producers, it will still be a good day!

In the mean time, unless Italian and Greek citizens have a different work attitude and lower their expectations, changing a government is the same as moving the deck chairs on the Titanic.

Gas in Cooper Basin

I am applying for the Ambassador Oil & Gas float.

http://www.smh.com.au/business/all-eyes-on-bhps-shale-gas-ambitions-20111113-1ndux.html#ixzz1ddfq2CE2

Of course, it is high risk. Nothing has been found yet. Its main advantages are where it is and nearology. But China might have its own shale gas supply in the future. In the USA, shale gas companies are hot items.

For those interested, contact Max at mludowici@708capital.com.au and you might be allocated a firm allocation. Always read the prospectus and decide yourself; this is not low risk investment.

ABU and CDU

It announced a presentation for tomorrow and its share price went up. When you look at the presentation, it is a wonder why it hasn't gone up even higher.

http://www.asx.com.au/asxpdf/20111114/pdf/422hqgy0flg9p3.pdf

But why CDU only went only a little after this announcement?

http://www.asx.com.au/asxpdf/20111114/pdf/422hqgy0flg9p3.pdf

CDU used to announce fantastic drilling results but when the JORC resource was confirmed, it was far below expectation. Hence the market is forever skeptical.

Those who bought CDU will just have to be patient. The recent good announcements cannot be for nothing. Those who bought ABU, congratulations to you. I am expecting both these stocks to do even better when the final JORC resources are finalized.

VIL

Stands for "VILe" performance. But it is rather odd. Since I bought the stock, it has fallen 75%. Yet it is looking for oil and gas in the USA and in Tunisia. The North African project is bearing fruit with successful oil exploration. But the share price just won't perform. It isn't a stock for me to sell off either. This one is a test of patience.

Don't buy it. Not because of poor fundamentals. The market perception is importance. And it is "bad" towards this stock. So I will keep it until it hits the big oil or gas somewhere in this earth. When the big boys notice this stock with future good announcements, then only, jump into the bandwagon. You will never know when that will happen. Of course, it could be too late but VIL will remain miserable for a long time. How long? I will never know either.

Which gold stocks to buy?

http://www.usfunds.com/investor-resources/frank-talk/Gold/Which-Gold-Miners-Have-Largest-Upside-6814/

http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=139035&sn=Detail&pid=31

All these links are based on US stocks. But the same applies to Oz. When POG rushed to USD$1900 per oz, I couldn't resist buying producers whose share price has fallen, especially when you consider AUD had tumbled from USD1.08 to near parity. Not all the stocks have risen and during the recent correction, a few had been punished for no good reason other than sentiment and market craziness.

Gold cannot be printed. Gold is expensive to produce. Large gold deposits are not easy to find or mine. South African mines are very deep and less productive now, so China has overtaken it as the main gold producer for a while now. The Chinese and Indian middle classes and some central banks are starting to hoard gold again. Recently there has been a floor for POG.

Some of my gold stocks have only just started producing so the profit figures will take a while to be broadcasted. Hopefully, in time, the disparity between the rise of bullion price and the share price of gold producer will vaporize. Certainly a good explorer is worth considering. I topped up AMX recently and I scored a sweet rise :-)

China

The GDP is rising at >9% per year. Yet if you invest in China, chances are you are a loser. How is that? Don't know. This is a big puzzle for me. And only a smart economist or financial wizard can understand.

Volatility

Crazy! The European stocks jumped, the Dow jumped and the Australian roo will bounce on Monday, too. It is absolute madness the way the markets have been yoyoing.

Just because the Italian senate passed the austerity measures to pave the way for the bunga bunga king to exit, and the Greeks have decided on a banker to run the country, suddenly everything is rosy?? Government changes are just fingers stuck into a high walled leaking dyke. Greeks have to work, not protest. And soon it will be the turn of the Italian anarchists to savor the moment. The Europeans have a very high opinion of themselves and are overrated for their services.

I am not buying yet unless stocks are cheap or dumped for no good reasons. Logic does not exist in the current markets. Nice for me that cash is accumulating again.... from refund after an oversubscribed SPP and two stocks which were taken over by management or another company. The one taken over by management.... you can smell a rat but it is too difficult for small shareholders to do much.

Food production... phosphate and potash

There is no substitute for N, P and K in a balanced fertilizer. N is made out of atmosphere by subjecting it to high pressure and sold as nitrates or ammonium compounds. There is no need to mine guano anymore.

But potash and phosphate? You just have to dig to get them. In the recent past, I have read at least 2 articles, highlighting the fact that China (and India) has to feed more meat (and grains) to its expanding middle class. But there is limited arable land. So to get the maximum, you need supplements for the crops. Or you come to Australia and buy up the farms. Australia is el cheapo!

My potash stocks (except GMM which drilled and found nothing) have done miracles in spite of the fact that they have fallen in value. My phosphate stocks haven't all done well. But that is a matter of time. When the Chinese starts to takeover these stocks, that is when the general market will wake up again. I was awoken when BHP made a bid for Potash Corp.

