The Chinese are coming, the Chinese are coming! And the Singaporeans...

http://minesite.com/news/that-was-the-week-that-was-in-australia-352

The Chinese are coming?  I am already here.

Perhaps they are referring to the Chinese firms with billions of USD in their pockets.  And watch carefully, the Singaporeans think like me.  And they are moving in much more quietly.  There are huge numbers of undervalued Aussie stocks that Aussies don't want that others desire.  Barnaby Joyce is making very loud noise, rightly but for the wrong (political) reasons.

I was thinking about PEK but perhaps I should just go for GGG....  if you read that article by one of my favourite commentators.

PVD

In a clumsy market, I take great delight in writing that PVD has jumped 164% since I bought in 12 June 2012.  That was after a Proactive Investors Forum in May 2012.

While ELK and HDX went up shortly after I bought into them, the share prices have drifted back to just below my buy prices.  I would hold off buying for a while unless more idiots appear in the market.

I also bought CDU recently with its good announcement but the share price has been tumbling.  I am tempted to go back for more....

BDR

I will repeat my adage.  If idiots want to sell their shares at a lower price after a good announcement has been made, they deserve some help.

So recently, I picked up some BDR shares at 79.5c and I wondered how I managed to do it.  I am not here to question but to cherish the rise to 98.5c today.  That is over 20% rise in just over a fortnight.  And to give thanks to the unknown idiots who sold their shares cheaply.  You can understand if they sold before but, after?

And I assume no one followed my path....

Odd runs

CDU had a good announcement and the share price kept falling, including today.  And BRU went down first before it went up.

In South America, the copper mines are huge but the concentration is low.  In CDU's tenement, sometimes raw native copper metal is found.  Yet, there is such negative sentiment towards this stock.

BRU

This stock has only moved very little since I bought.  Yet there has been good write up and even better still, successful drilling results.  It has found extensive "strong" gas shows, warranting further operations.

Today, I topped up because this is one of my adages in investing:   Buy when the share price is falling on good news irrespective of market sentiment.

Capital rasing

Whenever there is a trading halt, and the announcement says it is for capital raising, then it means small shareholders are fucked.  The system is so inequitable with no provision for the less privileged to partake in it.  Luckily sometimes, after a placement, the share price falls.  But usually, those people/institutions get to dump those shares acquired for a profit.

Today it is GGG's turn to screw the small shareholders...

European woes

When the Asian Financial Crisis struck in the late 1990's, the Asians didn't protest on the street.  They took the punch and just went about working.  Most didn't decline taking IMF's or World Bank's bitter medicine.  Stock markets plunged (but my father continued buying!) then.

But look where Asia is today!

There is little doubt that the European market is huge and that is why its woes is troubling everyone.  So the ASX will also take a hit.... but more a slap than a punch.  China is the real financial big brother for Australia.

Until the Europeans learn that the centre of the world has shifted a bit further East, they will still continue to live like colonial masters, with slaves and colonies working to generate their wealth.  Em... what slaves?  What colony?  They have to work hard like everyone else.  And you have to serve to earn for your services.  Serve properly.

Crazy day...

Some of my stocks went up and others went down.  One thing I am certain about is someone has inside information in PIR.  It takes a while to get drilling results to go from ground to laboratory.  Luckily I opted not to sell more of my options.

PVD continues its merry climb WITHOUT any news other than brokers' optimistic reports.  And ELK has landed back on earth which means it might be time for me to top-up....

I put on a buy for ABU at 5.4c but no one wants to sell it at that price.

PIROA

This option has been rising and rising without any announcement.  And it is now so obvious that it is because of inside information.  I have sold some options but decided to hold off selling more because of what I suspected.  I am not happy about it but neither am I bitter.  This stock is exploring in the middle of a country with a civil war going on.

The USA

The US economy is still way ahead of the others in power and value.  Watch the ASX tumble this AM because of the significant fall in the DJI.  All this talk of the USA losing its dominant position is too premature.  However, it is good that China is rising although there will come a point where rising becomes much harder.

GGG

Because of the spate between China and Japan, I decided to re-enter the market for GGG.  It has one of the biggest REE deposits in the world.  But I am also keeping an eye on PEK.

BRU

BRU also had a great announcement today.  The gas field might extend into the area where its was drilling.  And what happens to the share price?  It went down!  Either some investors are expecting a lot more or the prevailing market sentiment over-rides any sensible transactions.

CDU

Today, it announced another rich deposit.  Yet the share price went down.  I used to buy CDU every time there was a good news and the share price went down.  I have spent a lot on CDU and I hope it will become a great investment.

Today, I picked up another 500 shares at $4.81.  The announcement has only just came out.  Why people want to sell on good news always puzzles me.  But I am happy to be of help.

PEK

At the recent Proactive Investors Forum in Sydney, I was impressed with this company's CEO.  Today, you will hear about the spate between China and Japan.  China is threatening to withhold sale of rare earth elements to Japan as a punishment over those tiny islands in territorial dispute.

Hence, Japan will have to seek a more reliable source.  Already ALK has benefitted but another company with the right mix of REE is PEK which is at its low.

Discoveries

Discoveries are extremely important announcements for any small prospecting stocks.  For SIR, it has been a phenomenal rise with hits after hits.  However, for me, you won't know when it ends and you could be the last one in.  I prefer to buy stocks with great prospect before others find out or where the discovery has been announced AND the share price then drifts downwards for no obvious reason or where the share price has not risen much to reflect the success.

MAT has been wonderful for me but only recently.  I didn't buy it last year because it was near to SIR's tenement.  Now I am onto 40% profit (bought in March 2011) and if the impending drilling discovers an extension from SIR's super Nova deposit, then this stock will go ballistic as well.

Other than O&G explorers, the one I am waiting with baited breath is GTE's tenement next to SFR.  The initial survey has shown a possibly bigger deposit than SFR's.  But instead, it went to Kazakhstan and discovered a rich mineral deposit which the market is not too interested in except on the few days when announcements are made.

Shale gas exploration has not really blasted off in Australia.  Yet the amount of hydrocarbon present is supposed to be huge.  I have positioned myself very well here.  Most have gone positive but there are still a few laggards like STO, BKP, MMR, KAR, MEO and ICN.  A few overseas O&G ones are still underwater like RIA, CEL, OEL, ROC, NGE, FAR (sold) and NDO.  However, I can say that OSH which is one of my early stocks, is now doing well in PNG and now bigger in value for me than WPL, BHP or RIO.

