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spunko

Credit deflation and the reflation cycle to come (part 2)

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27 minutes ago, kibuc said:

In case anyone is still interested in junior mining space - and I don't blame you I've you have long given up - New Gold reported yesterday. Rainy River did very well in Q3 and a similar performance in Q4 would see them beat the yearly guidance. New Afton also looks poised to beat guidance for gold and meet for copper.

As is now usual with NG, I think it's reasonable to expect a surge in SP between now and the Nov 6, when financials are reported and the reality sets in.

Sold ABX, Yamana, Sibayne

Sold 50% of Harmony after it went up 100% so i got my investment back and will let the remaining run

Still have a small punt on Eldorado which is up 88% i will leave that to run

My biggest holding which i plan to hold is Wesdome which is up around 30%

 

Edited by DoINeedOne

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21 minutes ago, sancho panza said:

PS-you got a take on the recent price action in HOC MP? add time?

Hit hard by Peruvian Brexit like political trauma (entire parliament got sacked, failed political coup), im happy to hold but its sadly not low risk anymore imo as one of the candidates in next years election is Corbyn like.  If it drops down to 160's again ill add like I did last time, its balanced by that rare earths project they bought 100% of is of great interest in the long run and the rest of is ticking along nicely so its not all bad news.

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1 hour ago, sancho panza said:

I saw Sandstorm had a good Q3 but am waiting to hear about Guyana and Superiror.If you come across anythign could you post it please?

 

Where do you follow the updates?Any go to news aggregator for the space?

Nope, no news aggregator, I simply start my day by visiting each company's website.

I currently own GUY, GPR, EDR, AXU and IPT, and also follow WDO, HMY, YRI, NGD and FR. Scanning 10 websites doesn't take longer than two minutes, unless there's actually some news.

GPR, EDR and NGD have reported already - good, bad and really good, respectively. I'd expect WDO, FR, YRI and GUY to mid-week next week at the latest, AXU and IPT will probably wait for the financials and HMY won't report Q3 at all, as they report on a bi-annual basis.

That being said, we're talking about junior mining sector, the scum of the industry, so if the production turns out to be sub-par I wouldn't be surprised to see the report delayed and hidden within the financials, at least with some of those names - looking at you GUY in particular.

1 hour ago, sancho panza said:

I think if NG can hang on until it's hedging arrangements end and -assuming- a solidly higher gold price,it could yet surprise but happy to defer to people with more knowledge on it. We bought them in 2017-ouch!

I'm afraid your hope might be misplaced. As if their 2019 hedge wasn't bad enough ($1300/oz ceiling, FFS), they have already hedged 2/3rds of their 2020 RR output as well!

"In addition to the current corporate hedging strategy for 2019, the Company has entered into gold price option contracts covering 168,000 ounces of gold production for 2020 that provides downside price protection of $1,300 with upside to $1,355 from January to June and $1,415 from July to December. Details of these contracts are included in the Company’s Second Quarter Financial Statements."

Full credit to Adams for turning Rainy River around, and for pushing on with New Afton expansion. Operationally they finally seem to be in good shape. However, their financials are a mess, only exacerbated by their inability to take advantage of current and future gold prices. They'll have to dillute like there's no tomorrow if they are to meet their obligations. It's already started, with that $150mil deal in August, and there will be more to come.

Edited by kibuc

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11 minutes ago, kibuc said:

 

I'm afraid your hope might be misplaced. As if their 2019 hedge wasn't bad enough ($1300/oz ceiling, FFS), they have already hedged 2/3rds of their 2020 RR output as well!

"In addition to the current corporate hedging strategy for 2019, the Company has entered into gold price option contracts covering 168,000 ounces of gold production for 2020 that provides downside price protection of $1,300 with upside to $1,355 from January to June and $1,415 from July to December. Details of these contracts are included in the Company’s Second Quarter Financial Statements."

Full credit to Adams for turning Rainy River around, and for pushing on with New Afton expansion. Operationally they finally seem to be in good shape. However, their financials are a mess, only exacerbated by their inability to take advantage of current and future gold prices. They'll have to dillute like there's no tomorrow if they are to meet their obligations. It's already started, with that $150mil deal in August, and there will be more to come.

