POG and POS

Ben Bernanke said last night that it will be less likely that the USA needs QE this month. Because, it is not dishing out easy money, the POG and POS took a plunge.

One lesson is (I was already aware of it) that easy money causes the market to behave irrationally. Hence, for the longer term, QE disappearance is better. Most markets short term trends are determined illogically; something I cannot predict as events cannot always be foreseen. But you can be sure that gold and silver stocks will tumble today AFTER the announcement by the Feds.

Silver

http://www.theaustralian.com.au/business/opinion/average-family-sedan-fuels-demand/story-fnciihm9-1226285561920

When RB's articles were free, few read it anyway. Now you have to be a subscriber so you won't be able to read the link unless you are one.

Interestingly, minerals are mentioned, and the best outlook is for Ag. When SVL kept falling in spite of good announcements, I topped up on it at 12c. Yesterday, it went up to 14c. The POS has been steadily going up. Because I first bought SVL when it was much higher, I am still at a loss but it is nice to top it up when few people want it.

PCL

It went up to 17c today. My first parcel, 250000 shares, was bought at 1.3c in Apr 2009. It continued its upward ride to 3c-4c and then it remained pretty tame until last year. Once the big boys moved in, every investors wished they bought earlier.

When I topped up in Aug 2011, it was at over 9c. PCL didn't do that well after that and I wondered whether I have bought in too early. Well, looking back, it was a good move to buy whenever markets are dumped!

RDR

At 29.5c, I collected a small parcel of RDR. My boast is I got it at the trough for the day.

What is amazing is ABU has another good drilling result and its share price hardly moved. With so many good announcements, it is unbelievable that the market is treating this stock like a pariah.

Buy sell performance

In the last 2 months, I had put in low bids to buy and collected quite a few small parcels. Only IDL and EDE have been big disappointments, with VMS and ABU falling slightly. RIO was sold for $71 and it is now $68. I had to sell to realize cash to buy the maximum number of RIA shares (SPP) at 30c (now 43c). There were 11 stocks that showed rises. So I feel very smart considering the market hasn't been doing that well. The most impressive is NGE, from 46c to 66c. KAS earned a speeding ticket notice from ASX today :-)

The one I expect to do well some time in the future is... ABU. And IDL will turn when the market realizes it was oversold. VMS will be mining tin so there is always hope! And one day, EDE will be a lot more profitable.

ABU

This is an unloved stock. Whatever good announcement it makes, it only has an ephemeral positive effect. Today's announcement might be more an infill rather than mostly a fresh area but it is still very good. I hope ABU share price remains low until I have more cash!

One or two years down the line, I wonder what will happen to this stock. How can it possibly keep producing good drilling result and persistently gets ignored?

RDR

3 million ounces of gold, worth $11/oz. First gold pouring at the end of this year from Meekatharra, WA.

Why is it so cheap and why is that no one wants it?

http://www.proactiveinvestors.com.au/companies/news/25759/reed-resources-first-gold-pour-in-late-2012-at-meekatharra-after-decision-to-mine-made-25759.html

RIO and RIA

This is what I call a good exchange.

I didn't have enough money to buy the maximum for SPP of RIA so I had to sell RIO. And after selling off RIO, I needed to sell a few more RIA at 40c to buy the SPP at 30c.

Well, I had a great exchange. RIO has gone down further and RIA has gone up more.

And even better. Today, the market fell by 34 points. The super went up by 0.5% and the wife's portfolio went up by 0.25%. Sometimes, I just cannot explain why but I am delighted with the performance of my portfolios.

Prediscovery

The most thrilling stocks are the oil explorers. Good tenements but nothing found yet. Best if big oil companies farm into their blocks. There are PCL, TPT and WHN. And of course, RRS and RMP but the joint partner is not 'big'. Then there are the shale oil and gas kids, too.

At the moment, I am positive with the above stocks. If the drilling turns out dry, then share price plummets. The thrill is the upside....

FML and AVA

RB in Pure Speculation (The Australian) pointed to an article by Hartleys. The biggest jump in a share price occurs during discovery. Sometimes, even when discovery has been announced, the market is still skeptical... until a lot is uncovered.

I bought AVA for its "greenstone" tenements in Kenya. And FML is uncovering more gold at Treasure Island. I have put a low bid for FML so after that article, I won't be getting any top-ups!

Hedging

I have read lots of articles suggesting investments in overseas markets as a mean for hedging. Why bother when you can invest in gold stocks?

Those gold producers that produce gold as predicted (number of ounces produced and cost of production) usually make good profit and the market likes them. Those that come up with excuses for under-performing get hammered. NCM is a good example where production in Lihir Island will come down because the processing plant has not been maintained properly. Oooops!

