Big fall

As usual, when things are not rosy, mine is even worse because a lot of my stocks are speculative resource stocks.  However, it is puzzling why ASX fell while Hang Seng and Nikkei rose.  Chinese manufacturing feature shows improvement.  So it looks like ASX will have to wait till tomorrow...  provided the DJ does not fall.

Sandy as a storm should improve US economy.  People have to work harder to reconstruct damaged property and infrastructure.

CNOOC

This is one of the biggest Chinese state-run company.  It has invested AUD$5.7 billion into the CSG project in Gladstone.  Yet China has the most CSG in the world but not exploited yet.

The only bit of good news for me is that we bought into BG when we lived in the UK.  It hasn't been a great investment but at least it has not disappeared!  And it pays a dividend.

TPT

Such a small amount to be raised by SPP, ie $800,00.  That is why it won't be diluting the existing shares.  But at 28c against a market price of 38c, you would be crazy not to purchase any.  It will be savagely scaled down but there is still some profit to be made out of whatever is allocated to you.

So while my money keeper has given me the fund to purchase the maximum, I have also told her that most of it will be refunded to her   :-)

Sovereign risk

The Third World is also run by politicians.  Worse still, many are very corrupt and unprincipled.  Quite a few of my stocks will crash in value today.  Those exploring in Congo and Kenya will wonder what hit them!  Before finding anything, the government will promise good governance.  But after you find something rich and when the commodity price is good, the goal posts will shift.  That is one reason why some of the big boys stay away from them but Rio is in Congo....  RIO has already suspended an operation there before the announcement by the DRC.

BDR

I recently collected shares in BDR when it fell to 92.5c.  When you read the article below, you wonder what the sellers are thinking when they dumped their investment on the market.  Note that this announcement came out in Sept 2012.  It isn't new but it is definitely superb.  The sellers' memory must be fucked.

http://www.proactiveinvestors.com.au/companies/news/33414/beadell-resources-strikes-exceptional-high-grades-at-duckhead-open-pit-gold-project-33414.html

Something odd after the end of the day

It has happened a few times now.  My portfolio looks miserable compared to the ASX All Ords performance.  And then when it closes, it still looks not that great.  Then, later on, my portfolio outperforms.  I am questioning as to what happens AFTER the market closed.


Tonight the Americans will once again decide whether I am wealthier tomorrow or poorer.

TPT

Since its SPP was announced at 28c, the share price has climbed to 37c.  It is simple to ask whether to buy the maximum allowable.  But the company is not intending to raise that much dough so I won't get the full entitlement.  Sometimes it takes months for the refund to occur.

There is a lot of interest in offshore Moroccan tenements.  But whether it will be a success or not, I can confirm that it is a very risky business; usually a... failure.  So don't touch this stock unless you got guts and spare cash.

BDR

Yesterday, I was pleasantly surprised that BDR had been sold off and I collected some shares at 92.5c.  It isn't the trough but neither was that price far from it.  I wonder what the sellers are thinking today as it climbs up 4c from yesterday's close.  I wish I can meet those sellers to find out what motivates them and what is their rationale for selling.  There is still plenty to learn from what I call idiots.  But maybe a few months down the line, they could be calling me "that idiotic buyer".  Until then, I like to learn...

BDR

The future news is good.  While there was some unforeseen delay in the progress of the gold processing plant in Brazil, it is now merrily along the way, with commissioning of the plant in mid-November.

I have put a low buy at 92.5c for a while and forgotten about it.  And just now, I picked up the small parcel of shares.  Why are investors selling when a stock is well-managed and progressing well, with POG stable above USD$1700 per oz?  You might have to ask those idiots who sell.

Insurers

I no longer invest in insurance companies.  Not that it is not a profitable business but there is too much sentiment and political interference.  During a disaster or a pending one like Sandy blowing on the East Coast of the USA, insurers suffer a tumble.  But when they make a huge profit during a "good" quiet year, they are perceived to have exploited customers, either by overcharging the premiums or underpaying their claims.  People fail to understand that that is how insurers function...   Worse when politicians are screaming away at insurers to get votes, making them out to look like saints.  MPs as saint?   Name one!

MEO

Sometimes you wonder what it has to take to stir up a share price.  MEO had a bad announcement when it drilling with the Brazilian big boy, a year or two ago.  It was given a lot of cash from the farm-in.  Hence, its share price never crumbled because of its cash holding.

Lately, together with Eni, an Italian big boy, it has uncovered lots of gas.  But it will need more drilling results to confirm the size of the gas field.  I topped up with the SPP at 20c but when the drilling result was announced, it was hard to believe that the share market would almost totally ignore one excellent drilling outcome.  Hence, I bought another small parcel of shares at 21.5c.  Yesterday, it closed at 23c.  While I am still at a paper loss with this stock, if more successful drilling results are announced, then it will move up.  Sadly, most drilling results are failures :-(

Alphas

Most of today, my portfolio didn't carry much alpha.  But by the end of the day, I was doing better than average!

One reason why is the huge jump in AXE into positive territory for me.  Also, when stocks which I bought cheaply, and therefore collected many shares in them, rise a bit, the effect on valuation is very profound.  These include ABV, AVB and CTP.  But on the same note, JRV dropped and caused a big negativity!

One other interesting stock is VLA.  I am slowly moving into neutral gear.  If another great report comes out of its trial, then this stock should start to fly as it moves towards production.  So far, the results have been excellent and you wonder why the news isn't broadcast on the local TV channels.

