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Posts from the ‘Golden Minerals (AUM)’ Category

Gold Stock Reversal

I am not a technician or a chartist and as a general rule I don’t pay much attention to that sort of thing.  However I have learned to respect intraday reversals, and I have especially learned to respect them for gold stocks.

For whatever reason, I have seen more gold stock rallies fail after an intra-day reversal to the downside, and I likewise have seen more gold stock pummellings end after one to the upside.

Yesterday we had a very nice reversal in the price of many gold stocks.  Morevoer, the reversal was led by the leader of the gold stocks, Newmont Mining. Newmont traded almost as low as $44 before breaking out to the upside and closing at $46.50.

Newmont was not the only gold stock to reverse.  Of particular note for me was that Atna Resources had a hue reversal on the day, getting as low as $0.95 cents before closing at $1.10.  Another stock that has shown the resilience of a leader, Argonaut Gold reversed from a low of $6.80 to close at $7.52.

It still remains to be seen whether this reversal holds.  If it cannot hold through today and tomorrow its nothing more than a fake out.  But given  the level of selling that has overwhelmed the sector, it feels right to me for a change.  Investors who have remained heavily into gold stocks have been absolutely pummelled, and yesterday, with the price of gold breaking down below $1600 per oz and with gold stocks opening down big in most cases, it feels a like a capitulation moment to me.

I have owned Atna Resources through the slaughter and ithas held up relatively well.  I added to that position yesterday after it became clear it was reversing from its lows.  I also added a position in Newmont.  This could be considered to be a trade.  Newmont at $44 does not seem like a terribly risky endeavour to me.  Finally I added to my position in Golden Minerals and I added a position in Lydian International.  Of interest, Lydian did not reverse higher as strongly as many of the other juniors.  I suspect this is just a short term anomoly.  At any rate I will be monitoring all of these positions closely and if the reversal fails I will likely be bailing out of Newmont, Lydian and probably Golden Minerals (though at $5.30 its hard to see this stock getting very much cheaper).

Week 38: Waiting on a move

Portfolio Performance

Portfolio Composition

Portfolio Trades

So first of all . . . .

I don’t know what happened with the AUM trade

I think there is a gliche with the RBC Practice Account because somehow I sold Golden Minerals (AUM) on Wednesday and ended up with a long AUM in Canadian dollars and a short AUM for the same amount of shares in US dollars on Thursday.  I am hoping the trade resolves itself (in my actual accounts this sort of matched trade in the wrong currency would automatically resolve) but if it doesn’t I will attempt to clean it up myself.  I wanted to point it out because my current portfolio composition looks a little odd as a result.

Buy more banks . . . .

I’m still buying financials and I am actively looking for more to buy.  I got a few more ideas from a new website that I have signed up to called stocktwits (its like twitter for stocks).  The names are: ORRF, FFNW, SNBC, and GBNK.  I haven’t done enough research on any of these names to make an assessment of them.

This week I added to both Shore Bancshares and to Rurban Financial.  I looked at both in more detail this weekend and I am happy with what I see.  I’ll try to put together a post on each shortly.  I’ve already seen a double in Community Bankers Trust, and I’m up 40% since my original purchase of Bank of Commerce Holdings but I have no plans to sell either.

This week I also noticed that one of the banks I held but sold, Xenith Bankshares, popped.  I may buy that one on weakness.  I’m also watching the newswire for anything on Atlantic Coast Financial.  ACFC has a brutal loan book and could very well kick the can at some point, but the stock also has a book value of over $19 (yes that is right, it is a $2 stock with a $19 book value) so it is imaginable that if the banks continue to be on fire the stock could move up rather substantially.

. . . .Less oil

I sold out of Arcan Resources this week.

Why did I sell? Three reasons.

  1. The company ran into some operational problems (again) that cut back production for a time
  2. Spring break up is upon us and while I’m not certain of the extent that Arcan is impacted I do know that the junior oil investment community tends to go on leave from April until June.
  3. I want to put my money in the best opportunities and right now the best opportunity is in the regional and community banks and in the mortgage servicers.

Maybe I am selling at the bottom.  I’m sure there are a few that would scoff at me selling after a 20% drop.  Stupid retail.  So be it.  The banks are going up right now and Arcan is not.  So I would rather own the banks.

To give you a taste of just how impressive the bank performance has been, consider these charts:

A couple new positions

I also have initiated a couple of new positions that I consider myself “restricted” in talking about, at least for the time being.  The first is Cal-Maine Foods, which is a large egg producer.  If you want to get an idea of my reasons behind the purchase, take a look at my recent tweets ( I also signed up for Twitter this week).

