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XMFSinchiruna (27.02)

The Beale-Street Beat

Recs

39

May 07, 2012 – Comments (24) | RELATED TICKERS: GG , PPP , EGO

I've just returned home from attending the Beale Street Music Festival in Memphis. As many of you know, I have kept a constant vigil over these markets over the past several years, and have even tried to stay connected during conferences and mine-site visits so that we never skipped a collective beat. Getting away for several days was an uncommon treat, but please know I am very cognizant of troubling market condition of the equities in my purview. As one who is heavily invested in the mining equities, you can bet that my own frustration with the horrific action in this sector is as visceral it gets. And yet, I remain 100% calm. I know that fundamental value will always trump a slump.

http://www.fool.com/investing/general/2012/04/27/the-shocking-15-year-bear-market-for-gold-stocks.aspx

http://www.fool.com/investing/general/2012/04/11/dont-give-up-on-gold.aspx 

I know that the French peoples' demonstrated fear of austerity is surpassed only by that felt by politicians the world over who may have briefly considered responding to the gravity of our predicament by targeting out-of-control public expenditure. They have just been reminded that threatening to inject austerity into a subsidized, stimulated, and data-massaged illusion of relative economic stability is tantamount to swift political suicide. As a result, the global political stage has been set for continuing to follow (what I consider) the fatally flawed strategy of spending, stimulating, and printing their way out of what may yet prove the greatest economic crisis in the history of the world.

I don't want anyone out there to adopt my conclusions as their own. I wish only for my fellow Fools to examine the whole of our collective predicament through a critical lens that recognizes the enormous stakes involved in this entire Keynesian experiment in crisis management. For myself, I am 100% satisfied that $2,000 gold, at the very least, is an unavoidable outcome. The window of opportunity to pursue an alternate, more rational response to the crisis, in my view, closed a few years back. I am personally not the slightest bit deterred by the unseemly action in the mining equities. Although it is far more severe than I ever would have imagined possible at these metal prices, and some reasonable adjustments to long-term equity price targets must therefore be considered, I consider the eventual influx of investment capital into these stocks just as unavoidable as the rise in the metal prices themselves. 

It can be very frustrating, indeed, to watch your most bullish stock picks careen into a seemingly bottomles pit of weakness. Those invested in this space through the earlier chapters of the financial crisis recall the sensation. Where repeated manipulation by deep-pocketed entities -- operating with apparent impunity -- is perceived as a contributing cause, it's like having lime juice sprayed into our wounds. But losses don't become losses until you sell, and this long-term-focused Fool is prepared to sleep in the nest he's made with this menagerie of metal miners. I was reminded this past week, just as was during a difficult period during 2008 and 2009, of the importance of striking a positive balance in our lives such that the manic whims of these markets are rendered powerless to impact our overall sense of well-being. Though we may invest in precious metals, nothing is as precious as the bonds we forge with those around us. Though we may be inclined to pity our own plight while watching rivers of red flowing through our mining stock portfolios, it is critical to maintain perspective. I've just recharged my own batteries with fun-in-the-sun (and the "super-moon"), terrific music (excluding Jane's Addiction, whose new stuff is utter garbage), and great company. By whichever means you find most effective, I wish each of you well in recharging your own batteries. Fool on!

24 Comments – Post Your Own

#1) On May 07, 2012 at 6:21 PM, Sturmudgeon (< 20) wrote:

Thanks, Sinch:  Happy that you had a good time... thanks for "re-confirmation"....  and your continuing great articles/comments.

by me, they are MUCH appreciated!

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#2) On May 07, 2012 at 8:47 PM, tdonb (< 20) wrote:

Hey, I just found out about the PPP warrants. They are good for one share at Cdn 8.00 in July of 2015.

Seems crazy. What do you think?

 Thanks

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#3) On May 07, 2012 at 10:48 PM, skypilot2005 (< 20) wrote:

I like to "buy when others are fearful".

Hmmmm.

I think I've heard that somewhere....

LONG with solid conviction,

Sky

Note:  I served with a guy in Nam’ that had every album Elvis had made.  He left before I did and made it back to Memphis OK. 

I like The Rolling Stones.

Sky

 

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#4) On May 07, 2012 at 11:06 PM, charliedawgg (< 20) wrote:

Darn it, Sinch...I wish I had known that you were gonna be in the Memphis area. This is my stomping ground; I would've loved to buy you a beer (ever tried Fat Tire?). If you're ever back in the area again, drop me an email at c_wade@bellsouth.net and I'll buy you a round...or seven. God knows I owe you that and more. I recognize that when one is trying to recharge one's batteries, talking shop may be utterly undesireable, so I can guarantee there will be no incessant questions regarding Foolish issues. Its and open offer. It'd be a charge to meet ya and help you explore some more of what Memphis has to offer...sans the muggings and drive-bys, of course. Cheers, best regards, and many thanxx.