CGX

Am I dumb?  A Canadian gold company has bid for CGX using scrips-only offer.  It is worth over $3 yet investors are selling at under $2.70.  I don't know whether I was smart or stupid to collect a top up of 1000 shares at $2.69.  This kind of bid takes a long time to materialize due to formalities.

HDX and ELK

At the last forum, I liked HDX best.  The business model and management seem impeccable.  But in fact, it was my other investment, ELK, that jumped within 2 days by nearly 20%.  This mob used a recent but not new technology to extract the remaining oil in the ground.  The method has been around for a while but you need access to carbon dioxide source (in the ground) and a pipeline to the oil field, and machinery to force the oil up to surface using the compressed carbon dioxide which is recycled.  Fracking is a more recent trick.

I have not read about this process but I suspect the CO2 is extracted, pressurized (?into liquid or solid), and then expanded (?by heat) to push the oil to surface.  The gas is recaptured and recycled.  As the oil is pushed out, some CO2 remain in the ground to replace the volume of oil extracted.  Not all the oil can be extracted by it gives the 'exhausted' oil field a new lease of life.  Interesting but Uncle Bob might not like it.

ABU

What is going on at ABU?  When share price rises quickly, it can be a sign of impending disaster, especially when there is no more stimulus.  Maybe someone who thinks like me knows that it is good value for money.

I have bought ABU at 7.3c in Nov 2011. But that is the highest I have paid.  This is the only parcel that is in the red.

I think the Chinese will soon smell this stock and take it over.  How can a stock that keeps finding good/better gold deposits continue to linger below 10c?

Proactive Investors Forum

Of my recent research, the most productive has been from Proactive Investors Forum.  Since May 2012, I have had a very good run with stocks that I learned from the meetings.  PVD has doubled so it gives my overall performance a very nice tick.  Also ELK and ABZ have gone up while HDX and NWE has gone slightly positive.

ABZ was bought when my lowish bid was successful after it dropped nearly 20% from just after the meeting.  However with ELK and HDX, I bought virtually on the market as I like both these stocks.

PIROA

Don't buy this stock unless you know what is going on.  Share price cannot rise and rise without an explanation.  Maybe it is inside information but that is illegal.  Or maybe someone is manipulating the share price and taking in suckers.  I have sold one lot, followed by another lot of PIROA and still there is no good news but the share price continues to rise.  I have recouped my capital cost with profit to pay for exercising the options.

Mali is now a very dangerous country to invest in due to its civil war.  So don't pump any dough in here.

PVD

More hype this AM.  A consultant company (paid for by PVD) has told PVD that there is a better chance of oil being found in large quantities at its Moroccan tenement so the share price had another lift.

This stock has run quite hard.  And if a good JV partner moves in, it will jump higher.  Should you jump in now?  Only god knows that answer if one exists (I mean god).  But you should have followed me in June 2012 when I made the plunge.....  More than 100% profit since mid June 2012 :-)

PIROA

I sold off another tranche of PIROA.  Bought at 30c in April 2011 and sold today for $1.305.  That is a cool nearly $10,000 cash profit (before tax).

I don't like the fact that PIR is mining in Mali where there is a civil war.  The mine is on the western side where there is a less trouble.  Since it has grown a lot and since there is unrest there, I decided to take some profit.  I have already retrieved my capital cost for PIROA with the larger first tranche which I sold recently to generate cash to exercise the options.

Sometimes I feel smart... but PIROA profit has to compensate for some of my losses from other stocks :-(  like CLR and CKA.

Oil explorers

By right, all should fall today as POI has been falling.  The Yankees are using more shale gas and recovering more oil as well from the shale deposits.

By right, I should trade with oil explorers.  It is all hype.  Then there will be JV activities.  Then there will be exploration (drilling).  I should sell when they jump up and buy when sensibility returns.  But that is too tedious.  The pudding comes when oil is found...

SLX

The fourth generation of technology for uranium enrichment comes from surprisingly... Australia.  This used to be a branch of Sonic Healthcare!  SLX has since branched into solar panel (unsuccessfully competing with the Chinese) and uranium enrichment.

The technology has captured the keen interest of GE and Hitachi which are paying for the intellectual rights.  These big boys have funded the cost of further research and have got approval from government agency for large scale production.

Now if Australia wants to enrich uranium, it will have to pay the Japs and Yanks who then pay a small commission to SLX.  Small commission.  Where is Barnaby Joyce?

AZH

AZH has restored my faith in the Continental Drift theory.  While it has consolidated its position in Guyana and recently announced some good drilling results, the rise in share price has been quite relentless in the last month.  Why?  This is the idiosyncrasy of the market.  However because its share price has fallen from a lofty height, I am not going to question its movement.  Because I have 2 parcels, when combined it is bigger than my investment in BHP; used to be much bigger!  Today, it is probably the sole reason why I have collected alpha other than SLX.

Proactive Investors Forum

Has it been beneficial to attend these forums in Sydney?  It takes 2.5 hours each trip, costs $12 for parking and we eat at nearby restaurants at about $80 (including leftovers).  The meeting last about 2.5 hours from 1730h to 2000h.  For 10 hours work since May 2012 (2 cycles), it has returned over $8000 paper profit.

Yesterday, it cost me another cycle and I have just bought HDX and ELK.  I hope to make profit out of my time again but it is easy to gain when the ASX is rising.  Of course, there have been losses too.  IMA was once profitable but it has tumbled as it is still an explorer and the price of mineral sands has fallen.

ELK and HDX

After attending the Proactive Investor Forum, I usually have an idea of what stocks I like.  Most are either 'interesting' or have good prospect.  HDX looks like a good long term investment in spite of the coal industry taking a downturn.  I suspect today's buying were done by people who attended the forum yesterday.

And likewise, with ELK, there must be a few people with a deep pocket who bought into this stock too.  The rest of the stocks that were presented yesterday can wait.  ELK is producing oil in the USA while HDX looks a good safe bet for the next few years.

I sold off CAP, a stock I picked up when GIR floated it.  It used to be a lot more profitable but at least I have not made a loss out of it other than due to inflation.  Iron ore explorers are not the flavour at the moment as China winds down.  There are better producers in the Pilbarra so I am staying away from Fe ore minor miners.

