More GOD= BS////Grandich- a big opportunity has presented itself - time to act
Written by Peter Grandich - Agora Small Cap Epicenter | Thursday, 09 July 2009 05:52
For several weeks I urged taking profits in many positions in the model portfolio in hopes some big opportunity would come knocking again. During that time some people questioned why sell while the going was so good? I consistently stated I wanted investors to build up a very comfortable position so they could easily take advantage of when the rap on the door returns.
Proving how crazy this prognosticating business can be, now that an anticipated opportunity presents itself to buy below “retail”, the very people who struggled with the thought of selling just a few weeks ago now appear too afraid to buy. I’ve purposely taken serious profits on several fronts these past couple of months so the model portfolio could be in a position of strength to act aggressively if the big opportunity presented itself. I believe it has!
While the current open positions are limited versus several months ago when I took the plunge on the long side aggressively, I’m confident my choice of quality versus quantity is the right strategy. I continue to limit exposure to just metals-related equities and the short side of Treasury Notes, Bonds and the U.S. Dollar. Oil has come back down as suspected but is not yet close to becoming a buy again. So as of this writing, the following stocks are buys:
Northern Dynasty Minerals (NAK-ALNET $5.92 ) Hit long-term support earlier today and bounced off it. I bought shares at $5.75. The sell-off in mining shares has caused some fairly serious short to intermediate technical damage that won’t be fully repaired in a day, week or even a month. But many stocks like NAK have come back to some very strong areas of support and appear to have far more reward than risk at these levels.
I think it’s just reaching to try and tie any of the weakness to Gov. Palin’s exit, stage left. The difficulty is the stock is no longer driven by drill results (how much more metal would one need anyway?) and has not moved onto the next stage of development of permitting and feasibility.
Please stop sending me emails on why and/or when is someone going to buy NDM out. There’s zero reason for me to think anything else other than what I always have – it’s a question of when, not if NDM is taken out. At the end of the day IMHO it’s in Anglo’s best interest to take out NDM and not have to deal with another major as a partner. There’s just no reason for them to rush, especially when the share price isn’t anywhere close to a fair valuation any buyer is going to have to offer since NDM is so tightly held. Hence, any interested party has time on their side and can deal with paying retail if and when someone finally pulls the trigger. That’s okay with me as once again the share price is back at no-brainer levels.
PST-NYSE $54.39 and TBT-NYSE $48.35 are both buys now at today’s price. The whole argument of higher interest rates down the road that one could swallow a week ago isn’t no longer valid simply because the market price of the securities changed this past week is silly. That line of thinking is what’s so common among the public and sadly the so-called professional community. Was I jumping and doing cartwheels when prices were higher? I think not. So why should I change gears if the same picture remains in front of my eyes but only the price of the stock changed? That’s like making different decisions on where a horse or human is during the course of a race. The only position that matters is where they are at the finish line. Most people lose in the markets because their yardstick is not some vast long term fundamental and/or technical argument but merely the price of some stock or market and the regular ups and downs tells them if it’s a good thing or a bad thing day to day.
While gold and silver can remained pressured until September (when its seasonally weak period ends), those who don’t own any precious metals should use this period of time to establish exposure to an asset class that has managed to work for a couple of thousands years and should continue to do so for whatever time is left in this world.
Vehicles like GLD, SLV and CEF are great ways to gain that initial exposure. Gold’s 200 Day M.A. is near $890 and I suspect the gold cartel is gunning to take it out. One can only breathe easy again when we get above $940 on gold and stay there and/or we’re in September and jewelry fabricators are back in full swing.
Like NDM, I think the next three stocks are all takeover targets and are now at compelling speculative buy levels.
Nevsun Resources (NSU-Altnet $1.14 ) I had a discussion with a very credible Nevsun/Eritria expert who strongly suggested Nevsun’s expected financing is not being held up for anything major but some social programs that needed to be refitted before the financing can take place. This incredible project of less than two-year payback has to IMHO put NSU on the takeover block if and when the financing is completed. The fact that NSU’s current management isn’t exactly the “best of the best” is also what has likely led to some concern and a feeling of skepticism that they can do what’s needed to get NSU to the next level. I agree that’s a legitimate concern but this project is so awesome even this far less than perfect management team can get it over the line. The fact that they’re who they are actually makes the takeover possibilities stronger than if a better team was at the helm.
Continental Minerals (KMK-TSX-V $.98) – One of the better copper-gold deposits in the world today. With China’s thirst for copper a need one can expect for years to come, large-scale projects like this in their very own back yard are strong takeover targets. Stay tuned.
Taseko Mines (TGB-Altnet $1.44 ) Fundamentals have actually improved IMHO since I first put the stock in the portfolio (and before they became a client of Grandich Publications). The company has been paying down debt, arranging a better stream of price for their copper and is aggressively moving hard on forwarding its Prosperity Deposit (an asset many including me believe gets no value in the current share price).
I’m eyeing some possible new bearish bond plays and some additional mining and exploration shares so stay tuned.
On Major Moves, Grandich has been very right and not only saved many investors fortunes, but expanded them dramatically. On November 3, 2007 at the MoneyTalks Survival Conference, Peter Grandich of the Grandich Letter warned that "an unprecedented economic tsunami will hit American beginning in 2008". Peter advised publicly to short the US market two days from the top in October, 2007 and stayed short until the last week of October, 2008. He began to buy stocks in March 7th, 2009. He also bought oil and oil related investments near the lows after the dive from $147.
....go to visit Peter's Website.
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