PCL

Something is going on here. Because I collected the vast majority of my PCL shares when it was <=3c in 2009, it has been a great performer for me.

It has been falling after reaching a high and then recently, it has started to climb again. All the hype and all the deals didn't help that much when it was tumbling, not so long ago. Well, it gave me a great opportunity to top up at 9.3c in Aug 2011! For a while, it dipped way below that.

Currently, it is moving up and up to 15c. And it has moved into my top 12 stocks in my super portfolio and worth more than BHP, SYD and GOR, purely on performance of share price. No oil has been found.... yet. I have put so little money overall on it but it has exploded by more than 470% in the last 3 years. Regrettably, this kind of stock can plunged suddenly too.

TRY and KCN

I used to own this stock. And it is a good gold PRODUCING company. It recently announced a rise in profit. A big rise. Of course the share price went up as expected.

But this rise should have been factored in already.

If you look at KCN, it too has been doing a good job in Thailand. Of course, there are bureaucratic, weather, or other problems. But it is doing a good job in Thailand with a good corporate culture. Yet, its share price is not highly rated by the market.

Gold stocks

Today I read an article by the director of a large overseas gold company. He was lamenting that POG has gone up by >20% while gold stock has only risen by 1%. He obviously didn't read the history of the JSE of South Africa. It took more than 1 year for gold stocks to be noticed. Why it takes fund managers more than 1 year to work out that profit is going to rise? Because their fathers didn't send them to primary schools to learn basic arithmetic. When that sector rose, it went further and further up for a few more years.

Will history repeat itself? Profit is the most important. If you sell gold a lot more than it costs you to produce it, then the rise will be inevitable.

RRS and RMP

After confirming that the rumour was not true, it took a full day before the share price plunged. If you had bought at above 18c in the last few days, you would be furious. I prefer to buy when it has fallen AFTER a GOOD rumour!

There is a lesson to learn here. Never leap in purely on rumours. When it comes to money issues (or politics), be wary about hearsay until you know the truth. Share prices that keep rising without any basis should be treated with skepticism. In fact, if it is a relentless rise for no good reason, consider selling and re-buying when it has fallen again.

IDL

There was a massive plunge to 95.5c, more than 30% fall. Why? Someone with lots of shares in IDL obviously didn't like the recent result. But when I read it, it sound fine. So I bought at 99c, a small top up. You will know tomorrow whether it was oversold or rightly sold off.

RRS and RMP

That rumour about oil discovery is just a rumour. It will take until end of March to reach its drilling target. Sometimes, evil seller drums up a lie to sell at a higher price. That is why it is always important to read ASX announcements to be 'sure' about what is going on.

There is a Texan discovery though by RRS with around 100 feet of 'gross pay zone'. I have no idea what that means but it sure sounds good!

POG and AUD

While the value of gold stocks has risen due to POG and AUD factors, investors were dumping resource stocks today so my portfolios suffered consequently.

There were some outstanding performances but they do not compensate. If you look today, the profit from ILU jumped by over 1000% but it got mauled because the short-term demand might be down.

PCL

Big oil companies had been farming into PCL's tenements. But why would the share price jump so much in the last month or so? There is no drilling done yet. Just read that Cove, one of PCL's partners offshore in Kenya, is going to be taken over by Shell.

I can't tell you whether you should buy this stock now although if you had bought when I first harped about PCL, you would be a happy camper now. My average was 2.6c and it hit 14.5c today. My last purchase was at 9.3c when the market was tumbling in Aug 2011 but the majority was bought in 2009.

Because of the leap in share price, this is now within the top 12 in my super fund portfolio. When oil is truly found, then it will worth a lot more. Some of my own selections, small explorers or taken over by others, have displaced my 'blue chip' stocks in my top dozen, bought when I was advised by Citibank. In fact, once there was only one (AGO), now there are 5 (AGO, PIROA, AZH, GOR and PCL).

IDL

I read its profit announcement yesterday and it looked good but it must be below market expectation. But the company expects to do well unless there is global deterioration.

So I put in a bid for 99c but I might have just missed!

RRS and PCL

There is a rumour doing its round about 'impacted fossil fuels" at 400m deep in Angola and secrecy regarding oil hit in Puntland, norther Somalia. This article is written by the same person. Only RRS is drilling there with RMP, and PCL has acquired tenement in Namibia not long ago. Namibia apparently shares the same geology as Brazil but drifted apart with the continental split. If you are ignorant of the geography... Angola borders the north.

RRS will have to deny the rumour or confirm it today on the ASX.

