KAR JIN

The best time to buy shares or rather the most profitable time to buy shares is when there is good news but people are dumping or hardly buying.

My most recent purchase was KAR when good quality light crude was discovered off Brazil.  I paid more than $7.00 for each share long BEFORE oil was discovered.  When oil was found in Santos Basin, I topped up immediately with the little fund I have left at $6.01.  Now it is climbing to $6.48.  And if the second drilling confirms the seismic impression, then the share price will go over what I paid for in the past.

And the other was JIN, a top up of 1000 shares at $2.51.  It is making advances into the Americas... and best of it, it actually pays a dividend!  It is now $2.90/

Resource sector

Many things do not add up.  There must be some brilliant investors out there.  Yet, either I fail to understand how profit is made or the intricacies of the financial world, or the law of simple arithmetic does not apply to the market place.  Many many years ago, when PE ratios for some stocks in the Tokyo Stock Exchange  went over 1000, the Japanese were telling the world that they don't understand how the TSE works.  Well, the Japanese have not recovered from that exuberance.

The Chinese government is going to stimulate its economy, USA economy is improving, EU is stagnant (in status quo) and AUD and the POG have remained steady.  Metal prices have not plunged nor rallied.

So why industrials are zooming ahead while resource stocks are crumbling, I have no idea.  But neither would I sell my stocks.  In fact, I am watching...  It does not help that gold producers are coming up with news like falling gold production, processing plants failing, sovereign risk, debt problems...

KAR

As my cash reserve is very small, I can't buy big into KAR so after buying at $6.08, it has gone up to $6.18.  I topped up also because I bought at a higher price long BEFORE oil was discovered in Brazil.  Soon after I bought, it had a failed exploration in the NW Shelf off WA.

KAR

25m of oil column is not huge... but this is not the primary target!  When it tried to flog this Brazilian tenement a year or two ago, nobody wanted it!  Yet that area is known to have billions of barrels of oil.

Let us see what will happen to the share price today.

Goldman Sachs JB Were

After years of association with JB Were, I have closed my Margin Lending Account with them.  Paid off the remainder owing and transferring the equities to CommSec.  That means other than credit cards, I have no debt.

My biggest disappointment with the big city brokers is there is no desire to nurture small investors.  There is no favour, no special deals during floats, no special attention, no advice other than when you are buying, nothing, nothing, nothing.  How do they expect me to continue trading with them?  In fact, once, I was asked to sell News Corp Ltd because their big client (Rupert of course) wanted to buy more of News Corp Ltd shares.  I only realized that fact AFTER I sold.

In many ways, I am glad I have moved.  The website access that I get via GSJBWere has minimal information only.  So after exiting this broker and the old Citibank, I am on my own.  I hope I will do better!  But as I get closer to being a Senior Citizen, I will be indulging less in high risk stocks.  The banks have been good to me, other than NAB which is still wallowing in the UK.  Luckily, my biggest bank investments are CBA and WBC.

POG

If you follow POG, you will know that based on its pattern of late, never buy gold bullion when it is on the rise AND rise.  Buy a short while after it plunges.

If the rise is true and sustained, the share price of gold producers would not be at their doldrums.  It is also a pity that producers who should be making big profit are making bit profit.  Hence the market's skepticism is not misplaced.  Why the management is so bad is hard to justify.  Perhaps someone is taking the profit out as remunerations...

POG

Definitely better than yo-yo at entertaining.  This kind of rises and falls over the last few months is most likely manipulation by some investors.  The only consistency is the overall stability.  But this makes no difference to the selling off of gold stocks, including producers.  The logic is so warp that it is impossible for me to buy unless someone is dumping good stocks.  My ABU buy bid expired yesterday because there wer not enough dumb sellers dumping.

JIN

Someone dumped their JIN shares.  It is rare but so far, mine is the trough  :-)

But smiley never last so by afternoon, I might not be laughing anymore.  Still, it is for the long term.  I rarely buy non-resource stock.  This is one; partly because I like the fact that there is dividend from that stock for me.  And gambling is not as badly affected in times of bust.

PVD

I haven't bought many stocks recently.  But when a good announcement came out today, the share price moved up... and then fell below the closing price from yesterday.  So I topped up at 73.5c.  There is a strong possibility that PVD may have overpaid or the other oil majors are uninterested in that patch of water because they know it isn't promising.  Already, those major oil companies are there and the adjacent tenement has found oil.  We will see what happens...

PVD... WHN and TPT

PVD:  You have missed the boat but maybe if you pay more for the ticket, there is still room on board.

But TPT has languised because its JV partner did not excite the market nor did the contribution by the farm-in company.

And in the meantime, WHN is also ignored by the market.  But this could be a nothing company or big earner.   Big gamble!

Gold stocks

According to The Australian's RB, Chinese companies are seeking to buy big in gold stocks.  Why not?  Nobody wants our gold stocks, you might as well buy them cheaply.  The arithmetic just does not work out.  POG still over USD$1600 per oz and the cost of mining has remained way below that.  That profit is ignored by the market.  While it is true that capital is difficult to raise to explore or develop mines, the selling-off of gold stocks applies to producers as well!

PVD

It is getting $15 million upfront, cash.  And PXP from the USA will fund the cost of drilling up to $215 million.  All figures in USD.  PVD is only worth.... AUD$49 million.  For that contribution, PXP will take over as operator and earn 52% of the venture.  I think the Moroccan government owns 25%.  I consider that to be a good deal because it is impossible for PVD to find over USD$200 million for the more expensive phase of exploration.

Presumably none of my readers bought this stock!  I am considering topping up my WHN again...

PVD

Trading halt for PVD this AM because of a farm-out.  The share price when it reopens will depend on which big boy moves in and how much they contribute.  Since PVD has already jumped 172% since June 2012, I won't be making a loss!