I must be the FOOL of the day as I am buying on a down day... but I am picking up stocks that went up.

Prosperity in the USA

The USA is still the richest nation by a big margin.  Yet, many of its industries are dwindling, mostly hostage to expensive oil and cheap labour cost in China/India.

However, in the last year, things are changing.  The price of energy has fallen due to shale gas extraction.  This used to be difficult until fracking technology came along.  Suddenly dry (ie no oil) gas miners are no longer good investments as the price of shale gas plummeted.  There is so much gas under the ground in USA that BHP had to write off billions from its interest in the USA.

And in the mean time, the labour cost in China and India is going up.

Today, RB suggests that maybe it is time to look not north buy north east again for Australia.  There are many minerals and raw materials that the USA imports 100% of... that Australia has abundance of (bauxite, tantalum).

Tin

Looks like tin could be the new gold.  But tin mining must be expensive.  It is not common and it exists in very low concentration.  My tin stocks have not made me super rich.  But I am sure, in time to come, it will rise.  There are very few big producers outside of China, Indonesia, Peru and Bolivia.

BHP... and HDX

This AM, I read that BHP is going to shell one of its coal mining project in Queensland.  That is not surprising.  China is winding down, not winding off.  Like all politicians, Campbell Newman in Queensland is ripping into the boom time in the resource sector.  Politicians will squeeze the udder of a cow until blood comes out before they can realize that it has been traumatized.

I am hoping this means HDX share price will fall.  However, the CEO who presented last night told us that if he didn't win anymore contracts for the next 2 years, he will still be very profitable from current contracts.

If I invest in a stock like this, then you have to trust that this director is honest.

The ASX yesterday...

In the AM, the ASX All Ords was drifting downwards.  By the afternoon, things changed.  Because I have no access to financial institution reports (GSJBWere does not treat me as a premium client!), I could not find the reason why.  Hang Seng and Nikkei were both racing away too but Australia was the tortoise.

And then this morning, it became obvious that Australia is further from Tokyo than those 2 markets.  The Japanese Central Bank is also printing money....

... I think our Reserve Bank should also invest in a good printer.

CGX

The Canadians are coming, Barnaby Joyce.  But you won't hear a word from him.  He only fears Orientals.  Somehow, Orientals are far more dangerous to the Nationals than lazy and arrogant Europeans or patronizing Yankees.  The Japanese and Koreans are just tolerable provided they don't intrude into farms.

This AM, I learned that there is a scrip-only take over.  I am not crazy about that as it means I have to deal with a Canadian stock.  When it comes to gold, it does not matter which stock exchange the stock resides in.  The POG is the same worldwide.  So why would I want to have issue with a foreign investment?

That means I won't get the full premium.  However a rise of over 35% from Aug 2010 isn't a bad outcome at all.  When a takeover announcement is made, it sometimes takes 6 months to a year before you see the implementation.  But in the meantime, I hope for another bidder to come in.  This one is a friendly takeover so nothing else might happen.  As usual, I feel the premium is not adequate but there are many short-term investors who are happy to take profit and run.

Did anyone notice that the share price of CGX had already been running very recently before the takeover announcement?  How can there not be insider information?  Bastards!!!

BPT

It doesn't matter that it is a small dividend, about 1% yield.  What is absolutely delightful is that, this is mostly an oil and gas EXPLORER.  It has been successful at exploring and now producing from some of its fields and giving dividends!  Already, it has flagged a bigger profit yet the share price rise has not been spectacularly.

I bought more in March and April 2012 but these were at a higher price (1.40 and 1.53).  My last top up was on 31/8/12 at $1.175.

CDU

Late this afternoon, just before I left the house to go for the Proactive Investor Forum, I looked at ASX announcements.  I saw what I like - CDU hitting raw copper near the surface.  That of course is phenomenal grade.  But it isn't the first time CDU has performed such miracle.  In fact, that was why the stock was punished because the JORC resource didn't meet up with investors' expectation after announcing a few "native copper" hits prior.

Immediately, I put in a bid for $4.82 per share to top up my holding.  By the time I finished entering my bid, someone has put a sell in for $4.80 so I got mine at a cheaper rate.  The seller probably didn't read the announcement!  Of course, nothing happened for a few more minutes before the share price started to rise.  I am glad it closed at $4.92; that is 2.5% profit within an hour.

Proactive Investor Forum in Sydney

Some stocks you just watch as nothing much is going to happen.  Until RMX drills into the deep gold vein and uncover a large deposit, nothing much is going to happen. AQC and SRZ are going to take a while before they can generate a profit out of their assets.  PEK sounds great but the process of negotiating with the buyers of REE ores is going to take a long time.

ELK is very interesting in the technology it uses to extract oil in the USA.  It is a stock I think has potential.

The only stock that I would like to buy is HDX.  It isn't a miner nor an explorer nor a driller.  It is a coal mining servicing company, the biggest blaster in Australia.  It earned AUD$8 million last year (PE = 4.5) and expect higher revenue for 2013.  All the signs are pointing towards a good secure future.  I asked from the floor why if his company is so profitable, with such secure contracts to service the coal miners, why don't the coal miners or mining contractors provide his kind of service.  He gave his reasons but the main thing line is his workers are not unionized.

CGX

I bought this stock in July 2010 at $2.29 per share.  It hasn't been performed according to the POG.  And recently, it had problem with its processing machinery in Masbate in The Philippines.  But I do like the management.  Tonight it is being taken over by a Canadian company.  I would make around 35% in just over 2 years.  It is not great but it is still better than money left in the bank, earning taxable interest.  While capital gain is taxable, it is only 50% of the profit after one year of ownership and because it is in my super fund, the tax is only 15%.

PVD

There is nothing going on but the share price is drifting upwards.  The CEO told me that there is negotiation going on regarding farming-in with interested parties but nothing has been announced.  So I am up on 81% paper profit since 12/9/12 and that is sweeter than crude!

WHN

At last, I am back to neutral zone with WHN after today's leap in faith by the market.  This one is a trading stock; share price will only jump when a JV partner buys into the tenements or when oil is found.  Gas would be of much less value as the Seychelles is in the middle of nowhere and construction of LNG plants would be too expensive.

PCL was bought by me when it was only worth a few cents.  It still hasn't found oil yet :-(  but I have made decent paper profit out of it.

