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Credit deflation and the reflation cycle to come.


DurhamBorn

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3 hours ago, DurhamBorn said:

@sancho panza what PM miners are on your radar at the moment,?,any thoughts on Tahoe Resources?.I ran my scans last night and they are showing at number 2 on my rubber band buy list and im thinking of buying.

For what it's worth, until they resolve their Escobal issues and possibly replace their CEO I'm not touching Tahoe with a 10-yard pole. They are criminally mismanaged. They might go up with the tide, but I'd expect other boats to do way better.

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16 minutes ago, kibuc said:

For what it's worth, until they resolve their Escobal issues and possibly replace their CEO I'm not touching Tahoe with a 10-yard pole. They are criminally mismanaged. They might go up with the tide, but I'd expect other boats to do way better. 

The 3rd largest pure silver mine having its license taken off it for something as trivial as not consulting the local indigenous population made me laugh.  If I was invested it would not be quite as funny, that's cost them c. $140m of revenue a year by my quick calculations.

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14 minutes ago, Majorpain said:

The 3rd largest pure silver mine having its license taken off it for something as trivial as not consulting the local indigenous population made me laugh.  If I was invested it would not be quite as funny, that's cost them c. $140m of revenue a year by my quick calculations.

Absolutely, something that should have been resolved in an instant, but instead turned into their most important asset becoming loss-making. That's their entire Guatemalan production there, poof, gone.

You might think that maybe their learned their lesson, but there are fresh reports of locals protesting against environmental impact, resulting in suspended operations, in Peru. In a typical Tahoe fashion, they dismiss any claims stating that they "comply with all standards blah blah blah". Good luck following that route.

If they cannot produce in Guatemala and Peru becomes an on-and-off type of thing, what else have they got to support their share price? 175k oz of gold production in Canada?

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1 hour ago, harp said:

Thanks for that DB. Picked up a couple of k worth of Royal Mail (RMG) this morning at 353.6. Looking good so far ;)

My silver chart on the Bullion Vault app looking good too. Have we turned a corner? Whats you algo saying? 

Im a 100% macro contrarian harp .I look at where we are in a credit cycle (and the likely scale of CB action to turn one).I then look out a couple of years to ten years.I then look at the sectors and companies that are hated,but that will get help from the next cycle.Some fail of course,but over the longer term i find the winners really make up for the odd dud.I paid my house off with tobacco shares when everyone said nobody would be smoking in a few years and they would go bust.They turned £8k into £90k.How many new tobacco companies set up in that time?.The reason of course is you cant raise capital to sell into a falling market so the ones there already with the capital can stretch out the returns from the sector while investing the free cash flow into new ventures.

Silver and the miners are buys,all my indicators are flashing strong buy signals.The ALGO  indicator that was on sell gave a green buy signal last week (it nearly always turns last),a divergence buy signal on 17/9 and a crossover on a key indicator on the 20th.It will need the commercial and retail positioning to remain at their extremes.One of the main reasons iv taken the job i was offered is to buy more silver and PM miners out of the wages rather than have too much of my present portfolio in there.I dont know if we go down to $8 then up,but the roadmap is clear much longer out.A huge silver (and PM) bull is coming IMO.

 

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13 minutes ago, kibuc said:

Absolutely, something that should have been resolved in an instant, but instead turned into their most important asset becoming loss-making. That's their entire Guatemalan production there, poof, gone.

You might think that maybe their learned their lesson, but there are fresh reports of locals protesting against environmental impact, resulting in suspended operations, in Peru. In a typical Tahoe fashion, they dismiss any claims stating that they "comply with all standards blah blah blah". Good luck following that route.

If they cannot produce in Guatemala and Peru becomes an on-and-off type of thing, what else have they got to support their share price? 175k oz of gold production in Canada?

Thanks kibuc very interesting.They are no2 on my rubber band list,but i havent looked at the company at all.I already own several off the list so will probably avoid.

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2 hours ago, DurhamBorn said:

I dont know if we go down to $8 then up,but the roadmap is clear much longer out.A huge silver (and PM) bull is coming IMO.

I'm seeing a lot of commentary regarding a bust to $8-11 after a suckers rally DB, so probably averaging in over time a safe bet for me at least.