POG and AUD

The Dow does not know where it wants to go this AM but the US market is still open for another hour. What is 'certain' this AM from the combination of a rise in POG and a small fall in AUD, is a rise in the value of gold stocks. The SPI is marginally down. Oil has not moved much either. Well, virtually everything is directionless... except for the POG. Warren Buffett does not know his history very well. Gold may have hardly any industrial use but it has represented value for a long time. The biggest hoarders are central banks.

Copper is stable while its inventory in LME is falling. Greece is still in deep shit but at least the Greeks can still keep their toilets.

Two gold stocks that have fired my interest recently other than ABU are RDR and DRA. I have also put in low bid for BSR, FML, RMS and RDR. If there are desperate sellers, I am happy to oblige.

RRS

This stock almost vanished when it drilled a dry hole in Georgia. It was expecting a large oil hit with a high degree of success from helium studies. But could it be in Puntland where the big oil is? Unfortunately, if oil is truly found, the Somalia government is going to exert its authority over this autonomous region.

http://dissidentnation.com/major-oil-strike-in-somalia/

If the above is true, then RRS can expect a sharp rise tomorrow. No wonder the share price has been rising and rising in the last week. It has to be inside information. But all this could also be a hoax...

RDR

http://www.asx.com.au/asxpdf/20120222/pdf/424jlq8x87wdn6.pdf

This is another throwaway company; worth almost next to nothing for its 3.3 million oz of gold plus more.

KMC

When it first announced how much it was making out of processing its ore by a third party, it looked good. But today, it told a different story... that it is too expensive.

Hence, tomorrow, you can be sure the market will dump its share. I am tempted to do the same.

Market performance.... lots of alpha today

It wasn't hard to predict... AUD not moving over USD$1.07 and POG hovering over USD$1750 and DJI is positive. But with China manufacturing activity down, it has affected the ASX.

I had lots of alpha but if the mode of the market remains the same tomorrow then I expect a fall in my portfolios. Outstanding performance remains with the same stocks, viz, PIROA, AZH, RRS and AVB. The stunner was SSN.

CTP and DEG

These are my current biggest losses. DEG nearly doubles that of CTP. Yet, both continue to provide some excitement. DEG once was ruled by the man who was the Explorer of the Year. And each time, a good announcement was made, the share price came down! The market obviously knew how to read them while I must be on a different planet. The loss with DEG was made worse because it has been many years now and it continues to bleed.

At least with CTP, when its hype finally meets reality, I can say I was either a big fool or a clever investor.

DEG has moved in Argentina. I cannot possibly regained my capital but I still have hope that my loss can have some 'recovery'. There is a SPP coming up but I am not sure if I want to put any more money into it.

PIROA

You have to wonder who was/were the idiot(s) who sold down PIROA yesterday (AUD was down and POG was still over USD$1720 per oz) in a rising market. And then today, it has regained nearly all that loss in a down market.

You better hope it is not the fund manager who you pay to look after your hard-earned money.

GSC

After selling off LYC, I haven't been buying as much as I sold. Hence, today

http://www.theaustralian.com.au/business/opinion/global-geoscience-makes-a-splash-in-the-us/story-e6frg9if-1226277596559

with the resource editor making a splash for GSC, I decided to put a bid in for this stock. When another big resource stock takes an interest, it has done the homework for you.

WA Premier

Colin Barnett will go down in WA history as the best premier. And possibly, of the whole Australia. Here is someone who is going to harvest WA mineral wealth for the future. At the moment, he has not announced who controls the fund. He will only be the best if he makes the board independent of politicians, that is, the state parliament cannot use the fund to balance the budget or manipulate the wealth.

He is also not going to relinquish the state tax he is imposing on miners there to the federal government. Em... eventually, the whole of Australia might have to live in Perth.

POG and AUD

The US market is still running and the DJI is up. POG is up. AUD has gone below USD$1.07. The only negativity is SPI is currently down 13 points.

However, these factors spell alpha for me. Gold stocks will do well today. And I am saturated with gold stocks. The saturation was not from what I invested but secondary to the rise and rise of some gold stocks.

Sometimes, market sentiment will over-ride everything :-(

JMS

A long time ago, BHP was jolted by Billiton from South Africa. Eventually, they formed an amalgamation and hence, BHP became BHP Billiton. Along with that, the CEO of Billiton became the CEO of the combined companies. However, the chairman sacked the CEO because he went on to make a deal with RIO without consulting the board.

Today, this South African guy is using JMS as his Australian beach head. It rose and then fell. And for a while now, it has fallen badly. I don't know why but I am watching this stock closely. And might even put a low bid in for it.

Bad day on the market

This is my idea of a bad day on the market - below par performance even though on both parcels, the value rose.