Proactive Investor Forum

This evening, I attend another Proactive Investor Forum in the city.  It is free so there are lots of Chinese there.  But I hate the catering service at the end.  One is hungry after 2000h and the finger food comes out so slowly.  I have complained about it but I am insignificant.  Some investors will try to monopolize the speakers after the seminar.  Most people who attend the forum are not compassionate people; they are there to make more money for themselves.  Like many city functions, when you don't wear a suit and you don't look like a billionaire, then, expect scant or scornful attention but occasionally some CEOs are very pleasant and happy to take my undiplomatic questions, from the floor or at the breaks.  I like to think most people attending are smarter than me regarding financial matters.  Almost all ignore me; thankfully!

Tonight's presentations should be interesting as I know very few of those stocks.  The last 2 forums have been rewarding.  PVD has done well while ABZ has moved a bit.  And NWE is neutral.

China... no Viagra

http://www.businessspectator.com.au/bs.nsf/Article/China-increasingly-unlikely-to-act-on-slowing-grow-pd20120918-Y9PEP?OpenDocument&src=hp6

That is according to this article.  But the writer must be politically naive.  The Communist Party will not survive if lots of citizens are unemployed while it has billions stashed away in savings.  The economy may be down but it isn't in a doldrum.

MAT PXG

SIR share price had a rocket attached to it recently when it discovered a super nova nickel deposit.  Today, I read that MAT and PXG are 2 of 7 stocks with similar potential but not as explosive.  However, MAT is very near SIR.  Its share price has already moved upwards but I bought it for other reasons.  So it is pure luck that it is near SIR's discovery.

PXG was bought because it was a very cheap gold stock with great potential.  Both stocks are now in positive territory but MAT is 'healthier' due to the 'super-nova' charge.

ABU

Performing to script today.  A good announcement, followed by a disproportionately low rise and then the share price falls in a few days after.

If you look at the exploration result, you would think the stock has hit the jackpot.  So either I can't interpret the figures (which look good) or there are some incredible stupid investors who are happy to dump their shares when there is good prospect.

You have to wait for an Oriental investor with a deep pocket to plunge into ABU.  Not Liongold but perhaps a Chinese company who can see value...  Of course, Barnaby Joyce will be screaming his head off as it won't be the Brits or Yanks (who has no money).

TPT

I am right, in fact the share price has climbed 15% to 34.5c.  I expect that to be sustained at least for today.  Why does it take the news of new blood (into the boardroom) so long to filter through to investors is always puzzling, especially when it has been publicized by a few websites.

I first bought in 2010 December and has never topped it up until this month.  Why?  Because the share price has been rising and rising.  Now that it has fallen back a lot, it gave me a window to top up my holdings.  Like all O&G explorers, the success rate is very low but the hype is very pronounced.  The best time to trade is after a massive injection of funds by a JV partner.

TPT

With some stocks, you have overseas markets to guide you.  So if TPT rose by 10% on Friday in AIM, then you know on Monday, the share price of TPT will usually go up due to the demand.

I topped up recently because the share price went down but the boardroom news is considered to be good.  New but experienced blood is entering.  Whether it is really good is dependent on how the share price move in the medium term.  With a small exploratory stock, it relies on a big boy or more taking an interest in it.  The new blood used to work for the big boys.

How to avoid becoming poorer...

Many years ago, when the stock markets crashed in 1987, I learned a few wise lessons but luckily I don't own all the stocks mentioned below:-

Never buy a company where the director names a yacht after his wife.... "Pixie" (Skase from Quintex)
Never buy a company where the director hangs a van Gogh painting in his boardroom. (Bond)
Brokers do not look after you; only their commissions.
One good article does not translate into one fantastic stock.



In later years, I learned that:-

Any stock which grows very fast, financed by debt, will also die very fast when debt becomes expensive or harder to service (Centro, ABC Learning)
Rapid rise in stock value leading to directors earning an even more rapid rise in remunerations, means greedy board (eg Babcock & Brown)
Watch the borrowing... (News Limited almost went under)
Stocks which use tax-free havens to reduce their fair tax can also reduce payouts to shareholders
One big shareholder can mean only one person is very well looked after
Superlative reports generated by the board... but the losses are accumulating year after year means you have been conned
Good ideas do not always translate into profit, even when given a lot of time and capital (Metalstorm, CFU and a lot of biotech stocks)
Avoid stocks where a director buys a football club which is losing money (Tinkler)
Avoid stocks where the government sticks its nose in all the time (petrol companies, bread companies, cigarette companies)
Avoid stocks that sell goods much more expensive than online retailing; they will die a slow death.
Never buy any stocks where they use good looking chicks to sell their shares (Myers using Jennifer Hawkins, DJ.... these good looking chicks become wealthier at your expense)
Nothing is safer than the big 4 banks for the risk you take (Estate Mortgage)
Anything which rises rapidly with no obvious reason will also crash rapidly with no obvious reason
If lots of people are talking about a stock, that is not a reason to buy.
Never dump shares just because others are dumping it... when there is no reason to dump them; lemmings have very small brains.
Fund managers are managers having fun with your investments and very few have long history of success above market long term averages.
Avoid brokers with flamboyant lifestyle (you are funding it... )
Big city brokers only look after big clients.
Governments do not sell stocks for altruistic reasons.

AZM

A 'long' time ago, CDU made its JORC resource statement and the market punished its capitalization because, after all the hype and how good the drilling results were, it was far below expectation.  But it has redeemed itself because with further exploration successes and positive progress made in the production side, its share price has grown.

The first part history of CDU is repeated in AZM.  The JORC resource was way below what was expected so the share price plummeted.  Here you have the board giving you the impression that a large gold deposit has been discovered and then showing much lesser amount of gold present.  While CDU has improved markedly, AZM has not come up with anything positive repeatedly.  Hence its share price is at its low.  We rely a lot on the board to perform and be honest with their drilling results.

Because it has been wallowing in the trough, there is no point selling.  In fact, if positive news appears, then it might be worth re-accumulating... with caution (ie if the market totally ignores it), just like with CDU.  I like cheap entry into any stocks.

BDR

I am glad to report that today, every parcel of BDR that I have bought is now paper profit.  The first parcel was bought in August 2010 at 25c based on a good ASX announcement by the stock with no input by anyone else.  The next piece was in Jan 2011 and that was the most expensive at 86c.  The share price had been falling since then to my lowest purchase price at 52.5c in May 2012.  Each time I bought because of a good announcement... to see the share price fall further.