AXE

I have many stocks that are very promising with great prospects.  But the market does not agree.  So the share prices just drop and drop.  And then all of a sudden, someone with a deep pocket saw the light.  With a huge jump today in AXE, I am back in profit.  But then with regret, I wish I bought more while idiots were dumping it.

AVB

This is a posting by someone in Hotcopper


Firstly, even though I am not a TA man myself I must say this thread has some great chartist to support some great FA posits
I tend to invest in later stage companies like BPT, RSG etc however there are a few things that make AVB a standout to me and allow me to invest a decent amount with comfort and confidence
1 . It has a resource which is now larger than required for a good sized long life mine
2 . It has grades and gold byproducts that suggest a 1st or second tier production profile,
3 . It has exploration upside which is virtually guaranteed allowing the stock to remin cheap even if we are sitting at a much higher shareprice
4. It importantly has path to production which will not be very dilutive
5. It has a decent chance of a large cash injection to drive aggressive drilling and early production
6 . It has the benefits if nearology allowing it's future resource growth to be project with some confidence
7. It will be producing two metals ( cooper and gold) that are an all accounts likely to appreciate in Price

All these reasons , positive FA and TA momentum and resilience in a week market suggests to me this is a keeper. It definetely has bagga written all over it, the question of how many will be answered with the fullness of time




I have rarely highlighted this stock, just like EXT in the past.  The bird has flown.  I bought when it was already known to have excellent prospect in Brazil but it was still an unknown to the general investors.  Of course, I have written about it in the past.  It isn't a stock I would push because it keeps going up and up.  In fact, some of my parcels are still at a loss although overall I have a 140% profit.  My early purchases were below 5c.

Rock chips

http://www.proactiveinvestors.com.au/companies/news/35026/rox-resources-lab-assays-deliver-307-copper-at-bonya-35026.html

I don't own shares in this stock.  But I want you to be wary of rock chips sampling.  It is an extremely biased form of sampling.  I have purchased stocks in the past when the results are incredibly good.  But dig below the surface, physically, and then I discovered that I had been duped.  Under certain circumstances, you may put some weight on this method of assessing the potential.  The only thing favourable is nearology to KGL.

I am not a geologist but rock chippings cannot possibly make a big contribution to JORC resource estimation.  It may be a guide to where one would drill but until you get drilling results... it is merely a suggestion.

Down and down

DJI went up a bit at the end but ASX went the opposite way and finished way down by nearly 1%.  Today, I have a 0.3% rise but a 0.7% fall in another portfolio.  I still call it an alpha in both.

Some of my stocks carries a lot of weight so if they do well, I get a lot of alpha but it can swing the other way around, too.

POK, MKE and PVD went up a lot today so I have a lot of alpha.  And luckily CTP went up so it made my other portfolio looks a lot better!

What I am glad about most is that POG is still above USD$1700 per oz.  There is a conspiracy theory at the moment which says that Germany may not have as much gold as it thinks it has...

SLR take over IGR

The takeover process is yet to be completed but when both managements agree to the plan, it is usually just a formality.  SLR is going to be one of the biggest gold producers soon.  Normally during a takeover process, because of the premium required, the big fish drops in value while the small fry jumps.  But in this case, both jumped.  I own shares in both but in different portfolios.

Those who receive emails from me in the past would be very happy with their investment in IGR.  SLR is a mature miner now but its value will have one more spike when profits from the gold production are announced.  Of course, the plant can malfunction or expected yield could disappoint... but I doubt POG will fall below USD$1500 per oz in the near future.

CTP

Once upon a time, a 0.5c or 1c change in share price for CTP makes only a minor variation in the value of my super fund.  Today, a 1c change gives me a huge drop relative to the market average.  It is now only behind my CBA shares in value.

My first 2 parcels are still under water at 22c and 23c, bought in 2007 and 2008 respectively.  My biggest chunk and last parcel was at the SPP in Jan 2012.  I bought the maximum because the share price has appreciated over the issue price of 5.5c due to discovery of oil.  What was fascinating at that time was not every shareholder bought and not every shareholder bought the maximum allowable.  I also bought into 2 entitlements, coupled with free options :-)

JIN

Australians love to gamble; the Chinese even more.  I used to own shares in Crowns but I sold as the Chinese government was curtailing Chinese citizens easy access to Macau.  It didn't reduce the numbers but I don't like stocks which have political issues.

When JIN announced its profit, I re-entered into a gambling stock.  I gamble to win while most people gamble to lose for the fun of it.  But for a while after I bought, it dropped slightly below my buy price.  Lately this stock has been rising.  It even pays a dividend!  Over time, I will start to invest more in this stock as its cyber gambling business is becoming more successful.

Some idiots sell their stocks when announcements are good and some people gamble when they know the odds are bad.  Either way, I am happy to help.

POG

Still slightly above USD$1700 per oz but the bad news is the rising AUD.  While a strong AUD is great for traveling or buying from Amazon, it is a disaster for exporters.  Profits will be affected as commodities are priced in USD.

http://www.mineweb.com/mineweb/view/mineweb/en/page103855?oid=160789&sn=Detail&pid=102055

If you deposit $1000 into the bank, you would expect interest with $1000 buying power.  But what happens while your money is in the bank's hand while the government (.... like Zimbabwe or the USA) is printing more paper money, thereby eroding the value of that capital?  Luckily, no government can print it; they can buy the metal in the open market.

