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Strategies & Market Trends : Value Investing
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To: Paul Senior who wrote (48104)5/24/2012 1:33:13 AM
From: Paul Senior   of 78903
 
OT: I'll follow Paulson&Co and Seth Klarman and Tocqueville Asset Management, and maybe slip in underneath them to start a position in NovaGold (NG). The company's apparent claim to fame is that it primarily holds interest in the Donlin Gold deposits located in southwestern Alaska.

The company has no revenue. It says though it has enough cash to get it through the permitting process to mine its apparently very good gold deposit (Donlin). How this company could have a margin-of-safety though (for Baupost per Klarman's espoused views) - is beyond my comprehension.

IF the company ever actually begins digging and processing -- it may take years and maybe require stock dilution to fund. Jeez.

Otoh, maybe NG is a trading sardine. It seems to rise and fall hand-in-hand with other gold miners (miners that actually produce gold). So maybe not having actual production is not a hindrance (for a trading sardine). Also, as more and more countries seem to put limits or taxes on exports of their commodities, or otherwise increase taxes on the foreign miners in their midst, having an apparently large gold reserve in Alaska might make NG an acquisition target for one of the larger international mining companies.

Anyway at NG's current relatively low stock price, I'm willing to follow Paulson, et. al. and hold a few shares in my gold miner basket.

finance.yahoo.com
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