That is the test of my believe in the company.  This stock illustrates my strongest adage on how to buy shares.  Buy when people are dumping their shares.... when the price of the commodity has not fallen, when good news after good news had been announced and the share prices are falling and falling.

The sad thing is none of my readers followed me into BDR...   I also wrote about this stock as soon as I bought it on 13/9/12 at 79.5c after another good news.  The share price has already hit its trough (52c) around May 2012.

Gold stocks

Isn't it amazing that ABU posts such a great drilling result... and the share price only closed 0.1c higher?  That means there are actually idiots willing to sell when the news is good.

And then CDU found more gold and people believe.

And BDR had already announced and people come forward to buy more.

And PIROA still running up but nobody wanted to buy mine at $1.325.  I offered some for sale as there is no good news but people are prepared to pay a lot for it.

Tin stocks

None has made me a profit.  But a lot of patience is required.  None are in production and the market is manipulated by the Indonesian government.  Tin is only found in very few places.  In soldering, it has replaced all lead.  And in tin-plating, it is almost impossible to recycle it.

Hence, it is a very valuable mineral.  And the metal price is unlikely to tumble unless there is major disruption to world manufacturing.  My favourite would be KAS because of its big brother... Toyota.  To secure its source of tin in future, Toyota has signed up with KAS for its rich Moroccan deposit and KAS is finding more of it!

This note is instigated by RB in his Pure Speculation column in The Australian this AM.  Don't expect tin stocks to jump in value, most investors want their profit today, not a year from now.  Not even a month from now.

PVD

http://www.asx.com.au/asxpdf/20120917/pdf/428r8kb4s0lc70.pdf

This is the first announcement I read this AM and it looks good.  I approached the CEO at a Proactive Investor Forum in May or June this year.  He said that success was about 20%.  Now with this seismic study, it looks better.  He can now charge JV partners more for farming-in!

This is one of few floats in 2011-2012 that made money for investors.  Even when I bought in June, it has already risen.  On Friday, I made over 60% profit; I am expecting a small jump today.  Presumably no reader was brave enough to buy PVD, a high risk stock.  It was THE only stock I bought from that seminar because I like the presentation and... the prospect.

ABU

http://www.asx.com.au/asxpdf/20120906/pdf/428jy76mfl08s0.pdf

When you read the presentation, you cannot help but wonder why major broking firms and share tipsters are not highlighting ABU.  It even won the Best Emerging Company at the Diggers And Dealers Mining Forum this year.

I am reluctant to top up now at over 5c but it still represents good value... if more rich gold deposits are unearthed.  Unfortunately it is at a remote part of Australia.  However, ABU was spawned out of Tanami Resources.... and has Mr Lee Ming Tee as one of its biggest shareholders.  The parent company has processing facilities but don't count of Mr LMT to look after you!

Personally, I think it should buy ERM to access its unused processing plant....

WHN

Like PCL, TPT, PVD and RIA, WHN is a O&G explorer.  And in the early stages with no money for the expensive exploration.  All the hypes are good and WHN can move either way.  For those wanting an exciting roller coaster rise, jump in but be prepared for its value to dive.  And be warned, very, very, very few explorers actually hit massive oil fields no matter how much they rage about how good their blocks are.

TPT

This one is like PCL.  It has no money on its own to drill off Morocco. But when I read that some experienced people are joining the board and the share price has come down (in spite of the good management news), I bought another parcel on 10/9/12 at 30.5c a share.

With some O&G stocks, you can trade before oil or gas is found.  But I am not generally a trader so tend to go for the ride.

ABZ

This stock has a great future but the problem is WHEN to buy.  Indonesia will stop selling bauxite to the Chinese who has been stockpiling it ahead of that policy.  It wants to develop its own aluminum industry so China will have to find its bauxite source elsewhere.  I asked the CEO if it is too early to buy at the Proactive Investor seminar; he shrugs his shoulders.  But it has fallen another 20% since so I thought it is time for me to move in early this month.  Of course, it can drop further but I am a long term holder so I know I am 20% better off now than if I had bought after the forum.

PIROA

I have lost some money by selling my PIROA a few days too early.  But a profit is always a profit and one must not regret it.  Nor be greedy.  PIR is mining in Mali where there is a civil war.

I need the cash to exercise the options.  I have 'too many' options and not enough cash.The exercise date is in December, but I want to be ready and to exercise them early.

PIR is no longer good value for money unless it finds more gold.  It must be pretty close to full value especially with the recent jump in value.

BDR

There is nothing brilliant about making some money out of BDR today.  But it must be bloody stupid of some investors to sell at 79.5c to me yesterday when the announcement was good.  Actually, it wasn't good; it was bloody good.  Today it closed at 90.5c.  I don't have heaps of cash so I spared a few more investors of their stupidity.

BDR

I could not let it pass.  At 79c, I missed out so I went for 80c and picked up a small parcel at 79.5c.  The announcement today is so good that I wonder why it didn't close higher.  I was one of the first people to notice the announcement.  I chased it from 78c, then 79c and when it settled at 80c, I went in and bought some.

If you look at some stocks, when a good news is announced, the share price jumps.  But when BDR or ABU get good drilling results, the market is so indifferent!  Fatigue must set in but I only look at value.

Talking about value, I wonder whether anyone has looked at RIA....

PIROA

In the midst of a civil war in Mali, PIROA's operation in western Mali appears unaffected.  When the option  price hit $1.16, I sold some to pay to exercise the options (due in December 2012).  That now means, I have recoup all my capital cost for the PIROA plus $5,000 real profit :-)  It has gone up by 8.5X since I bought back into it in 2010 with a few top-ups since then.

Last time I dealt with PIR (not the options) and I made a very nice profit out of it.

BDR

With today's announcement, it should spark a massive gold rush in the olden days.  It isn't shallow but neither is it deep for today's mining technique.

http://www.asx.com.au/asxpdf/20120913/pdf/428pbz5gr0j0z6.pdf

The share price has jumped to 82c so I missed out at 79c.  This is another one of those stocks where I practise my adage:  Buy stocks which make many good announcements but get dumped by investors!  My last top-up was at 52.5c in May 2012.