But gold is not the perfect standard for currency value.  If one of the major central banks dump its hoard of gold bars, then the POG can plunge.  But luckily it is only temporary.  Just ask Gordon Brown who got the Bank of England to sell off its gold cheaply... not that long ago.  The UK lost lots because gold price has never been that low again!

The known reserve of gold is diminishing and new discoveries are not replacing the fall due to demand.

Based on these factors, I cannot see POG plunging to below USD1500 per oz in the near future other than short term market manipulation.  But I am not Allah... nor an economist.

ROC

It discovered a >100m of hydrocarbon with the first appraisal well in South China Sea off the east coast of West Malaysia.  But the announcement was met with absolute indifference!  I don't have that much spare cash so I will wait patiently...  The other nice bit is that ROC is the biggest partner with 48%, in conjunction with Petronas (20%) and one other (32%).

POG

POG is still over USD$1700 per oz.  Just.  But the good news is this AM, it has gone up by 40c!  That means the POG could be starting to turn.  Markets cannot keep dropping while cash is floating around.  Already, bond yields are falling.  It is impossible for small investors to pick the trough.

The markets around the world has been plunging.  For most people, it is misery.  For me, I will be watching for idiots selling out of good valuable stocks.

MKE

Many moons ago, I bought into MKE due to its holdings in Canada.  If no production or good drilling result is announced, then it is bad news for any stocks.  And this is what happened to MKE.  So it fell consistently.

However it received a speeding ticket from the ASX today to account for its massive price spike.  I am back to where I started...

A lot has to do with nearology.  If the big boys are interested in neighbouring tenements, then you can expect it to jump, too.  Well, I keep my fingers crossed.

MEO

I did collect some shares today in MEO, a small parcel to top up.  With such a great announcement and a strong deep-pocketed JV partner like ENI, production will start soon.  Of course, more drilling will need to be done to fully evaluate the size of the gas deposit.

MEO

This stock was recommended to me by my brother.  It did well, then it did badly because of one bad drilling result with Petrobra funding the cost.  But because of the JV, it has a lot of cash, donated by Brazilians.  Hence, its share price has never plunged.

In recent times, it has had a SPP which I participated because the prospect is excellent.  The NW Shelf of WA is full of gas and oil.  Today, with Eni, a big Italian O&G company, it has found more than 300m of gas.  yet the share price has only moved 3c to 22c.  I have put in a 21.5c bid so if there are idiots selling on good news, I am there to help.  The other good news is Eni wants early production!

POG and Dow Jones

Interesting that last night (EST), POG went up a bit but DJI went down.  For a while, there was this synchrony between the two, even though it is puzzling.  Gold should be a hedge against a collapsing equity market.  But I suspect the POG has been the realm of speculators rather than investors.  China apparently is buying lots of gold from Australia.  But are these new speculators or long-term investors?  Inshallah!

GNC... the Yankees are coming... again

Well, you won't hear Barnaby Joyce raising "concerns" about the Yanks trying to take over Graincorp.  He might but it isn't as early nor as loud.  Yet, it is another cheap Aussie asset to be sold off by fund managers for a quick buck.  Had it been a Chinese company, he would be at the front gate.

It is at an early stage.  Who knows, the Chinese might make a move, too.  The Chinese government has to exert some control over agricultural supplies.  A hungry population is an angry mass.  So we might still hear a very loud Barnaby.  Go Joyce, Go!

POG

In the short term, there is a lot of manipulation.   But in the long term, it is dependent on supply-demand balance.  Unlike money, this metal cannot be manufactured nor printed.  While the stock markets plunge today, the POG is holding up.  I am sitting on the fence at the moment... with not so cash to play with.

Super back to preGFC value

Maybe you shouldn't read my blog!  My super valuation is still below my 2007 level.  But I don't know how the valuations are calculated.  The Australian reported that super funds are back to preGFC valuation.  I have sold off massive losses and I have also made massive gains.  But overall, because I invested in 'funny' stocks, I don't expect to outperform.

What I dare say is that if I didn't continue to invest during the doldrums, my average buy prices would have been higher.  Some of the best gains have been due to contrarian moves.

Commodity prices

Just when you think that Earth has gone pear-shaped from a financial point of view, you have Bill Evans from Westpac telling people that commodity prices will rise by 30% this year.  The last time when he was a contrarian regarding interest rates, all the other people thought he was bonkers.  He had the last laugh.  And apparently, this is not the first occasion.  So this time around, his opposing view regarding commodities has pricked the ears of fund managers.

While I may read financial news and do my own projection, I never fully act on it as logic demands.  That is because often, the opposite happens.  And because it has happened frequently, I work on a different strategy.  Most of the time, it is based on announcements on the ASX.  When everything is equal, if the share price plunge when a good news is announced, then logic demands a price rise.  So if there are idiots who want to sell, grab them!

This applied to BDR last week.  When I saw the share price fell, it was unbelievable.  So I put in a bid at a slightly lower price to fish out more idiots but I underestimated.  Idiots can be quite smart...  Because I didn't buy, when the prevailing market price at that moment was still below the price from the day before, I lost out at the end of the day when it started to climb way over to $1.045.  Some investors do not have visual or hearing loss, just that the information is very slow to get to the Buy part of their brains.  Anyway, I did pick up my latest parcel of BDR at 79.5c in mid-Sept after a good announcement and the market was indifferent.

POG and the DJI

Once upon a time, gold was a hedge against the stock market.  Now it seems to move together!  Wall Street plunged on Friday... and so did POG.

