Some weekend notes:
Have reduced my huge exposure to the juniors by about 10-15%, mostly some pruning off the two and half to three baggers and reallocating some into two names: MNP(*) and WTC (**). Will gradually feed my winners into further strength and as they go long term cap gain. I'm expecting another good POG pop in the next two months and a buyout somewhere to boot, so today is not time to bail big on the sector.
My energy stocks purchased in Dec/Jan have left the station. Targets are 1.00 McDep ratio used by Kurt Wulff.
mcdep.com
Besides these listed in this post, picked up KCH at 3.70 and THY at 2.50. DXI has lagged and still looks buyable at 2.00.
Message 16918706
I've started accumulating a biotech portfolio that I will add to in time if that sector stays depressed (***). The best stock I ever owned was AMGN, purchased in the late 80's. There are a number of "pipeline" companies (AVAN, CEGE, CRXA, ILIC, ISIS, ONXX, RZYM, INSM, IMGN, MDCO: LGND would be good a little cheaper)with late stage products, excellent science, cash and extremely low valuations now. Starting to look like the wreckage of the junior sector in 2000 except they are more high profile and liquid. Some good naked put and covered call writing premiums to exploit as an accumulation strategy and as the sector forms a base (some "oh, I still own THAT" people still need to get out at the bottom IMO).
(*) I called them and found out that the Jipangu purchase was from last year, and was a delayed report. The PP was sold out, no room for me. The individual I spoke to (their corporate counsel) didn't seem to have a great grasp of Mt. Kare. He did say that PDG didn't even spend much on Porgera exploration, let alone seem to be interested in Mt. Kare. The best thing that could happen is for PDG to be bought out and Porgera shuffled off to NEM or even ABX who would develop a proper district approach. Still at a two million EV this is too cheap to pass on.
(**)May have the best silver deposit (Penasquito) in the western hemisphere. Moonshot potential.
(***) There is a new "anti-pipeline" attitude that prevails in the market now and it goes like this: if it doesn't have cash flow or a "PE" today then it should be shunned. This is a complete 180 degree turn from the bubble notion of paying unlimited prices for the future cash flow of product developers. This mentality is well illustrated by the new found desire of pile on and day late commentators like Motley Fool to short potentially explosive situations like SIRI and XMSR (which I just bought ****): fool.com
Both notions are nonsense: the key is paying the right valuation for future dramatic cash flows that might emerge from pipeline development.
(****) I'm completely sold on the product (2001 electronic product of the year) , as wife uses with enthusiasm on her commute. IMO will achieve dramatic market pentration. My EV evaluation from Yahoo:
messages.yahoo.com |