JKA.... watch RIA

http://www.asx.com.au/asxpdf/20120905/pdf/428jffjjj2zg22.pdf

When you read this article, it does not promise billions of barrel oil.  And it looks like a great stock to invest in.  But have a look at page 8 and you will notice something in red that says RIA.

RIA has already struck oil.  But why its share price is stuck, I have no idea.  In term of value for money, it would appear hard to beat as the oil has been found so the risk is already much lower.  Too good to be true?

POG

The price of gold is... over USD$1740 per oz.   PCL will be dumped by British and American investors when their opportunity to do so arise.  But luckily, most of investments are in gold other than the blue chip stocks I bought when I used to be advised by city brokers.

ABU

Has one of my readers got a deep pocket?  My portfolio should be crumbling today because of the massive write-down of PCL share price.  Instead, ABU has jumped by 0.5c at close and this matters a lot as I have picked up a lot of this stock.  It is my usual adage: buy what people dump when there is good news after good news after good news.

For those who don't know, Abu is a common Muslim name but it also has a dearer meaning for me.  "Abu" is how I address my mother in the Hokkien dialect.  My brother bought his ABU shares because he liked the name.  And topped up recently when it fell to 3.7c.  My last parcel was bought in May 2012 at 3.9c. My most expensive parcel was in Nov 2011 at 7.3c  :-(

Another announcement should be out soon.  Judging from the steep rise today, you can put your money on inside information or someone with lots of money who has been reading my blog.  ABU is probably my most frequently quoted stock.  It used to be GIR...    Some of my colleagues took ages before they saw the light.  And most are happy that they bought into GIR.  The other stock is CDU.  And that has been rising and rising with more and more good news :-)

PCL is not dead yet but there are plenty of short term shareholders who want a quick buck.  No oil so they dumped their holdings.

TAS

If you read a presentation by TAS in Aug 2012, then you would think that if everything goes well, then this is another Olympic Dam.  The good news is RIO believes it.  That is why TAS share price has been doing well lately.  The drilling is very expensive because the deposit is very deep.

When WMC (taken over by BHP) was searching for the IOCGU deposit, it was at the last hole when success was achieved.  Because of its depth, it is a very expensive mine to develop.  There is another large deposit in the same area but Carapeteena has been bought by OZL.   OZL also owns Prominent Hill around the same Gawler Craton area.

If BHP had committed to develop Olympic Dam, then this site would be worth more because of spending on infrastructure.  But never mind, TAS has RIO's deep pocket!

PCL

How volatile the share price!  The first drill hole is not enough to make a decision on whether the gas deposit is commercially viable.  When the secondary targets were reached, there was no further hydrocarbons to be found.  Hence, some big investors dumped their holdings.  I had a buy at 20.5c but it was sold to me for 12c.  The next time PCL moves a lot, it will either because of another empty hole or it has found oil.

AO

I feel nauseated whenever a politician, a civil servant or military man receives an AO.  No, not always.  It is their paid job and they get an award for it and many work in comfortable and safe place, with families nearby.

But I always wonder why some intrepid Aussies who explore places where people don't want to tread, and discover something economical that brings wealth to that society, yet get no acknowledgment.  Australia and some Australians also profit through tax and investment gain. 

ICN

I remember this stock very well.  I sold St George Bank before it was taken over.  I made a profit but I could have made a larger profit if I had delayed the selling.  Using that cash, I bought ICN and for a long time, I was making a large paper profit until after late 2009.  Yes, more than the WBC takeover of the smaller bank then.  From 2010 till now, it has been a miserable holding but patience will be a virtue here.

http://www.proactiveinvestors.com.au/companies/news/33306/icon-energy-and-beach-energy-reach-first-primary-target-at-cooper-basin-unconventional-gas-well-33306.html

When you look at the article above, you will realize that if all the hype generated by the stock is true, then this company should be worth a lot more.  In the meantime, it could go anywhere.   But if decent gas is found to confirm what it has been alleging, then this stock will bloom... or rather explode.

BHP, RIO... and CDU

I used to consider my BHP and RIO holdings to be "much bigger" than my small speculative stocks.  But while most people invest in blue chip stocks for security and stability, I went for the small ones.  Today, my PCL and PIROA have grown bigger than the 2 big boys.  And CDU has grown bigger than BHP.

Lazy fund investment managers will only invest in the big boys.  Yet, if the right stocks are chosen, it is the small caps that give better returns (with higher risk).  I am still capable of working so I am taking my chances.  But neither will I sell of my blue chips unless it is very favourable.

PVD

At the Proactive Investor Forum in May 2012, markets were tumbling everywhere yet the attendance at the meeting was full!  The only stock that I really like there (other than those that I already owned) was PVD.  Today, I can tell you that I am at >50% paper profit so the forum was worth attending.

I also got to speak to the CEO himself.  I told him that most of my exploration stocks have been failures as most drilling hit a dry hole in spite of great hypes.  He estimated about 20% success rate (so honest!) but he has a big tenement.  However, the share price can fluctuate a lot in the meantime.

PCL

If the secondary target hits oil or gas, it means PCL will be my most valuable stock in my superannuation portfolio.  The first 250,000 shares were bought at 1.3c  in Apr 2009 :-)   ... the virtue of being a patient and faithful investor; I have never sold any PCL shares.

This stock has to compensate for failures in other oil and gas exploration stocks over the years.

When the stock collapsed recently in May, I thought I was brilliant to pick my last parcel at 13.5c.  I was wondering who was the idiot who sold his/her shares to me.  Then just last week it fell below 11c and I thought maybe I wasn't that smart after all.  One of my readers was smarter; he bought in at 11c late last week. Now we are both smart but he is smarter (so I am making him pay for coffee next week!).  Unfortunately, one reader wasn't so smart; he sold at 6c last year, at a profit.  He might have bought back those shares but I don't know if he did or not. I bought more at 9.3c in Aug 2011.

If I own 0.01% of BHP, I will be a very wealthy man.  Unfortunately, PCL is still tiny but the prospect is huge.  This success is only from one drilling in offshore Kenya.  It has a few more tenements there and also in Namibia.  There are 1.15 billion shares on issue so I consider myself to be a "big" partner in PCL.

I am glad that I have bought another 5 parcels (including one rights issue) of PCL but at much higher prices than the first.  ALL are fantastic paper profit now.  The biggest risk is that now that gas is found, the Kenyan government will certainly change the rule to make it more difficult for the consortium to profit from it.  Corruption, nationalism and greed will start to show....