The most detrimental effect was from PIROA but then how can I complain if it has been a star recently? AZH too has come back a bit but both remains near their highs.

It will cost me a lot to exercise my PIROA at 20c each. With such a marvellous performance, I would have to find the dough to exercise them! GRY is stalking PIR but not taking it over... yet.

FML

http://minesite.com/news/focus-minerals-is-following-in-the-footsteps-of-an-illustrious-predecessor-with-its-work-at-treasure-island

One of my top tipsters, Our Man In Oz, explains why some CEOs are excited by 'ppb of Au'. I put in a bit below 5c but didn't get any FML today. Who knows, some desperate investors might sell tomorrow.

AUD and POG have stable for at least a week now. For me, gold stocks are still at the top of my lists. When you finally see their profit announcements, then the market will move into the producers.

Shale Gas

I moved too early but there are some that have flown, like SXY. However, interest in CSG and shale oil and gas is starting to hot up with takeovers. And some rising without anything obvious.

When the US and UK companies start to take an interest, those neighbouring tenements are becoming 'noticed'. While gold producers/explorers and potash explorers have given me alpha, this is the next sector that will get very hot soon. Even lesser known ones are attracting attention, like WCL. I will be on break even with a take over at 65c but it has risen very strongly in the last month. I just didn't know when to buy again because lots of my top-ups in shale gas companies have not resulted in rise in share price. But this is about to change...

NYO

With so much gold... in Ethiopia and a good score when drilling, you wonder why the share price is falling.

http://www.theaustralian.com.au/business/opinion/middle-east-troubles-help-fire-up-interest-in-local-phosphate/story-e6frg9ex-1226275137449

Much of RB's article is on phosphate but there is a far bit on Africa. I am pretty sure that Chinese companies will mop up more Aussie ones which are only interested in short-term gains. China is the largest gold producer in the world but the consumption is high too.

Ag stocks - SVL and IVR

While IVR has gotten to 150% profit for me from 2007, including top ups subsequently, SVL has been a downhill course for me. But SVL is the silver stock you want to invest in. It has been announcing good drilling results but the market totally disregards it.

There is a gold:silver ratio of about 50 traditionally. At USD1700/oz for POG, then it should be USD$34/oz for Ag. It is USD$33/oz at the moment. At least with Ag, there is an industrial use for it.

Gold stocks

China is buying up gold. It does not matter that Warren Buffett thinks that it is crazy to invest in gold. What is important is to sell BEFORE China decides to sell the gold hoard. That is a $64 billion question.

If it hadn't been for gold stocks, I would not be collecting alphas. Alan Kohler is railing against bank stocks; too many stupid politicians and media interfering from all parties. Many ignorant voters are easily swayed by the large absolute profit figures. Many citizens can be persuaded by media's bank bashing.

One issue that I absolutely agree with Warren is never invest in airline business. Big investments required, with many uncontrollable factors, politicians sticking their noses in, unions to content with and... very small profit.

Yet there are still some gold stocks that have been left behind. The worst is RAU because of the far-left government in Bolivia. Leftist policies are always popular with ignorant citizens until the country becomes near bankrupt; history is rarely learned. Funding is difficult for explorers and producers in Africa and South America. I am watching BSR, AVA, DRA, CGX, RMS, FNT, OYM, RMS, KMC and VKA. And I always have time for ABU.

AZH

Today, AZH overtook AGO (or rather GIR) or EXT as my best buy. It owns huge tenements in Guyana and is expect to uncover a lot more gold. You can bet that someone with a deep pocket is going to buy up this stock soon, purely for its potential based on what it has already uncovered. What I hate is... this buyer, most likely, won't be an Australian company.

I have a few horrible ones today but compensated by some very goods ones. Consequently, I have collected alphas again today. Both PIROA and AZH have rocketed up my list of top dozen investments. I daren't recommend them because of the jump. But then, few people heed my recommendations anywhere!

Lately, I harped on KMC and ABU but these stocks have not performed according to my script. I have also maintained that the best time to buy is when investors don't want them. In the last 2 days, the market did hear me!

TAS

You will not know how this stock will perform... until its deep drilling results are done. Remember, the explorers of Olympic Dam gave up before drilling one more hole and discovered the deep bonanza.

Why would RIO bankroll TAS if it doesn't not think of the positive side? I topped up at the recent low of 11.5c, picking up the parcel over a few days. Now it is 13c but I am not count my chicken yet. The drilling results will take a long time to materialize.

KMC

Based on what I read some time ago, KMC is so cheap as a gold producer. But someone in Hotcopper said its processing cost is hidden in its quarterly report and is too high. I had been topping up at over 5c. But when it fell to 4.1c, I picked up some shares... with regret.