That's crazy, the junior gold miner to invest in if gold prices are expected to crash!  

I am guessing here but those quite low caps suggest selling well in the money calls as a way to raise some cash now?

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16 minutes ago, Bear Hug said:

That's crazy, the junior gold miner to invest in if gold prices are expected to crash!  

I entertained that thought for a while, but I don't think it holds up to scrutiny. Selling at $1300/oz or $1400/oz, they are still losing money every quarter. If gold drops, at $1300/oz for majority of their production and whatever low price it's going to be for the rest of it, they will struggle to report operational profits - absolutely impossible now, and still unlikely after putting all their planned cost-cutting measures in place. But that's only one part of the equation. On top of that there are interest payments amounting to $50mil per year. Until that goes away, NG profitablity is a pipe dream I'm afraid. There are a losing proposition in a bull run and they will be equally losing one in a bust. They need to dilute and/or sell New Afton (in the current copper market though? ugh!) and use the proceedings to significantly reduce their debt.

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4 hours ago, Majorpain said:

Hit hard by Peruvian Brexit like political trauma (entire parliament got sacked, failed political coup), im happy to hold but its sadly not low risk anymore imo as one of the candidates in next years election is Corbyn like.  If it drops down to 160's again ill add like I did last time, its balanced by that rare earths project they bought 100% of is of great interest in the long run and the rest of is ticking along nicely so its not all bad news.

Yeah,I liked the look of that purchase.I added a few this morning.

 

Lot of upside if the Corbynista loses?Luckily not got too much Peruvian exposure proportionately across the PM  miners we hold.the 150 level is the three year low.Fres getting pummeled as well.

 

Chile looks a good place to invest given it's ewealth of commodity assets and generelly subdued poltical scene

 

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3 hours ago, kibuc said:

Nope, no news aggregator, I simply start my day by visiting each company's website.

I currently own GUY, GPR, EDR, AXU and IPT, and also follow WDO, HMY, YRI, NGD and FR. Scanning 10 websites doesn't take longer than two minutes, unless there's actually some news.

GPR, EDR and NGD have reported already - good, bad and really good, respectively. I'd expect WDO, FR, YRI and GUY to mid-week next week at the latest, AXU and IPT will probably wait for the financials and HMY won't report Q3 at all, as they report on a bi-annual basis.

That being said, we're talking about junior mining sector, the scum of the industry, so if the production turns out to be sub-par I wouldn't be surprised to see the report delayed and hidden within the financials, at least with some of those names - looking at you GUY in particular.

I'm afraid your hope might be misplaced. As if their 2019 hedge wasn't bad enough ($1300/oz ceiling, FFS), they have already hedged 2/3rds of their 2020 RR output as well!

"In addition to the current corporate hedging strategy for 2019, the Company has entered into gold price option contracts covering 168,000 ounces of gold production for 2020 that provides downside price protection of $1,300 with upside to $1,355 from January to June and $1,415 from July to December. Details of these contracts are included in the Company’s Second Quarter Financial Statements."

Full credit to Adams for turning Rainy River around, and for pushing on with New Afton expansion. Operationally they finally seem to be in good shape. However, their financials are a mess, only exacerbated by their inability to take advantage of current and future gold prices. They'll have to dillute like there's no tomorrow if they are to meet their obligations. It's already started, with that $150mil deal in August, and there will be more to come.

The thing with the Juniors is that that's where the mulit baggers will come if there is a full on bull market-which I think is coming.As you allude there's a real need to spread yourself about a bit

 

Sorry to hear about NG,always appreciate your detailed take on things.We'll sit it out.Too big a loser to cover unless I can find a surefire 4 bagger to hove it into.

RR will end up making someone else a lot of money.

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2 hours ago, CVG said:

FTSE going gangbusters - presumably on talk of Brexit deal

 

UK facing stocks going from oversold to over bought in a day.

.Hosuebuilders plus Dunelm look good for a short next week.