However, gold cannot be printed.  And there is a lot of cash sitting around earning pittance.  One bad reporting season does not mean the end of the equity markets.  Yet, most fund managers function like lemmings.  At least, lemmings have a brain in their heads while these finance "experts" keep theirs in the rectum.

Come Monday, the same will happen to the ASX.  Everything will fall.   If you have good news to tell, don't report it until the market stabilizes.  That is in theory illegal but there are excuses the boards can find.

While I am running out of spare cash, I will be looking for bargains.  But be warned, the analysts are all predicting a bad reporting season in the US.  That is still big brother.  So if you are going to buy, choose only good value stocks.  And if you cannot handle risk... stick to the 4 big banks.

AUCO

I have been making big losses on AUCO but luckily it is in small parcels.  However when you read the company's last annual report, it is difficult to comprehend why it is being dumped.  Options are riskier with potential for bigger returns.  While it may not rise in the near future, it is difficult to see how long the market can continue to sell this stock off.

ABU

While the veins show a lot of gold in them, the width is not wide.  The sampling is highly selective because they know where the veins are.  However, it is still a good result.  And at a deeper level, the veins widen to variable widths.

When the updated JORC resource is announced, then you know whether it is really good news or not.  Hopefully, deeper drilling will result in a clearer picture.

BDR

Ended the day up.  Some idiots sold after the good announcement came out.  I put in a low bid in case there were more idiots around.  But the market ran out of them!

BDR and ABU

Both had good announcements today.  Yet ABU went up by only 0.1c and... BDR fell!  Isn't this incredulous!  You really wonder who are these absolute idiots.

BPT

Multiple release of good news, yet the share price has not moved up that much.  It is one of the more successful O&G explorer in Central Australia and in Egypt.  Yet, there is very little interest in this stock.  And it is not small either.  It has joint ventures with many smaller stocks.  So far, the scores have been pretty good.  I have topped up in the past... and will continue to do so when I have the spare cash.

ICN

For a long time soon after I bought this stock, it was doing very well.  The hype is incredible.  The company would be worth billions if what it said it has is true.  But when little is discovered due to lack of drilling, it started to fall.

In recent times, it has teamed up with a bigger brother, BPT.  The latest drilling result is great.  The rise does not match the good discovery.  But one drilling does not mean a huge find.  A few more are needed to confirm.

CDU

In the last month, I have topped up with 3 parcels of CDU.  And today, all parcels are paper profit.  Don't ask me why people sell when there have been good announcements.  What you need to know is whether the seller was the manager of your super fund.

Proactive Investors Forum

Tonight I attended a Proactive Investors Forum.  While some stocks were decent, I still prefer ABU for gold stock, BKP for oil and gas, nothing for coal, antimony, iron ore.  I certainly won't invest in a Chinese company listed in ASX with nearly all Chinese directors.  I asked a couple of unpleasant questions and got woolly replies.  A few members of the audience were rolling their eyes at the answers.

GTE

This bears some similarity with ABU.  Good news causes the share price to go up.  And then a steady drift down after that.  So I bought at 19c during the fall but it is very difficult to pick the trough.  Today, it has climbed to 19.5c.  Like ABU, I wonder who are those idiots who sold it down to 17c just recently.  Of course, I should have topped up at 17c but my cash is dwindling and many rights issues and SPPs are still to come.


Today I put a sell on a parcel of PIROA for $1.745 but I have brought it up another cent!  If this clears, then I will have more cash to play with... and to exercise my rights to PIR ordinary shares at 20c a piece.  Maybe, I should put it at $1.76... that is 10x my buying average :-) but I won't be too greedy.

ABU

Just past noon, and the share price for ABU has hit 5.4c.  But I will only trade the small parcels when it next makes a good announcement.  What you hope for is that the seller at 5c is not the manager of your superannuation fund!  You just paid him for me to make a profit for myself  :-)

ABU

I wonder what that idiot who sold me ABU at 5.0c is thinking this AM.  I like to take him out for coffee though.

This stock has the most predictable pattern after each excellent announcement.  First a disproportionately low rise.  Sometimes, it can go up further but usually, it is not sustained.  Then, it starts to fall and fall and fall.  It then falls below the original price.  The cycle then repeats...

I might consider trading the last couple of parcels in future.  I have bought many parcels of ABU.  When I read the annual report this AM, it is fascinating that the market is disregarding all its excellent drilling results.  Often on the ASX, when a stock announces "excellent" drilling outcomes, the figures are pathetic compared to ABU's.

Cu stocks

Sometimes in Hotcopper, people put up good postings but I don't bother checking the accuracy unless I am actually buying.  I was going to re-enter into MGO until I heard it will be shifting its base to Canada.  CDU and AVB are finding more and more minerals.  Here is one posting that looks convincing but check yourself!

AVB

Brazil

AVB JORC Reported Mineral Resource Inventory for Stage I & II has increased to: 52.11Mt at 1.27% Copper, 0.32g/t Gold for 661,000 tonnes of contained Copper and 527,000oz of Gold. Copper Equivalent of 773,000 tonnes

o Cut-off Grade of 0.4% Cu for Sulphide Resources, and 0.3% Cu for Oxide resources.