TPT, WHN

The market is aware that some big names have moved into the board, yet the share price has not performed that well.  I think the market is expecting Hussain Bolt rather than capable executives.  Because TPT has fallen a lot, coupled with the good announcement regarding management, I topped up my TPT holding.

In July 2012, I took another parcel of WHN.  Better get in while it is still cheap and relatively undiscovered.  Undiscovered because it has no serious JV partner nor has it drilled anything in Seychelles yet.  Like PCL, it will be worth less a toilet paper (which can be used at least once) if no gas or oil is found in large quantities.  The key word is "large" as it is so isolated and expensive to develop and transport the oil.

AUCO

I don't have any idea why the share price has been falling and falling.  Yet, around Katanning where road base was used for building roads, no one knew that that earth contained 2g Au/ton.  Perhaps AUC has been slow at announcing or has been progressing too slowly for the market to accept.  Hardly any drilling results have been announced but in the past, they looked good.

This area isn't exactly new.  Boddington mine, owned by Newcrest is not far away and it is one of Australia's biggest gold mine.  If you ask me why the lack of interest in AUC?  For me, it presents a good buying opportunity so I have topped up my AUCO but I inadvertently bought it in another portfolio.  Silly me!

Inside information

If you look at CDU's share price in the last few days, you would think that some investors knew what is going on.  And today, the announcement makes that rise highly suspicious.

But no one was expecting PCL to announce that while oil was not discovered, it has found a big cache of gas.  It will be a while before the size is confirmed.  Someone told me today, he bought into PCL at about 11c when idiots were selling.  That is great! (The share price plunged when the primary target was reached without oil being discovered.)  It closed at 22c.  That means 100% gain within a few trading days!  He will be buying coffee for me!

RRS

With a good announcement today regarding its exploration in Trinidad, you would expect the share price to jump.

What most people would not know or rather cannot remember is Trinidad is very near Venezuela.  The oil reserve is the biggest in the world, bigger than Saudi's.  These two countries may be sharing the same oil source....

PCL

One day recently the share price fell heavily because short term investors didn't like it when it didn't discover OIL.  But PCL never said no hydrocarbon.  Today it says 50+ metres of gas.  So the share price leapt.

And I am happy.  I was tempted to buy but I don't have heaps of spare cash.  And I am also happy for those idiotic buyers to rot but I hope for more of them when I am ready to buy again.

Unwanted stocks

It must be extremely disheartening to some managers of a stock when they try so hard to flog their companies to investors and.... few are interested.  Yet, with new gold discoveries, lowish debt and gold production, some are still ignored!

But I love these companies, especially when I have the dough to buy.  I did top up AUCO and OYM recently.  I will have to wait and see if I am the idiotic buyer or I have to thank those idiots who sold...

AUCO

I accidentally bought this stock in a different portfolio.

http://www.brrmedia.com/event/78711/ausgold-paydirt-presentation-benjamin-bell-ceo

This link was presented last year.  Since then, the share price has been falling and falling and falling.  The JORC resource announcement has been delayed and delayed and delayed.  Of course, the market does not like this unreliability.

But what it is has found so far has been good.  I love falling share price that I can buy on the cheap.  So I will put another bid for it at 5c.

BDR

I doubt anyone who has been reading my diary here has bought any BDR shares.  I first tapped into it in 2010 at 25c, ie about 2 years ago.  Then it rose and stayed at over 77c for most of 2011.  However, with the start of 2012, it has been dismal and kept falling in spite of the good announcements it has been churning out.  There were excellent and the management has been negotiating with Fe ore producers.  It gave me great opportunities to top up at 67c and 52.5c in March and May 2012.

As I have mentioned before, a company only make real profit when it sells a commodity and BDR was expected to start gold production in the 2nd half of this year.  What is interesting about BDR's deposit is that the gold is banded with Fe.  By selling the Fe bands to a neighbouring Fe ore producer, it is able to cut its cost of gold production.

Hence BDR share price has started to rise in recent months.  This company typifies what I like to invest in.  Multiple good news ignored by investors, good management given scant attention by the market, potentially good impending profit (POG and AUD stable) and best of all, some idiots are dumping their shares.  So at 78.5c now, only 2 small parcels from 2011 are higher in price but I am looking forward to further rise as POG has been trending upwards again and gold production is around the corner :-)

Another thing... the logo for BDR is beautiful... a Toucan

The other stock I like (based on its logo) is NGE, with a lyre bird as its beautiufl emblem.

TPT

Nice article in AFR Weekend about TPT.  A few prominent people from the oil and gas industry have signed up for TPT.  There might be more farm-in activities.  Small exploration stocks cannot make it on their own as it is too expensive to drill.  They need the big boys with deep pockets.

That is why I am into PCL (in trading halt and not doing well in the last week due to failure to find liquid hydrocarbons), TPT, BPT, COE, VIL, WHN, PVD, MEO, ROC, AWE, NDO, NEN and RIA and quite a few shale gas explorers in Australia.  But so far, the results have not been brilliant :-(

Gold

On Monday, it isn't a good day to buy gold or gold stocks.  This kind of price rise cannot be sustained and is not a function of supply/demand equilibration.  Most likely it is market manipulation for the short term.

What have I bought lately?  NWE, BPT, AUCO, ABZ, SXY, BUT, OYM and WHN on the market, and GTEO rights.  That makes it 1 base metal, 1 bauxide, 3 gold and 4 oil/gas stocks.

ABU has 3.3 million oz resource so someone in Hotcopper has calculated that with just last night's rise in the POG, ABU has increased its value by USD$115 million.  The market cap is only worth $149 million.

Stock market logic

That should have been "Stock market lack of logic".

The USA job data is bad and the stock market value rose.  How can that be?  Well, the logic is if it is so bad, the Feds has to start the stimulus package (QE3) to get the economy moving.  Isn't it amazing that you can use the printer to 'improve' the economy?!

Not only the stock markets performed well yesterday, POG went up too and the price of copper had a nice jump.  From one period when all the bears are out of hibernation and suddenly, you see the market turns.

My point is there is very little logic in the short term.  You invest for the long term and you pick value or prospect.

2 people to emulate...