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Poland is making a rare charge into gold. 
The country added about 9 metric tons to its bullion reserves in July and August [2018] as prices dropped, International Monetary Fund data show. 
That’s Poland’s biggest purchase since 1998 and among the largest additions by a European Union nation since then. 
-- Eddie van der Walt, Rupert Rowling, and Dorota Bartyzel, "Poland Makes Its Biggest Gold Purchase Since 1998"

 

 

https://www.bloomberg.com/news/articles/2018-10-01/poland-makes-biggest-gold-purchase-since-1998-as-prices-slump

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Agent ZigZag
1 hour ago, Barnsey said:

I'm seeing a lot of commentary regarding a bust to $8-11 after a suckers rally DB, so probably averaging in over time a safe bet for me at least.

If the market suggests $8 what would that likely be in £ terms  

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1 hour ago, Barnsey said:

I'm seeing a lot of commentary regarding a bust to $8-11 after a suckers rally DB, so probably averaging in over time a safe bet for me at least.

Yes id always average into the most hated assets as nobody can pick the bottom.My cross market work says up,down below $10 then up in a long bull market to $200,perhaps even $300.The reason im buying now in chunks is simply because im very confident in the road map longer term,but im not convinced we will see the below $10 (i actually see $8).I have no concerns on being down 30% on what i own given il keep buying ,but i have a huge concern about not holding and the run gets going.

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5 hours ago, DurhamBorn said:

Thanks kibuc very interesting.They are no2 on my rubber band list,but i havent looked at the company at all.I already own several off the list so will probably avoid.

Whatever you do, don't let my ramblings influence your decisions ;)

Tahoe and New Gold are two companies I've been keeping an eye on from an operational, not financial perspective. Both seem to have put all their eggs in one basket - Escobal and Rainy River, respectively - and so far it backfired spectacularly.

Rainy River purchase left NGO with massive debt and it's been a money drain ever since, including 280mln (whuuut!?) impairment in Q2 2018. It's been "ramping up" for ages now. It's projected to big huge, but the company might go bust before that materializes.

Tahoe outside of Escobal has mid-level gold production and some exploration not worth talking about. Escobal is super duper big and should be a game changer in silver bull - if they can get it back into production. It's been almost a year now and there's no end in sight, not the way they handle this situation and many others.

They are on my radar as potential ten-baggers in reflation IF they get their shit together. Until then I prefer my WDO :)

 

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leonardratso
34 minutes ago, kibuc said:

It's not fat, it's big-boned.

yeah? look at the size of that bone in your stomach. hahaha, BBB(big boned bastard).

only joking, been editted out now anyways. I did that paying my credit card bill online, accidentally paid it twice, went into credit, did'nt matter, just spent it off.

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sancho panza
3 hours ago, kibuc said:

Whatever you do, don't let my ramblings influence your decisions ;)

Tahoe and New Gold are two companies I've been keeping an eye on from an operational, not financial perspective. Both seem to have put all their eggs in one basket - Escobal and Rainy River, respectively - and so far it backfired spectacularly.

Rainy River purchase left NGO with massive debt and it's been a money drain ever since, including 280mln (whuuut!?) impairment in Q2 2018. It's been "ramping up" for ages now. It's projected to big huge, but the company might go bust before that materializes.

Tahoe outside of Escobal has mid-level gold production and some exploration not worth talking about. Escobal is super duper big and should be a game changer in silver bull - if they can get it back into production. It's been almost a year now and there's no end in sight, not the way they handle this situation and many others.

They are on my radar as potential ten-baggers in reflation IF they get their shit together. Until then I prefer my WDO :)

 

Thanks for the detail kibuc.It surprises me how some of these companies get caught out.

9 hours ago, kibuc said:

Absolutely, something that should have been resolved in an instant, but instead turned into their most important asset becoming loss-making. That's their entire Guatemalan production there, poof, gone.

You might think that maybe their learned their lesson, but there are fresh reports of locals protesting against environmental impact, resulting in suspended operations, in Peru. In a typical Tahoe fashion, they dismiss any claims stating that they "comply with all standards blah blah blah". Good luck following that route.

If they cannot produce in Guatemala and Peru becomes an on-and-off type of thing, what else have they got to support their share price? 175k oz of gold production in Canada?

 

 

 

13 hours ago, DurhamBorn said:

@sancho panza what PM miners are on your radar at the moment,?,any thoughts on Tahoe Resources?.I ran my scans last night and they are showing at number 2 on my rubber band buy list and im thinking of buying.

As I've said before,I generally pick miners with ok balance sheets and asset bases that are spread to minimise geo political risk or at least picking where I take it eg South Africa.It's spray and pray and I try and pick up what I perceive as value in the HUI/XAU/GDX

We already have some in(heaviest weighting first)

Goldcorp/Barrick/Anglogold/Gold fields/Yamana/Novagold/New Gold/Eldorado.