 

And what about Cable 1.27............all recent purcahses of Euro/US oilies going red.

 

 

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UK cyclicals blasting higher as i said they would.Technicals were amazing for a rally.Lots of them will carry on up i think where others will fall back.Its laughable really how wrong sided everyone was in the media etc.Every day people were saying sterling was going lower yet the commercials were going long and sterling was going to turn.UK domestics are heaving skewered to sterling.The markets have been amazing this last year for macro strategy  driven investing.Once the dollar weakens things will get interesting as thats when the heavily over valued sectors should crack in the US.Industrials are probably already in recession and it might be their results that shock the markets.

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3 hours ago, CVG said:

FTSE going gangbusters - presumably on talk of Brexit deal

My FTSE tracker up 0.6% today while my income portfolio of individual stocks is mostly up 5 to 10%.  And glad I sold my CAD for GBP at the bottom a few weeks back.

Edited by Harley

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55 minutes ago, DurhamBorn said:

Technicals were amazing for a rally.Lots of them will carry on up i think where others will fall back.

Seems very much so.  Today seemed to put the technicals on steroids.  Those stocks already heading down hit hard and those already on the turn bounced higher.  Possible bottom fishing with those stocks at monthly lows doing well.  Today did not float all boats and this could be a theme going forward and possibly not so good for trackers.

Edited by Harley

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56 minutes ago, DurhamBorn said:

UK cyclicals blasting higher as i said they would.Technicals were amazing for a rally.Lots of them will carry on up i think where others will fall back.Its laughable really how wrong sided everyone was in the media etc.Every day people were saying sterling was going lower yet the commercials were going long and sterling was going to turn.UK domestics are heaving skewered to sterling.The markets have been amazing this last year for macro strategy  driven investing.Once the dollar weakens things will get interesting as thats when the heavily over valued sectors should crack in the US.Industrials are probably already in recession and it might be their results that shock the markets.

At this moment in time my worst performing share on the day is +4%, we can always rely on CNA to do a bit of lagging xD

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20 hours ago, sancho panza said:

No, it was more to do with reserves,the way they're run etc.Key take home for me as a speculator was to leave well alone.I defer to posters with a deep insider understanding of an industry,especially when they've a history of posting constructive,informative stuff.There are better,less risky ways to play the oil/gas market eg have a look at a few of the better shares listed in the XOP/FCG ETFs for mid size producers+nat gas.mainly US listed.Some down 90% off peak and nowhere near insolvent.

Big problem with emerging market shares is the forex risk.At the mo,I'm buying $ shares at with cable at 1.22.Knowing 1.40 is highly likely.But I see more upside in the stocks than I do downside in cable.I could be wrong there.

I'm happy to take forex risk in AUD/CAD/USD/EUR.

 

 

thanks again SP, I didn't want to miss out, but very happy not to take unnesessary China risks when can buy US, etc, alternatives.

I will take another look at the mid-sized US ones, but when I recently looked most were into fracking, some were 100% frackers, and this turned me off somewhat because I am looking to buy and hold and think fracking process has a rather short time horizon. For example Devon Energy looks good and only small part of their business is fracking. 

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22 minutes ago, Democorruptcy said:

At this moment in time my worst performing share on the day is +4%, we can always rely on CNA to do a bit of lagging xD

Indeed.  Stalwarts GSK and ULVR in the red for me which is telling.  BP and RDSA also which is great news!  BATS and IMB continue to move to their own drumbeat.  Pretty much everything else dark green.  Happily, I'm almost fully allocated on the FTSE income portfolios and am looking overseas, especially the US, where hopefully the time is right on some picks. Just need to consider the need for some currency hedges.  Also need to decide if PMs are just pausing and maybe add some miners and physical silver (before a possible Brexit month end).  Hopefully commodities will broadly come into play soon (been too quiet too long!).

Edited by Harley

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20 hours ago, Majorpain said:

Chinese Communist party ultimately owns everything in China, there is no guarantee that your shares will not be "nationalised" at some point in the future if its no longer in their interest to have outside investors.  There are also stories abound about Chinese companies having two sets of books, one set for foreign investors and the real numbers for the Chinese government.