Market cap $108m - $114m fully diluted

$147.47736 per tonne cu eq

NOTE: Mostly inferred resources, but will probably reach 1mt cu eq soon

 

BTR

Zambia

BTR In-situ Mineral Resource = 187 Mt @ 1.14% Cu using a 0.5% cut-off (2.132 Mt of contained copper). BUT Estimated mineable ore of 84.5 Mt Run of Mine (ROM) at 1.19% Cu (1,014,000t cu)

Perkoa 12.17 Mt @ 10.3% Zn and 53.9 g/t Ag

Market cap $186m - $190m fully diluted

$187 per tonne cu.

NOTE: Ignores Perkoa, which has started mining. BTR's share of Perkoa is 39.9%

DML

Botswana

DML Boseto Mineral Resources 131 Mt @ 1.3% Cu & 16.2 g/t Ag. (1,703,000t cu)

Market cap $803m - $805m fully diluted

$462 per tonne. Ignores silver

NOTE: Producing

CDU

QLD

CDU JORC 30.3mt @ 1.7% CuEq (0.8% cut-off) Measured and Indicated = 515,100 tonnes cu

97.9mt @ 0.96% CuEq (0.4% cut-off) Measured and Indicated = 939,840 tonnes cu

272.9mt @ 0.62% CuEq (0.2% cut-off) Measured, Indicated & Inferred = 1,691,980 tonnes cu 1,691,980

Market cap $900m - $917m fully diluted

$976t cu eq Using middle 97.9mt figure.

TGS

DRC (Democratic Rep. Congo)

TGS Resource of 49.0Mt at 1.7% Cu for 834kt contained Cu (mining depleted)

Reserve of 2.7Mt at 7.0% Cu for 188kt contained Cu.

Market cap $227m – Fully diluted $240m

$272t cu

NOTE: TGS own 60% of Kipoi, so the effective value is $450t cu

MGO

Papua New Guinea

MGO Measured 248m tonnes @.43% (1,066,400t cu)

Indicated 114m tonnes @ .42% (478,800t cu)

Inferred 218m tonnes @ .37% (806,600t cu)

Market cap $176m – fully diluted $187m

$80t cu

HOR

Western Australia

Measured, Indicated and Inferred Mineral Resource of 8.6 million tonnes @ 1.06% Cu and 0.13 g/t Au for 91,000 tonnes Cu and (37,400 oz Au. approx 7kt cu eq)

Market cap $18.6m – fully diluted $24.6m

$251t cu eq

ABU

POG has been falling and falling... but it is still over USD$1700 per oz.  I put in a bid for ABU at 5.0c and picked up the small parcel today.  It is really unbelievable that there are idiots selling when the news have been so good.  Maybe they know something and I will be THE idiotic buyer.  But at least, I did it legally and without a lot of geological knowledge.  I can only do simple arithmetic.

WHN

How nice it is to make a good announcement without having to spend a single cent!  Shell is drilling very nearby in offshore WA; just spudded on last Sunday.  And the gas field is expected to straddle into WHN's tenement (1/3 share with 2 other stocks).  So if Shell gets a gas hit, the WHN will benefit greatly.  It is very expensive to drill there at  >1km deep water.

This is a high risk stock but the prospect is excellent.  Its true value can only be confirmed if gas or oil is found in huge quantity, not piddly little puddle or pocket.  Otherwise, it is worth less than a piece of toilet paper.

PRU

Normally if your production is below guidance, your share price gets mauled.  But PRU only went down a bit.  I was thinking about selling this stock as it has matured and is unlikely to be thrilling.  But wait.  There is one more exciting event to look for.  I suspect that is the reason why it has not tumbled down today.

It is a takeover target....

ABU

Is there is pending bad drilling result?  That is in the realm of illegal activity.  Otherwise, this has got to be the stock to buy at the moment. How can good announcement sink so low?  And you really wonder who are these idiots who are selling!  Perhaps they know something we don't.  But again it would be something illicit as no bad news has been released via the ASX.

I have been at work this PM but if the prices remain at status quo, I would prefer to sell some of my PIROA stocks and transfer the profit to ABU.

Fe Ore producers

One moment, you would think that it is the end of the world for Fe ore producers.  FMG was teetering on bankruptcy and share prices for this sector was falling.  AGO was miserable.

And then, suddenly, the spot price for Fe ore has risen 30%.  How can you predict this?  I can't and neither do the experts.

MAT

BOA just listed and flew from 20c to 64c within one day of trading, last week.  Why?  It is about 4km from the super Nova deposit that SIR discovered recently.  SIR has gone up more than 20X recently.

In the meantime, bigger tenements around SIR have fallen, together with SIR (still high of course).  One stock that I own is MAT, bought not for its nearology to SIR but for other reason.  It has plunged down last week... yet the market is prepared to pay more than 200% the listed price for BOA.  Can anyone see the logic?  The broker has under-priced the float!  Since I am not privy to those shares, I like to think that maybe MAT is much better value than SIR or BOA now.  But it has to drill and FIND nickel before the market re-assesses its worth.

Some fly and some dive

What makes one stock rise and rise and another plunge and plunge?  My conclusion is that in the short term, you are dependent on market sentiment.  You can never tell although sometimes logic does prevail.  But the logic has to be very strong.  So SIR finds a rich large lode of nickel and the share price goes through the roof.  However, if you find gold in small increments, then you have to wait until the whole lot is announced before the market even takes notice, like ABU.

The good news is if you invest for the longer term, then the little squiggles of short term trading become less relevant.  So if a stock is worthy of its discovery, eventually, its valuation will show, either in production, hence profit like SFR, BPT or LSA or someone is interested in your assets like for Discovery Metals.