BHP also made a successful bid to takeover a shale gas company in the USA. Well, I was ahead there! But not all shale gas explorers/producers are in the green zone. Some were bought before GFC and showing big losses.

POG and AUD

POG up by 1.68% and AUD up by 1.3%. That means gold producers will be making bigger profit. The cost of mining overseas is usually quoted in USD so that becomes cheaper too. Next year, lots of investors are going to wake up to discover gold stocks. Most are anaesthetized at the moment.

Still an anaesthetist is not always right even when calculation is based on simple arithmetic; perhaps there are deeper issues to consider before the understanding of a gasman.

How do you read announcements?

How does the market respond to good announcements? It depends of the whims of idiots. IGR and SAU had good (not brilliant) announcements and the share prices either went down or did nothing! In the meantime, POG is still up. IGR is a producer!

Perhaps these people who sold know something that I don't.

Wretched day at the market

The best thing about an awful day in the market today is... I collected relative alpha! Of course, it is very hard to stay in positive territory when the market is savaged.

I haven't analyzed my portfolios today but I suspect it is because of my holdings in gold producers/miners plus a few good announcements that saved my investments from a worse drubbing.

If tomorrow is another down day, then it will be a great day for me to re-enter the market. I was too busy at work to dabble in the share market. Cash is returning because one stock got swallowed up by management (but it is a loss for me) and GOR's SPP was oversubscribed so money is being returned. Then there is HUN being taken over by Banpu, a Thai company listed in the SGX and I am waiting for the sad cash (I never wanted to sell!!!).

POG, AUD and the disparity with share prices of gold miners

Spot on! The Dow can crumbled this AM, down a lot. The AUD is nearing parity again. But the POG is steadfastly at around USD$1780 per oz. When stock markets continue to tumble with further Italian concern, POG will fall, too.

However, it will continue to be a hedge for the cash hoarders. You can't put your cash in Euros! The Yanks print their money. Aussie interest is falling.

Today, I will be watching gold producers again... If they follow the general market and crumble, then they are worth topping up.

Italy and POG

The European bourses have plunged this evening on fear of Italy crumbling under its debt. This monster is beyond rescuing. But if POG holds up and especially if AUD also tumbles, then gold producers are definitely worth stocking up on. Sooner or later, the profit figures are going to be noticed.

Gold producers

There are now a few journalists writing about gold producers who have been ignored while POG has remained over USD$1600 per oz. Sooner or later, the slow market is going to realize that profits will be generated by gold producers... who are not hedged.

When I say slow market, I mean dumb investors. But like everything in life, what is too obvious may be not true. And I could be the fool! However, I do think simple arithmetic has never failed.

KMC

Had a quick look at the annual report. No profit has been stated (in fact,a loss of AUD$6 million) because it has only just started to produce gold after the annual report. There are impending big capital expenses to develop the mine further, more exploration AND installing their own milling plant (bought second-hand on the cheap). The profit figure should stun the market next time although the establishing cost may have a negative impact still. Still I could be wrong! But I have been accumulating KMC.

OYM LSA KMC

All are producing gold. The market cap for each is disproportionate to what revenue they generate or going to increase. All are finding more gold; all are going to increase production soon; none has reported awful news (KMC has a capital raising impending); POG has found a floor at USD$1600 per oz.

Even after producing their quarterly reports, the market still cannot value the company accordingly. And I am also puzzled by the confounding movement of the share price. LSA down then up. The other two are just down. Detail accounting assessment is beyond me so perhaps there are debts, poor profit generated in spite of good sales, options overhanging, board squabbling, litigation, impending cost, falling grades or deeper deposits requiring greater capital expenses, etc, etc. This kind of analysis requires some accounting background or scrutiny of the quarterly reports. I look at the bigger simple picture.

If POG is high, the cost of producing is steady and you have an increasing resource base, and you have been generating revenue every year, then that should translate into big profit. Yet, why is the share price for each of these stocks not rocketing upwards? I must be too naive. That is why anyone who reads my postings and buy without their own research, cannot be too smart (commercially) either!

Greek PM is a bigger dill

He is supposed to be the leader making tough decision. Instead, he wants to hide behind a referendum. Not only do we have lazy Greeks, we now have a dill for their leader! After all the negotiations with nations and big banks, this idiot sprang a market surprise.

But Greece is so small, about the size of a pesky irritating mosquito. And it is holding the world markets at ransom! How can that happen? The contagion effect will only be short-lived. The Greeks can go on being lazy as long as those in Australia remains diligent and intelligent.

The volatility due to the Greek factor has been exaggerated. Just give a mosquito a swipe. I haven't been active but neither have I been dormant. There are still good buys around. Note that the POG has not been below USD$1600 per oz. And I have read more articles on gold stocks will do better than gold bullion in the near future as profit figures are announced. But good profits need not necessarily turn on investors! Just look at outcome when the Aussie banks announced their profits!