That is until today. Suddenly one investor started buying up big and the share price has jumped to 5.2c. He has obviously read the same article as I did!

PIROA

How can it not be due to insider trading? The difficulty is to prove it.

http://www.asx.com.au/asxpdf/20120216/pdf/424d3vj2vrl18t.pdf

The share price has been going up ahead of this announcement. This is so unfair that I hope the ASX can catch the culprits. When the announcement came through... the share price fell! So those cheaters have fatten themselves already.

Greek dump

The market sentiment around the world continues to be driven by Greek ineptitude and lack of will to confront the real dump in standard of living. Hence, I will be cranking down my buy price to account for more idiotic sellers who are indiscriminate.

FML and ABU

http://www.asx.com.au/asxpdf/20120216/pdf/424cy0bvpd324v.pdf

FML (I hold some shares in it) is excited about discovering >50ppb of gold. This is almost next to nothing compared to ABU's trenching result.

PIROA and BSR, ABU

I cannot understand why one stock jumps and another wallows (BSR). A stockbroker made a strong case for PIR and away it went. But BSR has been producing decent drilling results. Yet, it continues to tumble.

I won't be buying any PIROA as it has bolted. But why BSR and ABU continues to tumble? That I cannot comprehend. At least with ABU, I am onto profit. So this evening, I will put a buy on BSR at 3.8c.

AZH and ABU

I like to harp on stocks that perform according to my modus operandi. This one is a classical. Rather than repeat what I have been written about this stock, just do a search within this blog and you will find the details.

http://www.asx.com.au/asxpdf/20120215/pdf/424cllb8npfv1q.pdf

The profit has been massive. When the two parcels are combined, it is bigger than my RIO or BHP holdings. This is only early exploration phase. I am very lucky with this stocks, not because of luck but because of unbelievable selling by idiotic investors. The SPP was cheap, too, relative to its current price and I bought whatever I was entitled to buy.

By my prediction, the next big gun will be ABU. The ex-biggest shareholder is an absolute dill. Why it sold at 5c last week..... I have no idea. If I am a shareholder of that stock, I would certainly swear at the management. But it explains why the share price continued to fall in spite of good trenching results. Maybe, that shareholder knows that the trenching result will not be duplicated when they drill INTO the ground. I put another buy at 4.9c to catch another idiot who wants to sell!

EXT

Like many other things, the value of Australian stocks is not appreciated by local investors... until an overseas company lobs a bid.

While I have made a beautiful profit out of EXT, I would have preferred stupid RIO to buy it to feed its uranium processing plant in Namibia. Very dumb CEO.

This stock is one of my best performers so when it is gone and the cash profit is realized, the performance of that portfolio won't look that good! But cash profit is the most desirable...

ABU

http://www.asx.com.au/asxpdf/20120214/pdf/424bhqnkl9syjs.pdf

After such a stunning presentation, you wonder why its major shareholder sold out its 19.9% holding yesterday. It should have taken over ABU to feed its gold processing plant nearby. Sometimes, you wonder how management think.

Even worse, you wonder how investors think! It is still hovering way below its peak. And in spite of repeated good trenching results, the stock has been ignored by the market. That is great for me, I have been topping up!

Futility of gold

http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=145263&sn=Detail&pid=92730

I have stopped following Warren Buffett's principles a long time ago. Why? I don't have his patience, his brilliance and his resources. He does not just invest; he buys up management. Other mortals can only invest and hope for good management.

It is true that gold is pretty useless technologically and scientifically. Yet, because there is so little of it, Warren has forgotten that for thousands of years, it has been used to represent value. If someone can manufacture it cheaply or materialize it in huge quantity from somewhere, then its value will plunge and no woman will want to wear a cheap metal on her body. But until that happens, gold will be used to represent value.

Greek bounce

Don't believe that everything is rosy just because the markets reversed when the Greek parliament passed the austerity drive. The underlying problem hasn't gone away. A Greek bounce is the same as a dead cat bounce. Greeks are still on the street and not working.

Whatever you do, do not borrow money to buy equities. This is greed and gambling. Until you can see real recovery, it is a purely speculative to invest using debt. It is impossible to find the trough in any cycle. I only invest using money that I earned or from recycled stocks.

Shares are cheap?

http://www.theaustralian.com.au/business/opinion/even-a-muddle-through-would-be-good-news/story-e6frg9r6-1226264060412

I don't like this kind of articles. It is an opinion. As a lay investor, it does not tell you what to buy so I find it frustrating. But I have laid it here to highlight the fact that it is important to buy cheap stuff that people don't want for whatever reasons.