Today I was looking at (heaviest first)

Kinross,Couer,Sibanye,Hecla,Harmony,Goldfields,SSR,Pretium,Sandstorm,Osisko.

In the end baby Panza woke from her snooze early and I had some tech issues so I didn't get them done today.I'll likely be placing the trades next week now.Might be up by then or might be down,but I won't beat myself up about 10%/20% movements in stocks as volatile as these.

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3 hours ago, kibuc said:

Whatever you do, don't let my ramblings influence your decisions ;)

Tahoe and New Gold are two companies I've been keeping an eye on from an operational, not financial perspective. Both seem to have put all their eggs in one basket - Escobal and Rainy River, respectively - and so far it backfired spectacularly.

Rainy River purchase left NGO with massive debt and it's been a money drain ever since, including 280mln (whuuut!?) impairment in Q2 2018. It's been "ramping up" for ages now. It's projected to big huge, but the company might go bust before that materializes.

Tahoe outside of Escobal has mid-level gold production and some exploration not worth talking about. Escobal is super duper big and should be a game changer in silver bull - if they can get it back into production. It's been almost a year now and there's no end in sight, not the way they handle this situation and many others.

They are on my radar as potential ten-baggers in reflation IF they get their shit together. Until then I prefer my WDO :)

 

I usually just buy whatever my rubber band list picks up once my indicators give a buy signal,but this time iv only bought 5 from the 10 as too many were in South Africa.The last time my indicators kicked a buy signal in back in dec 15 the no1 stock on the rubber band list was First Majestic,it went up nearly 600% in the run up (i didnt get the full 600% i sold too early).This time the no1 rubber band stock is Harmony Gold.These rubber band stocks tend to keep delivering pain unless the complex turns,but if it does they snap back very quickly (not all of course).My two best technical stocks are showing as Endeavor Silver and Yamana.Sibanye has made it onto the rubber band list and the technical list.Wesdome has done very well this year.

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sancho panza
2 minutes ago, DurhamBorn said:

I usually just buy whatever my rubber band list picks up once my indicators give a buy signal,but this time iv only bought 5 from the 10 as too many were in South Africa.The last time my indicators kicked a buy signal in back in dec 15 the no1 stock on the rubber band list was First Majestic,it went up nearly 600% in the run up (i didnt get the full 600% i sold too early).This time the no1 rubber band stock is Harmony Gold.These rubber band stocks tend to keep delivering pain unless the complex turns,but if it does they snap back very quickly (not all of course).My two best technical stocks are showing as Endeavor Silver and Yamana.Sibanye has made it onto the rubber band list and the technical list.Wesdome has done very well this year.

I looked at Wesdome but it's up a lot recently.I'll wait.

All the SA stocks are trading at huge discounts to revenue,for good reasons in some cases but as you always point out,their cost base in rand.

 

Gotta go as I'm up at 0530.

Care to say what else is high on the rubbers?

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22 minutes ago, sancho panza said:

I looked at Wesdome but it's up a lot recently.I'll wait.

All the SA stocks are trading at huge discounts to revenue,for good reasons in some cases but as you always point out,their cost base in rand.

 

Gotta go as I'm up at 0530.

Care to say what else is high on the rubbers?

Harmony Gold,Tahoe Resources,Eldorado Gold,Alexco Resources,Sibanye,Endeavor Silver Corp,Avino Silver and Gold Mines,First Majestic Silver,New Gold Inc,Great Panther Silver.

Now if ever there was a portfolio for widows and orphans to avoid that would be it,but if we do get a run in PMs some of those will 10x+ and in a real silver bull there could be a 50x in there somewhere.I own several of those now and doing ok,some up a lot,some down a lot as expected as we chop around for now.I also own several from my technical list,that includes the likes of Yamana,Anglogold,Kinross etc.

A lot have just presented at the gold forum and the webcasts are all in there if you click through the names.

http://www.denvergoldforum.org/participating-companies/

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US (and Global) yields really going for it at the moment, along with Powell's hawkish comments the other day, putting much more strain on emerging markets, Euro weakening against USD.