Virtually all my stocks are for long term investment.  I only sell when I really need the dough, when the prospect looks bad (like LYC) or the stock has gone berserk and idiotic buyers are surfacing.  What is most disappointing is those idiotic buyers are sometimes insiders... with good news still not announced yet to the public or ASX.  That is illegal and unfair.

SGQ

Sometimes, when I buy a new stock, it comes with great hope.  And then nothing happens or worse still, it falls in value.  But patience pays....  If I look back, I knew why I bought it but I could not understand why it became a loss for such a long time.

ABU

Fascinating how ABU is so heavily disregarded by the market.  Often you have to wait until an updated JORC resource is announced.  Sometimes good drilling results do not equate to a large mineral deposit in the ground.  I have no idea how it is calculated in details.  A good example was the plunge in CDU last year.

For me, good drilling results equate good buying opportunity WHEN the share price falls.  The logic is rich sample implies more minerals; that simple.  But the total amount is calculated different.

My buying spree is coming to an end as I use up my cash after selling a chunk of PIROA.

CTP

The recent rise in CTP is because of the valuation of CTP by STO.  There will be more JV partners coming in with different terms.  CTP's total tenement is about the size of Victoria and it cannot develop on its own.

At this stage, I have no intention of selling any shares in CTP.  However, a profit is a profit.  I sold shares in PIROA recently to see it rise much further.  No regrets but I suspect an inside information job as very soon after I sold my first tranche, a good announcement came out.  The same can happen with CTP.

But for those who have made a big profit out of it, have a think about recouping your capital cost.  In my opinion, CTP has a long way to run...  Even in profit, decisions can be difficult but never be too 'greedy'.  Also shares can be bought back, either more expensive or cheaper depending on your luck.

BPT

Yesterday, it announced a small oil find.... and the share price fell in line with the market.  BPT has been dishing out very good announcements but there is a lot of market fatigue for excellent news.  However, just don't announce bad ones!!!

AVB

Here is a posting from Hotcopper...



Was looking through a presentation of another Australian CU company called QMN when I came across this snippet of information:-
CDU (Cudeco) has defined a contained resource of 293kt Cu + 191koz Au at Rocklands and has a MCap of $880m (Undiluted)
AVB has defined 661kt tonnes of contained Copper + 527,000oz of Gold and has a MCap of only $100m
Understand that Cudeco is further down the development path but 8 x AVB market cap ???
AVB ...is undervalued IMHO.


 


AVB is now worth 8.7c but I bought it at 5c on the average but during one spate of trading, I have already realized over $2000 within one day when the price shot up.  Some of AVB's copper and gold are relatively deeper than CDU's so it is more expensive to mine.

ASX All Ords

The ASX All Ords will fall badly today.  All news are bad.  When all the stars are aligned, my portfolio will be hammered.  The worse is the falling gold price.  Actually it isn't bad at +USD$1700 per oz but the recent trend is downwards.  Compounding it, is the AUD which rose a little in spite of markets tumbling and China unwinding.

IMF has sounded a warning about the world economy but strangely, the market performance is out of sync very often.  I still like gold because it is easy to calculate, and there is no big discovery anywhere, meaning no greatly enhanced supply of it.  But gold price can be manipulated due to hoarding by Central Banks around the world and by some traders.

When in gloom, stick to La Banks....  At least the dividends are great.  I rarely sell my bank shares; they are my pillars.  I got rid of NAB in 2010 because it had the worst management.  There was a recent article on bank returns compared to earnings (interests) from bank deposit.  And when it compared the banks... NAB was the worst over that period.  I felt smart momentarily.

CTP

For along time, CBA is still my top value investment.  It has been extremely rewarding as I bought the bulk when it floated.  I couldn't buy the first tranche because we were paying off our mortgage.

Then State Bank of NSW came into the picture.  When CBA took over that bank, it was another nice paper profit.  And now as CBA rose and as it pays dividend, I have enjoyed a nice safe ride with this bank.

But hot on the heels in valuation of CBA, just the CBA in my super portfolio, is CTP.  It won't be long before it overtakes CBA... provided no disastrous drilling result is announced.  PIROA should have been the biggest but I sold off 30% of it to enjoy a huge cash profit.

For those who have made a lot out of CTP, worth pondering whether to sell some to realise your capital.  But as usual, you have to think whether it will rise further.  A profit is always a profit.  I am not selling unless I bought a parcel just to trade.... or if the share price goes crazy without any good announcement.

GTE

Just a got notification that I have topped up my GTE at 19c.  This stock has a similar pattern with ABU.  Next time it scores an extremely good result, I intend to use this parcel or another similar parcel to trade...

The closing price is 20c.

I used to do it with IOH, making a few hundred bucks each time.  Then a joint venture partner moved in and the share price jumped so I could not buy back my sold parcel.  Well, today, the share price has plunged below my last sell price because the joint venture turned sour... and iron ore miners are not the flavour today.

ABU

You can easily understand why people buy ABU when there is a good announcement.  But what puzzles me is who are these idiots selling when there have been repeated good announcements?

Either I can't comprehend the drilling results or these investors read numbers differently.  Perhaps, all the announcements have been hoaxes all along.

Today it went lower still.  For anyone interested in topping up ABU, based on a repeated pattern, never buy on good news.  Wait for a few days.  Likewise, sell on good news when the share price lifts and then buy back a few days later.  This pattern has been true to form.  It is bizarre.  This is not a recommendation to trade but it is tempting...