IGR had a good announcement last week... and the share price fell by 0.5c. ABU continues to extend its surface gold and the share price is stagnant. For those who cannot take risk, consider what the banks will pay in dividends (with imputation credits) relative to you parking your money in them and only earning miserable taxable interests); even my late father knew that.

RB's Pure Speculation

http://www.theaustralian.com.au/business/opinion/east-africa-oil-projects-is-next-on-the-radar/story-e6frg9ex-1226269155662

I am a fan of RB (and Our Man In Oz). But the market is not. There usually isn't the same price movement compared to DH.

I hold a lot of stocks that he recommended. Of those in today's column, I picked AZH a long time ago when it wasn't even AZH. In fact, I was repeatedly knocked back when I bought into the IPO and subsequent SPP raising. However, I bought them on the market when the share price fell below the issue price! Consequently, when combined (I have separate parcels in two entities), this is now one of my top 10 stocks.

With the oil explorers in East Africa, I just have to wait. FAR was a big disappointment when it failed to find oil off Senegal so I ditched it at a loss.

Held to ransom by a sloth

Crazy! How can the world markets be held down by Greeks in Greece who do not want to work? Is the whole world indebted to them for pioneering democracy? Its economy is only worth a moussaka on the world stage.

When the Thais were severely affected by the Asian Financial Crisis and it was the first domino to fall, the citizens didn't hold their parliament to ransom, nor did they strike, nor did they wait for others to do things for them. Of course, they had outside help but they accepted it and took the bitter pill and went back to working hard like before.

The best cure for the Greeks is to let them rot. European Union will just have to carry on without a sloth. The Greek politicians are only interested in their own re-election and EU is only interested in survival of the Euro. And the Greeks? They are only interested in getting a nice pension; early, large and for long, paid for by someone else.... other lazy Greeks and hopefully, other Europeans.

IGR

http://www.proactiveinvestors.com.au/companies/news/25159/integra-mining-intercepts-6m-at-864gt-gold-and-11-copper-at-imperial--25159.html

With a good announcement like the above (8.64g/t, not 864g/t), how can the share price fall? Yet, there are incredible idiots selling the stock, purely on market sentiment. Who are these fools who are managing the stocks?

It is immaterial to me because I am not buying nor selling. Those who bought when I highlighted IGR would be happy. I am onto >80% profit. I also bought 2x1 oz nuggets of gold from them at their first pouring at around USD$1400 per oz about a year ago. Of course, I wish I bought more!

IVR

Plenty of promises, then it nearly died and then it found silver. Today, in a down market, this stock jumped 38% and it is not a low volume trade. That usually means that someone is very interested in taking over the company.

Or there is inside information regarding more Ag to be uncovered.

It pays sometimes to persist with loss making companies! Once upon a time, it used to be a uranium explorer and then it changed its focus. Now I am up >2.7X since 2007. This is one of my very few very profitable stocks bought just before the onset of the financial crisis.

POG

There have been some gold bulls raving on about POG hitting USD$2000-3000 in 2012. Of course, it may hit that level but it would have to be mad bulls that cause the bubble. As long as it can remain just over USD$1700 without AUD appreciating further, I am more than happy. A lot of my gold producers have production cost at under USD$1000 per oz.

Gold has always found its own level and bulls and bears can only affect the yoyoing but over the long term, its value will find its own equilibrium, free from those animals.

I have been collecting alphas recently mainly because of gold stocks in my portfolios. While the value has fallen today, it has fallen a little less than market average.

NCM

I don't own shares in NCM. Today it announces a 50% jump in profit due to rising POG. Do you really need the ASX announcement to know that? The share price got a lift because of this news. I could have told you a long time ago!

I don't hold NCM because there are better gold stocks to invest in. But if you have millions of dollars to invest, then this is one of the stocks you should have ownED.

There will be more profit announcements like that. History is repeating itself. It happened in JSE a long time ago too with a delay in the rise of gold stocks when POG had already gone up earlier. It is unbelievable that fund managers could be so slow. Slow mentally, and slow in response.

GOR

What a savage reaction to an announcement this AM! People are expecting huge thing out of this stock. But the announcement only refers to one area where they are going to start mining to fund exploration in the same region. These sellers have to have their heads examined.

http://www.asx.com.au/asxpdf/20120210/pdf/4248kp5ty8ch14.pdf

I have no spare cash as it is allocated to SPP (30c) for RIA (currently at 39c).

ABU

I have held RIO for a long time so there were cheap stocks and expensive stocks in the mix. Today, I sold some of those bought via DRP, all at a loss. This is to fund my SPP for RIA... and I can't resist topping up ABU. So much gold on the ground, yet shareholders are selling!

Either they can see something that I can't or their fathers didn't send them to a primary school.