Majorpain, yes future US/China deteriorating relations and/or internal Chinese social/political collapse (will it make it to its 80th birthday?, USSR didn't!), and I suppose the strains are showing already. But does that mean you wouldn't consider buying any Chinese stocks?

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21 hours ago, DurhamBorn said:

Exactly.Card Factory is a fantastic business.The one near me always has people in,steady stream.Their new range priced at the higher end at £1.69 etc is way superior to anywhere else for twice the price.Everyone goes there for balloons etc as well for kids birthdays.They are about to upgrade their website to multi channel,so im guessing they are about to launch click and collect.I would expect that will do very well once people know about it for occasions buying /kids birthday/hen night/key birthdays etc.Market has kicked them down due to profits flat lining even though they are expanding shops,but id say holding steady in a brutal market is a good performance.They have signed a deal to supply half of Aldi's stores now (400+) after a trial in 100.They need to keep the debt down though as its a bit too high for a low asset business,but free cash should remain robust.Key danger to them is probably the other discounters increasing their ranges,but its unlikely anyone will get close to them in price/quality/range.I would expect theor EPOS data is giving them a lot of info now as well.Increases in NMW will hit them though,they might have to increase prices at somepoint,though id expect they could move things up 10% without much trouble.

DB, what do you think of Hays surprise acquisition of Thomas Cook? It seemed obvious after the collapse to all 'experts' that the high-street travel agent model was dead... until of course it wasn't.    

Edited by JMD

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4 hours ago, CVG said:

FTSE going gangbusters - presumably on talk of Brexit deal

They must have learned from Trump. He's managed to string out the lie that "trade talks are going well" for over two years.

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7 hours ago, kibuc said:

In case anyone is still interested in junior mining space - and I don't blame you I've you have long given up - New Gold reported yesterday. Rainy River did very well in Q3 and a similar performance in Q4 would see them beat the yearly guidance. New Afton also looks poised to beat guidance for gold and meet for copper.

As is now usual with NG, I think it's reasonable to expect a surge in SP between now and the Nov 6, when financials are reported and the reality sets in.

Absolutely. Life is firmly getting in the way for me right now so updates are appreciated (and that goes to everyone else posting too). 

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1 hour ago, Democorruptcy said:

At this moment in time my worst performing share on the day is +4%, we can always rely on CNA to do a bit of lagging xD

ha indeed,my dad said the same thing,his words were even that bloody thing is up xD .Really pleased with portfolios today,they did exactly as i hoped on a sterling turn.Shame it couldnt of waited a couple of months though for you know what)B|

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39 minutes ago, JMD said:

DB, what do you think of Hays surprise acquisition of Thomas Cook? It seemed obvious after the collapse to all 'experts' that the high-street travel agent model was dead... until of course it wasn't.    

Hays is very well ran and most people in the north use them sometimes.They are very good at what they do.If i want to go and see the Sanremo festival in Italy by train and a hotel,go in there and they will sort the lot for you,many people still want that service.

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48 minutes ago, JMD said:

Majorpain, yes future US/China deteriorating relations and/or internal Chinese social/political collapse (will it make it to its 80th birthday?, USSR didn't!), and I suppose the strains are showing already. But does that mean you wouldn't consider buying any Chinese stocks?

Speaking for myself, 100% no.  There is no need when there are 1000's of other stocks to buy (some of which are very high quality) on exchanges in countries where shareholders actually have rights.  The China Hustle is a good film to watch if you have time, load of people got severely burnt and it explains how they relieved investors of their money.

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5 minutes ago, DurhamBorn said:

ha indeed,my dad said the same thing,his words were even that bloody thing is up xD .Really pleased with portfolios today,they did exactly as i hoped on a sterling turn.Shame it couldnt of waited a couple of months though for you know what)B|

Is CNA still on your buy list/close to or at the bottom of your ladders? I never got round to buying any, and then saw reports of falls come through on here every now and then, so just decided to wait. 

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