There are 2 people you should emulate when it comes to investment.  They have been proven to be highly successful over a long period of time.  And both won't be around the scene for much longer, i.e., they are elderly.

Unfortunately, you cannot emulate them because you can only afford to buy shares, and these two buy management.  You have virtually inconsequential say in how a company is run (luckily!) but Warren Buffett and George Soros takes over the running of the stock.  And if they don't, it is because they choose not to discard the good managers.

However, if you look at POG, you will realise that there is one aspect of George Soros' scheme that you can follow.  He is buying gold.  Unfortunately, the decision can be bewildering because Warren Buffett won't invest in gold!

Yes, the POG jumped again last night in the USA.

Just when you think you should dump all your equities...

Suddenly all the markets are soaring.  With all the bad news emanating from all economies, you would think the markets are going to crumble.  Sell and then wait and buy back on the cheap?  I have been through this before.  You can never pick where the trough is going to be.  An event occurs and it changes things.

But don't be fooled.  Just because the ECB is issuing a bond-buying plan does not mean everything is rosy.  My point was if you dumped your shares yesterday, you would be crying today.  Who knows what will happen next week.  What I do is just buy what I think is good value and resilient.  Oil and gold preferably.

POG

Here goes the yo-yo.  POG now over USD$1700 per oz.

There is stock AUC languishing and languishing.  But there haven't been bad reports about it.  So today, I picked up some AUCO at 8c.  Am I wise or am I dumb?  Whatever the answer I am a small wise or a small dumb.

OSH and WPL

Once upon a time, my WPL was worth a lot more.  And it was many times bigger than my investment in OSH.  Now they are running neck to neck.  Shows you the effect of investing in small caps but I don't mention the small caps that have disappeared from the face of the earth!  Small caps are bigger risks with bigger rewards when successful.

I have invested in WPL since 1996 but I should have done so when it was tiny!  But then I didn't have the knowledge at that time.  At least I got into OSH early when it was under $2.40 a share in 2005.

Iron Ore

Decay of the iron ore industry is too premature.  It costs even more to mine low quality Chinese deposits so there is a floor to its prize.  Already, the market is starting to murder FMG and AGO and slicing BHP and RIO.  The Chinese government would not dare risk rampant unemployment in China or it will be toppled.  It has a huge saving.  While everything appears rosy in China, the infrastructure still needs a lot of upgrade, replacement or installation.  I must be the only optimist left... but the market will drift even lower first :-(

ABZ

Capital Economics in London says commodities will tumble in the next 15 months... except for aluminium.  No reason was given.  But according to the CEO of ABZ, China will have to start finding a new source of the raw material, bauxite.  That is where ABZ is, waiting with the thickest bauxite deposit in Australia (in NSW!).

It is not common for me to buy a stock and make instant paper profit.  And it is even rarer to pick up shares at the trough.  Well, I missed out on the lowest of the day but on  a low trading volume, it has moved up to 32c.  I don't know which way the share price will drift today but I am harbouring this stock for the long term.

ABZ and NWE

After attending the Proactive Investor seminar recently, I found it hard to resist buying ABZ at 29c.  Indonesia is reducing its bauxite export to China and plan to create its own aluminum manufacturing.  From the CEO's presentation, it is difficult to pick the best time to buy its shares but I set a price at 20% below the prevailing share price during the forum... and I picked my first parcel today.

I also collected NWE today.  Because it is getting good hits after good hits in the Perth Basin where fracking is allowed, I decided to jump in while it is still low.  Of course, it has gone up recently due to drilling success.  I also have shares in AWE which has bottomed because of many exploratory failures elsewhere.  AWE and NWE share at least one block in WA.

One of my biggest difficulties in investment is knowing which stocks to sell.  Hence I am accumulating many different stocks.  One day, I will have to clear the no-hopers....

In a few months' time, I will know whether I am an idiotic buyer or I bought the shares from idiotic seller(s)!

GTE

The trading halt has been lifted because the trenching results are excellent.  You wonder why no one previously had noted how much copper there is.  Cupric oxide has a distinct green colour that even a non-geologist can discern.

The rise does not match the extend of the surface deposit.  But Kazakhstan has a peculiar government like most of the central Asian countries.  One moment you are invited in warmly to explore and then AFTER you have discovered a good deposit, corrupted politicians move in.

GTE has not explored its own backyard yet near SFR's prize Doolgunna deposit.  And that I can't understand.

For those who bought GTE while it was much cheaper, enjoy the ride.  Whether it lasts forever, upwards, you can never tell.

PCL

Almost murdered today for reporting a drilling result which does not meet with its hype.  The market is expecting a huge column of oil or gas but it is only suggestion of gas.  However, this is only the first drilling.

GTE

I only held on to this stock because of its nearology to SFR Doolgunna deposit which has transformed SFR from a small cap stock to being worth over AUD$1 billion on the market.  The magnetic studies indicate a deposit bigger than SFR's but not explored yet by drilling.

In the meantime, it went to Borat's country and found copper.  It didn't actually find a new copper zone; there was already copper mining there historically and the green belt of cupric ore on the geology had always been visible.  Why no one has picked up this tenement has always got me puzzled.  It is not small.  The whole tenement is longer than 125km long.

The first lot of trenching results were superb.  Now there is a trading halt because another announcement is going to be made.  Each time a good result comes out, the share price flies and then lands again.  If Tuesday when the announcement is made regarding its exploration result, then if it is good, it will jump once more.  Nickel is down on its knee yet when SIR found a new lump of that mineral, its share price went up by 10-20X over a few weeks.

Copper is more resilient, yet GTE's discovery is treated with some disdain.  And the hype given so far would suggest long belt of copper veins, about 10-30m wide and so far I can see 2 belts.  No drilling yet, just trenching.

Because I bought a lot of shares in GTE when it was just over 1c, I have done well.  But I have also topped up at over 20c in 2007 and 2010.

CTP

There was a recent write-up in the papers with a small paragraph given to CTP.... but a highly significant one.  I hope it is right!  The truth is you can only correct if the exploration turns out successful.  And in the short term, the share price can yo-yo depending on what announcements it make.  The farming-in of a big boy will always lead to a jump because of premium paid for.... and the reflection of the confidence in the 'truth' of the hype.  I am close to 40% profit with CTP but this could easily be reversed with empty drilling results.  Stock market is about calculated gamble with the odds much better than Lotto or other legal gambling venues.