Tin stocks

These must be falling! That is in spite of tin price not falling.

I have picked up more shares in KAS and VMS over the last week. I put a low bid when RB wrote about them. Before I knew it, I have collected them.

Bad day on the market

DJI is near unchanged. POG is down a little. The latter is more significant although since the AUD has fallen back below USD$1.08, the POG in AUD is relatively unchanged.

Still, the market likes numbers, not computation. Yesterday, I had lots of alpha, with courtesy to AZH, GOR and IVR (Ag). By the law of average, I expect it to be negative today.

What I find amazing is ABU is still wallowing in spite of multiple good trenching results. I remember attending one Proactive Investors conference. The CEO was very excited about gold grades at under 1g/ton at the surface. He said that it was because it "indicates" underlying gold and suggests that the direction for drilling is correct. Those at Old Pirate tenement are recording over 20g/t, with only a small area drilled.

Good day on the market

Today, the stock market went up by 18+ points. That means under 0.5% rise. Why do I call it a good day? One portfolio went up by 1.98% and the other went up by 1.2%.

POG went up so my numerous gold stocks obliged. Why investors function day to day, I have no explanation.

But note: ABU had a good annoucement, extending its surface gold by 102m. And the share price at close didn't move at 5.6c.

What are investors doing?

AZH

This was a stock where the management was so arrogant, refusing to accept my payment for new shares because I was not quick enough. As a consequence, only WA investors got most of the shares. However, when the price fell below the issue price, I made my move into this stock.

And then more top-ups when the price dipped with good news. Bought on SPP and when no one wants it at <=20c, all within the last 18 months.

Nothing new about this strategy. Now, the market is fully aware of this stock. Lots of people have written about it and its huge tenements. Historically, it was linked to West Africa but with the continental drift, you now have this real estate on South American soil! This few months, it has been rising and rising. It is now one of my better performers.

Because I have 2 separate parcels, it is a significant chunk of my portfolio. I last topped up in March 2011 with the SPP at 19c. While it has been difficult for me to buy more because since then it has been going mostly up.

ABU

In the last few days, ABU has hovered down to 5.6c. You really wonder what idiots would sell this stock for this sort of price. It has been announcing fantastic trenching results. If this were to be 100-200 years ago, it would have sparked a massive gold rush from all over the world!

It hasn't finished exploring yet. Trenching is not indicative of the total amount of gold in its tenements. But what it shows is how superficial the gold is. At impossible depths, the gold grade is already excellent. But at Old Pirate, it is on the surface.

Anyone who reads my blog is truly wasting his/her time if they are still waiting around for smarter idiots to sell their parcels. POG has gone up today, DJI has gone up today so expect gold stocks to outperform the general market.

I bought another small parcel of ABU this AM at 5.7c. The worst damage I have done was to buy at 7.3c in Nov 2011. I was the foolish buyer but I am there for the longer term.

AUD

Bad news that AUD is rising in value. Must prefer it closer or below parity with the AUD. One currency that I have been following closely is the Swiss Franc CHF. If you want to know your real standard of living, this is the one to compare with.

At one stage, it was used for hedging, much like gold but the Swiss government had restricted the use of its currency for that purpuse. It is not far from parity with the AUD. The CHF has been appreciating against the AUD but lately, it is moving towards parity; probably a reflection of how bad Europe is.

PIROA

When I took over my stocks that were managed by Citibank, they were large parcels. Hence, they were within my largest top 12 largest stocks. AGO, which took over GIR, was the only parcel to make it into the upper top 12 and two others made it into that list. However, over the last 2 years, things have moved.

AZH and GOR have moved up into that band, and today, for the first time, one of those original big parcels have been displaced by PIROA. STO is stagnant so it got displaced into number 13.

PIROA is discovering more gold in West Africa but more importantly, a shareholder with a deeper pocket is moving into its share registry. When others are interested, the share price often jumps.

BPT and other shale gas/oil explorers

In Oct 2011, BPT share price has come up but in spite of good announcements, it 'languished'. Hence I topped up at $1.13. Last Friday, it was at $1.55. I collected BPT in two portfolio, one rising over 100% and the other over 70%.

Shale gas and oil are big news in the USA. It probably explains why the USA is starting to come out of its doldrums. No one seems to have given credit to the cheap, widespread and abundant source of energy. There is even potential for exporting but gas is expensive to transport as liquefaction is required to condense the volume. And you need special containers and storage facilities.

Having saturated the American market, proponents of shale gas are starting to move downunder. BG has just moved into Drillsearch.... a partner of BPT in South Australia. This must be the reason for the revaluation of BPT. I have been topping up many times now and glad that I have never sold any even when it kept falling. The wildcard is China... it has the world's biggest estimated reserve of shale gas and it has already been successful in Sichuan at exploration.

