Hello Tomato
I just saw the market cap of DEBEERS the other day, I think it was on the website of that guru I was trying to get some DONNER information from. I can't remember his name but if you check the posts a few weeks back on the DONNER thread you will probably find his address. There are not very many posts so it should not be difficult.
This may be totally off base but I think I saw a figure like 3 billion shares @ $32/share. Russian and Australian production is going to trail off over the next three years, and you know who controls the pipeline. It was trading off its highs and I believe at about 9 x earnings.
Whats really astounding is that again if I am not mistaken, one family controls about 22% of the shares and a few others account for about the same again. I wonder if they have any eligible daughters.
I guess risk/reward depends if your in the speculative season, if Bre-x is a bust, if interest rates rise after the Canadian election, etc, etc, etc.
I take the view: long term 50% of my $$, medium term 30% and speculative short term 20%. Three collective short term losses can not hurt me more than the gain on one of my long terms. All are bought at their lows, and generally when their markets are depressed. I simply wait for their respective markets to recover. I started this approach when Magna came out of receivership during the last big downturn buying it at $3 something and selling it last year at $70 something. IBM was $42+/- about three or four years ago and I did the same thing. Same with Microsoft, Dell, Barrick, Netscape, etc. The long term portfolio is alot easier on the nerves. I am a little more cautious on long term techs as their markets can change rapidly.
Diamonds (3+ year horizon): Debeers, Diamet, Southernera
Mining (3+ year horizon): Inco, Cameco, Barrick, Eldorado
General (3+ year horizon): Dylex, Apple, Motorola, Air Can, Lowen
Diamonds (1+ year horizon): Canabrava
Mining (1+ year horizon): Yamanna, Donner, Ashanti, Bro-x?
General (1+ year horizon): Pixar, Nintendo, Methanex
Diamonds (5 months): Aber, Southernera, Kalahari, Cypango, New Indigo
Mining (5 months): Treminco, Franc-ore, Goldtex, Donner
General: (5 months): None
What I find so intrigueing about Southernera is that it can be traded on its seasonal cycles, accumulated for year over year gains, and has an increadible long term potential. If it can establish some good Canadian pipes, it will probably be one of my major retirement portfolio stocks.
I know this will probably p... George off no end, but Aber is no where near production and has no other warm climate prospects. Its going to be stuck in a seasonal trading cycle for the next four to six years. It will go up in anticipation of new pipes, with new pipe news, and of course on a possible takeover. But barring the latter, your $$ will only work for you 6 months of the year. Diamet was similarly encumbered, but its going into production in 1998 and I expect longer term investors and funds to slowly start accumulating it this winter against earnings in 1999.
Trust this is what you were wondering about
Regards |