ABU

Fairly good announcement today.  The vein is thin but the gold concentration is high.  If you mine 100m at 0.3g of Au/ton, then at 30g/t you only need to dig 1m.  So I don't understand why the share price of ABU came down today.  Of course, it isn't spectacular but...

AUCO

Have a look at the annual report for AUC.  Why no one is interested in this stock puzzles me.

Today, I collect AUCO at 6.1c.  Because it is not a commonly traded stock, the buy and sell discrepancy is high.  Meanwhile the ordinary shares are falling in value.  I don't read the details in the report.  But I trade according to the trend.  If it is falling without bad news, then I buy.  So it is relatively good value.

That was the trough so I didn't get all the shares I wanted... and my bid expired at close of trade.

JPR

One day later someone discovered the significance of the Friday announcement and the share price has leapt by more than 11%.  My bewilderment is why did those idiots sell on Friday when the news is excellent.  They must be making financial decisions using the rectum.  And their brains have just been evacuated!

When to sell?

That is probably my most difficult decision.  And often I regret selling.

But there are situations where it is easy to decide.  When the share price goes bonkers, upwards, with no announcement at all.  Perhaps it is insider information but that is illegal.  And those people, if they are smart, cannot buy a lot as it would arouse suspicion.

When I need money desperately, I would sell the non-performers.  I am glad that this is rare.  But if another stock with excellent prospect has a good SPP, and I don't have enough cash, the I do sell.

Rarely, I trade.  I sell with the intention of buying back at a lower price.

Sometimes, I want to regain my capital.  So after retrieving what I paid for, I consider the rest of the stock as "free".

Whenever you sell, you can never tell whether it is going to fall or rise.  But if you make a profit, always be happy even if it turns out that you could have made more.

I don't advise or give tips on individual stock to sell.  That is something you have to decide.  GGG and MMR were doing extremely well... and then they collapse.  If you ask whether you should have sold earlier, then I would say it is a bloody stupid question.  But you could have made a huge profit if you did!  But then you could have sold CTP and bitterly regret it now....

OBL

For a while I was pondering why when the US government reported that China, USA, Argentina and Australia have the biggest shale gas reserves, very little interest is aroused down under.  And why China is not making great strides in exploiting its shale gas.  You can send some people into space, surely, you can harvest energy in your backyard.

For a long time OBL for me was a loss.  With all the good announcements, the share price continued to fall.  My first parcel was at 4.7c in 2010, next 3.2c, then 3.0c and my last lot at 2.5c in Sept 2011.  So today, at 4.9c, all my parcels are profitable.  Talking about faith in a stock's future.....

One of my commonest strategies for buying shares is: buy when the share price keeps falling but announcements are consistently good.....

CDU

Today, a good announcement and the share price jumped close to my last purchase a week ago.  But last 2 announcements were good too, yet the share price fell.  So why fall when good and why jump when good on another occasion?  The joys of investing!

JPR

Good announcement this AM.

http://www.asx.com.au/asxpdf/20121005/pdf/4295zlwmd1sv43.pdf

It does not worry me what the details are as long as oil is found over 100m.  But if the share price is below my buy price for my first parcel and the share price has hardly moved, I went in to top up this AM.

I topped up at 57.5c but it has dropped below the opening price!  You really wonder who are selling into good news!

SGQ

I have no idea why this stock has suddenly turned green for me.  Why suddenly?  And why not a long time ago?  My main annoyance is that I have been pondering whether to top up or not when I should have!  Based on my own adage, ie good news but share price continues to drift downward, I should have bought more just recently.

I am not complaining about paper profit.  It also annoys me that I only bought a small parcel to watch this stock and while I have been watching, I have not activated my own logic in stock selection to make it a "decent" parcel.

POG

POG has stucked between USD$1500 to 1900 for some time now.  The last time it raced to over USD$1900 per oz, I knew it was bad news. But at USD$1500, a lot of gold producers in my portfolios are doing fine.  In the meantime, AUD has remained much around parity with the USD.

Hence, overall, gold has been pretty safe from the Topsy-turvy of the market.  And the same applies to oil price, too.  Most of my speculative investments have been in gold and O&G.  But because it is 'speculative', the swings have tremendous.

So in recent weeks, I have picked up small parcels of ABU at 5.9c, RIA at 14c, TPT 30.5c, CDU at $4.80 and $4.605, BRU $2.80, HDX 4.7c, ELK 25c, CGX $2.69, AKM 9.6c, BDR 79.5c.  Where did a lot of the cash come from?  Sold PIROA for a very handsome profit.  Real cash profit :-)  But I could have made a lot more if I had sold later by just a few days  :-)    Still a smiley because I never regret real profit :-)

OYM

This stock promises a lot.  With credentials.  It has more gold to uncover in Vietnam but that is a lousy place to mine because of government interference and 'funny' taxes.  But the mine is still profitable, generating cash to fund further exploration.

What is better is the deposit in Sarawak.  There is already a 3 million oz of Au JORC resource.  And more to be found.

However, the share price has not reflected its discoveries.  Hence I am still underwater with this stock.  Until the Malaysian deposit is transformed into gold ingots, the share price can be anywhere whatever the drilling shows.

http://minesite.com/news/olympus-pacific-bounces-back-from-a-weak-june-quarter-with-big-plans-for-future-growth

WBC

Buy when people are dumping for no good reasons.