In Australia, my OBL has now just gone green. CTP is still underwater, but I suspect not for too long. COE is marginally positive while ICN is still a loss but recovering. MMR was murdered after failing to find the much hyped oil and gas in Sydney Basin.

POG

I have been watching the POG in the last 2 weeks. I never expected share prices of gold producers to reflect the rise. What I pondered was, how long before it tumbles.

POG has a momentum but market valuation of miners is sluggish. Buyers of gold become lemmings and lemmings have no brakes.

Suddenly, a seller (hoarder, gold merchant, central bank, desperate investor) will dump a whole lot into the market to capitalize on the rising price. That will get absorbed again after the POG has fallen far enough.. and then the lemmings start to run again.

The big rise in markets around the world last night has given rise to some optimism about the stock markets. Yet the uncertainties are still so profound. Greeks are not going to turn into Thais overnight. Certainly, not into Chinese.... those in Greece are living on debt, overpaid and not diligent enough. Maybe it should try Communism.

RAU

The moment you have political interference, it is very sombre news. Almost a graveyard visit.

There is conflicting reports about Bolivia. The government is leftist but recently it realized that you cannot run a government and keep your citizens who voted you in happy... unless you have a budget to spend. Bolivia is not rich in entrepreneurs nor technologists. Neither is it endowed with agricultural richness. But it has mineral wealth. It requires wealth to extract that natural resources.

Foreign investors have been leaving in droves. Likewise, Hugo Chavez's Venezuela (with the largest oil reserve in the world) is poor. Far left government usually ends up in poverty because no human beings want to work for nothing especially if you get something for not working. And the same is given to you whether you work hard or not.

RAU pulled out today, citing uncertainty in Bolivia and pending government announcement regarding its new mining rules. It has been in South America for a long time and must be well-aware of what is going on. Luckily, I didn't top up recently. But if the ruling in Bolivia is favourable, then RAU will explode. I am not optimistic though.

PIROA

Today, the placement is at 76c but instead of the usual fall in share price, it went up! Placement is the most disgusting instrument for raising cash in the market because it is extremely unfair. Why the practice persists, I do not know. But then I don't take the effort to complain to my MP.

But today, with a rise in PIR share price AFTER the placement, my PIROA had a nice rise, too. Soon, when I exercise the options, it will move into my top 12 stocks in my super fund.

Lots of West African gold miners do well but some do languish. But why they languish can be very different to understand. A good example is BSR... every time I top up, it goes down!

PCL

This is a stock that I have been buying since Apr 2009. My last top up was the most expensive on the 8/8/2011 was at 9.3c. Markets were tumbling at that time. Previously it as between over 1c and 4c.

There is still only hype but there is now another steady rise. The big boys have been farming into PCL's tenements. The drilling is still very slow off the mark. It is nice that it went over 11c today.

PIROA

I never understand why idiots sometimes sell off this stock. It has been consistently producing good discoveries of gold. And then today, another great announcement... but I think it is infill drilling results. Still it confirms that it is less likely to be sampling error or just a thin vein of gold.

Yet if you follow this stock, in a few days' time, after a rise today, it will drift downwards until market sentiment or further good announcement pushes up the price.

I bought the options, hence, my gain is even more spectacular. But for novices, beware. Options can be a financial disaster, too if you don't understand them.

CDU

Gina touched FXJ one evening recently and it turned it into gold. When she touched it, she had already increased the share price after the market closed. When the other investors found out, of course, FXJ had already turned into gold. FXJ had been falling hard until someone smelled value and someone smelled 'influence'.

Meanwhile, a weird mob M & G Investment Management has just announced that it has increased its holding in CDU by about 1%. If I am not mistaken, it was bought via a placement at $4 when the market price for CDU is around $3.60. The odd thing is why pay more than 10% when you can easily buy on the market for less? I believe there is another party involved in the placement.

The good news for existing shareholders is that someone recognizes value!

ALK

I bought this stock near 3 months ago after reading this article:-

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

I especially like the gold producer bit. And overall, it looks like it has a lot of this and a lot of that. However, the market has gone very bad over the last quarter. For ALK to fall, it was dictated by the rule of average. It is stock worth considering but I prefer stocks that have fallen harder.

Simple rule of investing: Buy whatever idiots are selling whenever idiots should be buying.

EXT

Looks like EXT will be a Chinese company within the next 6 months. RIO has sold its holdings to a Chinese company. EXT has reached a phase in its cycle where it is unlikely to perform like it did in the past. I bought it when it was very cheap so I had a good run. There won't be a big premium now that RIO is not interested in EXT.