Charlie

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#5) On May 07, 2012 at 11:16 PM, charliedawgg (< 20) wrote:

Now, on an unrelated note, what's your take on the beating that Thompson Creek is taking presently? I expanded my position today in the (perhaps overly-optimistic) hopes that the drop in share price is just one of those visceral/emotional knee-jerk reaction to a lackluster quarterly report paired with the announcement regarding the senior note and tangible equity cluster$%*&. Any thoughts? Thanxx yet again.

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#6) On May 08, 2012 at 8:53 AM, XMFSinchiruna (27.02) wrote:

@#2, I just had a quick look. I may have to sell some of my shares to purchase the warrants. That's one of the nicer looking spreads I've seen in warrants, and still a good chunk of time remaining. Thanks for the heads up! Anyone else like what they see there? I hadn't even recalled they were issued, but now it rings a bell.

@#3, Sky... thank you for your service, both to your country and to this community! I'm more of a Beatles guy myself. :)

@#4, Thanks much for the kind offer charliedawgg! I certainly will drop you a line if I make it down again. I have a mind to put together some kind of gathering for us sometime after we're reaped sufficient profits from the space to all make the trip. :)

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#7) On May 08, 2012 at 9:33 AM, ryanalexanderson (< 20) wrote:

Sinch, tdonb, 

I've heard Rick Rule's podcasts talk about warrants as a good way to get into the mining shares. I must confess I know very little about them, except that they are some type of pseudo-option. Is there any difference between the two, other than that the warrant is issued by the company itself? Are there any suggested reading materials for learning about them, other than Google and Wiki?

Thanks,

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#8) On May 08, 2012 at 11:16 AM, SN3165 (< 20) wrote:

@ TDonB, I am long the '15 PPP warrants, I own about 30 - 70 warrants/shares of Primero. 

@ #7, Check out my latest video post which will give you some of my favorite warrant plays and some info. on them.

http://www.youtube.com/watch?v=49srwMY9V1A

For further reading check out this site, great info! 

 http://preciousmetalswarrants.com/LearningCenter.html

(I am not a subscriber there, I just like the learning center info. they have).

* Use limit orders and remember to sell at least 2 weeks before the expiration date to be safe *

I like the New Gold '17's, Primero '15's, SLW '13's, and Sandstorm Gold's '14's. 

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#9) On May 08, 2012 at 11:18 AM, ryanalexanderson (< 20) wrote:

Thanks SN! Just what I wanted. 

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#10) On May 08, 2012 at 11:20 AM, SN3165 (< 20) wrote:

Blog posts

http://caps.fool.com/Blogs/pm-warrants-a-huge-boost-to/638724

http://caps.fool.com/Blogs/picked-up-some-primero/663538

 

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#11) On May 08, 2012 at 11:22 AM, SN3165 (< 20) wrote:

This is another great resource, although the chart hasn't been updated in a long time. Study this chart. 

http://canadianwarrants.com/values/current.htm

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#12) On May 08, 2012 at 11:46 AM, ryanalexanderson (< 20) wrote:

Excellent. I wonder if the chart in that last link would be worth reproducing in a real-time screen scraper.

A little side project for me...Thanks! 

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#13) On May 08, 2012 at 12:49 PM, XMFSinchiruna (27.02) wrote:

Charlie Munger may think you are all uncivilized jerks, but I have much love for all you golden Fools. :)

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#14) On May 08, 2012 at 2:06 PM, XMFSinchiruna (27.02) wrote:

http://www.zerohedge.com/news/santelli-encumbered-youth-us

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#15) On May 08, 2012 at 8:34 PM, tdonb (< 20) wrote:

SN3165

Yes, I have done well with the Sandstorm 14s already. Now interested in the Primero. Will have to look at the New Gold and Silver Wheaton.

I do wonder about how far away one should sell the warrants. For example, if Primero is not near 8 in 2014, I would start to worry.

Thanks for the links.

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#16) On May 08, 2012 at 9:00 PM, skypilot2005 (< 20) wrote:

#13) On May 08, 2012 at 12:49 PM, TMFSinchiruna (53.20) wrote:

 

Charlie Munger may think you are all uncivilized jerks, but I have much love for all you golden Fools. :)

Sinchi,

I've kept my comments regarding Mr. Munger & Buffet and thier glaring "miss" on the true value of gold limited to the Fool's main page.

I have great respect for each man as investors.

But, here's "a little something" I read recently.  

 

"One would think that a man as wealthy, as smart, and as old as Charles Munger would have known better than to suggest that people who buy gold are uncivilized. “Gold is a great thing to sew into your garments if you’re a Jewish family in Vienna in 1939,” Mr. Munger told Rebecca Quick of CNBC, “but I think civilized people don’t buy gold, they invest in productive businesses.”

The fact is that people who bought gold a decade ago were far better positioned than those who put their money in Mr. Munger’s company, Berkshire Hathaway. For the value of a share of Berkshire Hathaway has collapsed over the past decade to barely more than 74 ounces of gold from the 238 ounces it was worth a decade ago." 