Lots of tough talk to come from VP Pence later today signalling a significant escalation of anti China relations, you're with them or us. This is going to get seriously nasty. US clearly using this opportunity to stave off dedollarisation despite the pain some are currently going through, very interesting times. Goodness knows what happens when the Fed have to reverse policy.

https://www.bloomberg.com/news/features/2018-10-04/the-big-hack-how-china-used-a-tiny-chip-to-infiltrate-america-s-top-companies

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Gordie Lastchance
On 02/10/2018 at 21:17, DurhamBorn said:

Some of my biggest investment returns have come from companies selling into a falling market,tobacco being the key one.It all depends on if you can increase prices at the same rate you get the falls in demand.Royal Mail has superb free cash flow and it uses half of it a year to buy up parcel companies around the world.No other courier will take over the small packet business they simply dont have the scale.The way to look at it is the postman delivers small packets and its the few letters in each street that is the profit margin that other couriers dont have.Amazon also have zero chance of every doing it.

There's a bit of talk on London South East about RMG being supported by its property portfolio worth more than £2billion. That, plus profits of £500-£550million (although down from last year's £694million) and the dividend are in its favour, say some of the posters. Some are even touting that it's entering takeover territory. Shares reached their peak of £6.32 - in May! 

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4 minutes ago, Gordie Lastchance said:

There's a bit of talk on London South East about RMG being supported by its property portfolio worth more than £2billion. That, plus profits of £500-£550million (although down from last year's £694million) and the dividend are in its favour, say some of the posters. Some are even touting that it's entering takeover territory. Shares reached their peak of £6.32 - in May! 

Remember as well they are debt free.The knack of course is to run staff levels down slightly faster than the falls in letters etc.It looks like they have failed on that this year.Going forward they will need to get that on track.The problem is how to get the cash in the business and property to shareholders without the unions kicking up a stink.If i was CEO id be looking to sell off the property slowly so i could increase the dividend each year by around 4% rather than flog it off and a special dividend.The key to them are small packets.Nobody else in the market can get close to doing the work as the capital outlay would be huge.The letters are simply a bonus really and one that others dont have.They should be big gainers from a move to electric vehicles and the re-order economy that should grow in a reflation where consumers re-order on repeat lots of products.Amazon will do nothing in this market,unless they bought RM that is.Small packets arent profitable for anyone without a few letters on top.

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2 hours ago, Barnsey said:

US (and Global) yields really going for it at the moment, along with Powell's hawkish comments the other day, putting much more strain on emerging markets, Euro weakening against USD.

Lots of tough talk to come from VP Pence later today signalling a significant escalation of anti China relations, you're with them or us. This is going to get seriously nasty. US clearly using this opportunity to stave off dedollarisation despite the pain some are currently going through, very interesting times. Goodness knows what happens when the Fed have to reverse policy.

https://www.bloomberg.com/news/features/2018-10-04/the-big-hack-how-china-used-a-tiny-chip-to-infiltrate-america-s-top-companies

Yes its looking more and more like that is the plan.China has been forcing down commods through its funds for several  months now to try to protect its factories.The next stage is the west moving into a reflation through investment.The inflation genie is about to be unleashed,just a fat old debt deflation to stomach first (or maybe even during).

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6 minutes ago, DurhamBorn said:

Yes its looking more and more like that is the plan.China has been forcing down commods through its funds for several  months now to try to protect its factories.The next stage is the west moving into a reflation through investment.The inflation genie is about to be unleashed,just a fat old debt deflation to stomach first (or maybe even during).

https://usawatchdog.com/people-will-be-dumping-dollars-buying-gold-peter-schiff/

Quote

Ten years later, Schiff is warning of another financial calamity bigger than the last one. Schiff says, “The problem is now we are on the precipice of a much bigger crisis than before. The next time, if they try to reflate those bubbles, which they will, it will be a spectacular failure because the markets are now prepared for the opposite. Everybody, right now, assumes the Fed is going to be able to keep raising rates. They assume they are going to shrink its balance sheet and that we have this booming economy that will never bust. When the Fed has to reverse course abruptly, acknowledge the underlying weakness that everybody has been oblivious to and they start cutting rates and launching another round of quantitative easing (money printing), I think the dollar is going to fall through the floor. I think the inflationary fires that are already burning pretty hot are going to ignite. It’s not going to be like 2008 where the dollar went up and consumer prices inched down a little bit. I think the dollar is going to tank and consumer prices are going to soar, and it’s going to be stagflation. When the markets get a whiff of that, they are not going to like the way it smells. It is going to create a dollar crisis. I think the Fed has put itself between a rock and a hard place. There is no way out this time. . . . This time, you really have to be positioned because this time is going to be the end of it. This is not going to be a hat trick or third time is a charm when it comes to reflating these bubbles.”

 

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