Latest Observations

I had hoped to spend my first day back from Ireland on other matters, but many clients and friends (some are both- believe it or not, LOL) have called, text and emailed about one of the two stocks I own.

Despite the fact I’m out of the stock picking racket for a few years now, I put this on myself by even mentioning my personal ownership and suggesting consideration for speculators. So, the least I can do is respond, but it will be just through this communication to one and all (so don’t call, text or email for anything more) and most importantly, this is not investment advice. I’m not in that business either anymore (but those I’m associated with in the financial planning business we do for both my companies are).

One final note before I give you my thoughts on the markets and both stocks I own; for the “love of God”, please pay no attention to what someone says about me, what I supposedly said or did now or in the past on anything, by a poster on the Internet who won’t self-identify, but use the safety of their keyboard to make claims (almost always subjective rather than objective).

I spent my last sleepless night in Ireland, reading a thread of one of the stocks I own and see some silly and erroneous comments about me. I know who one narcissistic poster is, and at one time considered him a close friend. But like another poster said there about him of late, one can only feel truly sad that a man who claims such a background, spends what looks like day and night, seven days a week, and engrossed in what’s little more than a room full of mostly gossipers with apparently little else in the world to do (and are obviously empowered by the anonymity of these chat rooms, where they get to live out what they can’t do in the real world).

While I will go into much greater detail after Labor Day, for now, please accept the following short update:

U.S. Stock Market – While I own just two stocks, I don’t have most of my worth in them as falsely-claimed by my troll. I am indeed in the camp that overall, stocks, in general, are quite overvalued, and depending on one’s individual situation, ownership of equities now in any large exposure seems a great risk IMHO. Doesn’t mean not to own any, but the day of the market rising all boats is behind us IMHO.

U.S. Bonds – Here too, the risk is much higher than reward, but when the bubble bursts in the stock market, your bond investments will need a Band-Aid as opposed to equity investments, where you will need a tourniquet.

Oil – The $35-$55 trading range shows no sign of changing anytime soon (not counting nukes going off but if they do, your oil positions won’t matter much if you’re still around).

U.S. Dollar – 

Gold – First, it was supposed to be way below $1,000 by this time. Now, those same bears said it won’t get above $1,300 and to run for the exits. They may indeed be right…. What’s that you say, Peter? It may need to build a base sufficient enough to get through and stay above $1,300, but like I said all this year, I sooner own gold then equities and have only been more confident of that as the year progresses.

Copper and Zinc – While not surprised by zinc’s strong rally (it’s one of the main reasons I had bought NSU in the first place – more in a moment), but I didn’t envision copper above $3. I’ll take it but I would like to tell you there are lots of reasons for it – but I can’t. I suspect if we can stay at these levels a few more weeks, we’ll learn of some major shorts being murdered (financially and maybe even literally). I’ve much more personal confidence in zinc’s ability to hold most, if not all its gains than I do copper. But I also thought the Atlantic Falcons were a lock late into the third quarter of the Super Bowl and look what happened there. I don’t think copper is going to collapse but some consolidation for a few weeks would serve us better in the long run than a further parabolic rise now.

Okay, now let me address my two personal stock holdings and on the life of my daughter and all else that’s precious to me in life, I will never, ever again speak about my personal holdings once I no longer hold these two.

Teranga Gold – The market is waiting on the company’s assurance it would have its “go-ahead” on its newest mine, Banfora, by months-end. There seems to be some speculation that new equity will be needed to finance the expected go-ahead. That may or may not be the case but management has constantly stated in the last couple of months that they believe they have most of the financing needs via debt lined up. With gold near $1,300 and an expected worthy go-ahead on Banfora near, the stock is at least $2 below IMHO where it should be. But I’m 40lbs heavier than I should be and that hasn’t changed in years -lol

Nevsun Resources – If I needed another two reasons (I truly didn’t) why I left the metals and mining promotion racket almost four years ago, TGZ and NSU have shown me it was the right move – ONLY I SHOULD HAVE KEPT MY BIG MOUTH SHUT once I did leave.

I could write several pages on this company and what has occurred but I’m not going to. I will say just this:In just about a years’ time, this company went from one of the more well-respected companies in their business to one where what may be legitimate concerns about some very poor management decisions (if not something much worse) have led to big paper losses for loyal shareholders like me who at the very least, had management lead them that the dividend was secured through at least 2017 and just a couple months ago their Eritrea projects were being touted to be on the verge of being greatly expanded, only to now seemingly being greatly reduced at what expense to the relationship with Eritrea going forward and the dividend was greatly reduced (which in itself, wasn’t bad for what the monies will be used for but was made bad by assuring it wasn’t about to happen). Pulling the rug from under shareholder’s feet, twice in one year, has caused the company’s credibility to be badly damaged.

If this had all occurred and the very same management team was still in place, I would take my lumps and have moved on (and this talk of class action lawsuits is a joke – only lawyers will end up with any real money if there is any). Fortunately for us, and very fortunate for those who are first becoming shareholders down at these levels, an apparent extremely capable new CEO has taken control, and brought in his own CFO most recently (and the previous CFO sudden departure only serves those who think previous management did more than a little boo boo).

 

There’s been lots of speculation and most of it was negative – until today’s bounce in the share price. I do think it’s just a bounce and mostly due to the fact of copper breaking through $3. But if the share price has similar gains for the next few days and on big volume, then I”ll be only too glad to say it’s something more positive and imminent.

One thing is highly likely in my book given all that has occurred up until what we know and can speculate on what we think we know as of today, this has greatly sped up the takeover I always thought NSU was from day one. Unfortunately, not at the levels I once hoped for but now like many, will settle for.
I was also asked about the CEO buying shares. It’s always nice to see, but until there’s more by him and/or other key management, don’t get too excited. Oh yeah, what would a NSU comment by me be without me saying this – one more of the “old gang” should be gone, ASAP, Trebilcock. He is without a doubt, the worst person I ever encountered in the position he currently holds and should have been booted out when Davis left (or was pushed out).

 

Now please allow me to return to my “working” vacation and will have much more to say not too long after Labor Day.

 

God Bless!

 

Peter