The complete article:

http://www.nysun.com/editorials/the-munger-games/87811/

The Munger Games

 

5/6/12

Sky

Official Web Link Assistant to Sinch 

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#17) On May 09, 2012 at 7:14 AM, skypilot2005 (< 20) wrote:

Speaking of PPP:

http://www.reuters.com/article/2012/05/03/primeromining-idUSL4E8G357K20120503

UPDATE 1-Primero Mining adj profit jumps on higher production

5/3/12

http://finance.yahoo.com/news/primero-reports-strong-first-quarter-110000019.html

 

Primero Reports Strong First Quarter 2012 Results; Record San Dimas Production Since Acquisition

 

5/3/12 

Sky

Official Web Link Assistant to Sinchi 

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#18) On May 09, 2012 at 7:39 AM, skypilot2005 (< 20) wrote:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/5/8_Embry_-_There_Is_a_War_Going_on_Because_Fiat_Money_Is_Dying.html

 

Embry - There Is a War Going on Because Fiat Money Is Dying

With global stock markets plunging, along with gold and silver, today King World News interviewed John Embry, Chief Investment Strategist of the $10 billion strong Sprott Asset Management.  Embry told KWN “There is a war going on right now” because “the pure fiat currency system is on its last legs.”  Embry also said “Europe is in desperate shape” and the implications are “horrific” if the US dollar loses its reserve status.  Bur first, here is what Embry had to say about gold:  “Gold is falling because the powers that be, with their paper shenanigans, are knocking the hell out of it.  We see tremendous physical demand.  Massive amounts of gold are going through Turkey, into the Middle-East.  Chinese imports are strong.  To me that’s the ultimate antidote.

John Embry continues:

 

“This type of action is always orchestrated at a counterintuitive time, where it doesn’t really make logical sense.  It works because it keeps the vast majority of society away from the sector.  There is a war going on right now, and they are trying to bolster the confidence level of the hearts and minds of fiat money lovers the world over.

 

This is happening because what’s going on is Europe is in desperate shape.  Spain has announced the government is going to have to bail out the third largest banking entity in Spain.  All of these things speak to an enormous creation of new liquidity.  Without that liquidity, the system is going to go down.

 

The underlying problem that sort of goes unspoken, is the pure fiat currency system is on its last legs....

 

Sky 

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#19) On May 09, 2012 at 10:50 AM, eeibbay (< 20) wrote:

Just wondering if you have any thoughts on the Jaguar debacle? Been watching it since the initial takeover rumours in November but it just seems to be one disaster after another.

regards

bbay

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#20) On May 09, 2012 at 2:25 PM, XMFSinchiruna (27.02) wrote:

bbay, extreme danger imo. Sure, it could pop back strongly after a selloff like that, but we could just as likely have lawsuits and unsavory revelations ripping it down further. I have zero interest in the stock, and along with GSS it is one of the sector's most dramatic implosions. I've been burned far too many times by inept management of both companies, trying to sniff out value by giving them an ounce of the benefit of the doubt, but over and over they have proven that benefit of the doubt was undeserved.

Like I said, it could pop strongly after a selloff of that magnitude, but I'd rather just go to my local casino and at least enjoy the experience of such a risk/reward.

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#21) On May 10, 2012 at 10:28 AM, eeibbay (< 20) wrote:

Thanks Sinchi

I was thinking the same thing. I think the final nail in the coffin may be the Ian Bezek article on SA suggesting it it is a good buy. There are too many good companies out there that are great bargains at the moment. Now, where did I put my DD on Thompson Creek ??

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#22) On May 13, 2012 at 10:26 AM, skypilot2005 (< 20) wrote:

http://finance.yahoo.com/news/aurico-reports-q1-financial-results-212600852.html

 

AuRico Reports Q1 Financial Results

5/9/12

 

Sky

Official Web Link Assistant To Sinchi 

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#23) On May 19, 2012 at 9:01 AM, skypilot2005 (< 20) wrote:

http://www.theaureport.com/pub/na/13396

TGR: Argentex is developing its Pinguino silver-gold project in the Patagonia region of Santa Cruz province. What do you make of that deposit?

AK: The risk-reward profile of Argentex is different than that of Minera IRL, but I still think it's a compelling profile. It has a resource estimate coming out this quarter, which should prove up the highly prospective nature of its resource, which is a silver resource. This is an asset that is trading at $0.10–0.12/ounce. The company has a bit of cash. It is drawing down about $200,000/month. It has probably $9.5M cash on its balance sheet. I am particularly impressed with the chief geologist over there, Diego Guido. He is also a professor at University of Buenos Aires and has access to other interesting perspectives within the geology space.

TGR: That stock is down about 20% this year. Does that make you nervous, when you see a company sliding 20–25% in less than half a year?

AK: We bought it about 30% lower than current prices. So it's down on a year-to-date basis, but it's a recent acquisition for us. So we're actually quite pleased with where it is at this juncture. I think it speaks to who we are here at Clear Harbor Asset Management, which is a group of patient investors, and it also speaks to a little bit of luck.

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#24) On May 19, 2012 at 9:36 AM, KeithAngel (< 20) wrote:

just as Joseph answered I'm shocked that anyone can profit $5874 in four weeks on the internet. have you read this web page(Click on menu Home more information)  http://goo.gl/4UkWY

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