At the worst time for GFC, I started amassing WBC.  Luckily the bulk of my super WBC shares were bought then.  The Australian 4-pillar banking policy has been credited with making the banks strong and profitable.  So I didn't worry too much about the GFC and kept buying WBC.  Gail Kelly is the only female banker... so she must be bloody good.

Apart from great dividends, I am now onto 28% paper profit.

ABU

As predicted, the best drilling result from yesterday counts for nothing!  In fact, the share price went backwards.  That is great!  It gave me an opportunity to top up at 5.9c.  Of course, it went even lower.  It is rare to be able to buy at trough.

I always wonder which idiot sells with good news.  You hope it isn't the guy (who works for a big financial institution) who looks after your super fund.

PIROA

This is another of my 10-bagger.  Bought at an average of $0.176 over 1 years between Sept 2010 and Aug 2011, it is now worth $1.79 each.  But I have sold some in the last month, between $1.16 to $1.30.

This cannot be classified as a value stock now unless a lot more gold is found.  Tempting to sell more.

HDX

If you look at logic based on available news, then you won't touch HDX.  Campbell Newman is imposing higher royalty on coal, uncle Wayne is imposing new tax on coal, ports are congested, Mongolia and Indonesia are also competing, other mines and more coal are discovered/opening in Queensland and NSW, routes near Great Barrier Reef are being questioned, etc, etc.

But after hearing the CEO of HDX, you realize that his stock deals with EXISTING mines.  He blasts the coal mine so that extracting can occur.  He told us that he has enough work to generate profit for a few years if there is no new contract coming in.  Is he fibbing?  I would not know but it sounds like music to my ears.  So I bought after the presentation.  It went up then it is down to earth again.

CDU

Another good news but the share price has fallen back a lot since native copper was found (in-fill).  Since I topped up recently at $4.81 and $4.80, I went back in for more at $4.605.  If investors don't like good news, I am happy to relieve them of their misery.

CDU is progressing well with its processing plant.  We could see lots of action soon.

MOY

I read ABU's presentation in 2011 and I noticed that MOY has one of the cheapest EV/Au reserve so I bought it some.  I also liked its presentation at a Proactive Investors Forum but I didn't buy more.  Because I have a lot of different stocks, I cannot follow all of them closely.  But today, it has poured its first gold!  And if you look at its share price... it has jumped 50%.  Nice and sweet.  With any miners, until the mineral/metal is sold, you cannot generate a real profit unless you sell the tenement or get someone rich to pump capital into your stock without dilution.

CTP

Well, I am getting near 100% paper profit for my CTP investment.  But I have still got 2 initial parcels (small lots) below today's price.  I first entered CTP when it was full of red hot promises at 23c (2008) and 22c (20007).  It took a brave idiot to keep buying when the share price kept falling!  I liked the story the previous CEO spun.  When I attended his presentation in Sydney, I had the same faith but he was too slow moving for many big investors so he was oust.

But this euphoria won't last.  Until STO finds huge amount of gas or oil, the share price will drift downwards.  However if it moves upwards, there will be quite a few happy investors who have come to know about this stock through my old emails and this blog.  For quite a while until oil was discover in decent amount, it was at a loss.

ELK

http://www.theaustralian.com.au/business/opinion/elk-looks-well-as-it-roams-the-rockies/story-e6frg9lo-1226483783661

Unless you are a subscriber, you might not be able to open the above link.  ELK presented at the last Proactive Investors Forum.  The technology is not new.  It also evokes less controversy than fracking.  What is great for ELK is the ability to extract oil from 'exhausted' oil deposits and the backing of a USD$6-7 billion dollar company.  Most of the work has been done for it and it just have to go and squeeze out the oil from the ground.  The CEO is extremely confident about the boost in the share price but most CEOs are like that.  Nothing in the article is new but sometimes when a journalist takes an interest, the share price can move.

CTP

You wonder how some people get the gossip before the confirmation.  First in Hotcopper, then it is reported in The Australian this AM.  The ASX is not opened yet so there is no insider information issue here.

You can expect a hefty rise in CTP this AM.

The previous CTP head wanted a slow and steady progress but unfortunately, most big investors want fast profit.  They don't care if it is smaller but they want it quick.  The realistic outcome is, a small stock like CTP cannot fund its own progress.  The tenements cover nearly the size of Victoria so where is this minnow going to get its dough from?  It had not been highly successful with its drilling program and failed to live up to its own hype until one oil deposit was struck.

The other aspect is the value of getting the new CEO with 'connections'.  Mr Cottee was from Santos; hence the link today.  STO is funding the exploration which is very expensive.  If huge amount of gas is discovered then it is feasible to process it in remote Central Australia and then transported the cooled liquid to the market in special 'trains'.  The key word is "huge".  A few TCF of gas is not going to excite the market even though it is big but it isn't huge enough to support the cost of transforming gas into liquid for storage and transfer.

Oil is THE key.  And helium too if it is indeed found.  The US source of helium is waning.  If the exploration uncovers a big oil deposit, then the share rise will be phenomenal.  But like most oil explorations, failure rate is very, very high.

While it probably is still an exciting gamble to enter into CTP now, it will no longer have the prospect of a massive jump until massive amount of gas or oil is uncovered.

CTP

There are whisperings that STO has agreed to some kind of JV with CTP in Central Australia, funding the exploration.  So when it is announced to the market tomorrow, you can expect CTP share price to rise.

Those who bought CTP just before oil was discovered must be happy investors.  Getting rid of JH the previous boss, was a quick way to make profit but I am not so sure it is better in the long run.