A second position that I started was Golden Standard Ventures.  Golden Standard is drilling in Nevada and they may have hit gold in the way of a Carline style deposit.  A real spec here, but one that from what I hear has a reasonable chance of working.

Week 36: Short-termism

Portfolio Performance

Portfolio Composition

Trades:

Short-termism

One of the unfortunate realities of being invested in the stock market is that while you have to keep your eye on the longer term problems, you can’t let them cloud your ability to look for short term opportunities.  So while I accept the view that the world could quite possibly go to hell in the medium term (see my post on Greece earlier day for the latest installment), in the short term we’re in another liquidity induced high.  Party on or something of that vein.

Buying the correction

As I wrote about on Tuesday, this week I bought the correction, buying Aurizon, Pan Orient and Golden Minerals (I screwed up the Golden Minerals trade in the practice account I post here and didn’t realize it until I checked this weekend so I will have to buy the stock next week to reconcile the practice account with my actual account.   As I mentioned earlier, I bought a fairly substantial portion in my trading account.  In a couple of my other accounts that I do not track with the RBC Practice account I also bought more Newcastle Investments and Atna Resources.  I’ve been doing work on both of these companies and I think these represent two of the best opportunities for appreciation in the next few months.

Never add to a losing position… except this time

I also bought more Equal Energy when it got down into the $3.80’s.  I am going against my rules with Equal.  Never add to a losing position.  I’m losing on Equal.  But I’m simply of the mind that even with low natural gas prices this is getting ridiculous.  The activist shareholder movement posted a new slide to their presentation that showed just how undervalued Equal is compared to some peers, particularly NAL.  NAL has ok assets but I would not say they are that much better than Equal’s.  Yet NAL trades at a valuation that is more than double of what Equal is at.  Something has to give here.

Back into Leader Energy Services

The other stock that I bought recently (was actually last week that I bought it, not this week, but I haven’t mentioned it yet) was Leader Energy Services.  Leader did a bought deal financing two weeks ago.  They raised about $6M with 8.5M share dilution.  For those that have followed this blog for a while, I owned Leader back in the summer but sold the stock when Europe broke out because I feared (rightfully) that a company in a cyclical business with a lot of debt would have a tough time in that environment.  I wrote up my thoughts on why I originally bought Leader in this post.  I wrote up my thoughts on why I sold Leader in this one.  The basic thesis of why to own the stock is still valid.  With the financing, many of the debt concerns are not.  Given that, and given that the immediate problems in Europe having receded, I decided it was probably the right time to take back a starter position in the stock.

Buying when you don’t want to

The hardest posts for me to write are the one’s where I have to write that I bought a bunch of stocks on a day where the market was down a lot.  Its tough because I am worried I will be proven wrong.  Its extra tough because I am notoriously early and so I have been wrong many times before.

The market really tanked today and nothing tanked harder than the junior gold and oil stocks.  I had lightened up significantly on the gold stocks last week; I exited Canaco Resource, OceanaGold and a significant portion of Aurizon Mine. Unfortunately I used some of the proceeds to buy Pan Orient Energy, which took it on the chin today.

Nevertheless there is some truth to the old adage that the best time to buy stocks is often when you don’t want to.  Today I didn’t want to buy anything.  I even had half a mind to sell it all and stand away.

But having thought it through, I am having trouble making sense of the idea that this is the start of something big.  I have become a convert to the idea that the LTRO has taken out much of the systemic risk potential. The prices of periphery bonds suggest as much; even after today’s shellacking Italian and Spanish bonds sit near their lows.  The TED spread and Swap spread hardly moved at all and currently sits at 40 and 27 respectively, well of their highs of 60 and 55.  The bank stocks, while hit hard, did not lead the way down in the way they did in August.

It just doesn’t feel to me like it did in August, or in November for that matter, when the fear was palpable.  Yes, we are worried about Greece and what is going to happen.  But the evidence does not suggest that the big players are that worried.  If they were we would see more signals of the stress in the bond market.

Which makes sense.  By this point everyone knows about Greece.  Everyone who had money at risk with Greece should have been able to figure out how to take it off the table.  That yields aren’t rising in the periphery suggests that the real problem, that a Greece default would cause a domino effect, is not in the cards.

What I bought

I’ve had good luck buying Aurizon under $5 in the past and so I did so again today, restoring my full position in the stock.  I also bought more Golden Minerals.  Golden Minerals is a stock I had been tempted to sell when it got to $10, but I got a little greedy and decided against it, only to watch the stock fall back to $6.80 today, which is not too far away from my original purchase price.  The stock is reasonable at these levels; the company has $2 cash on hand per share and a 6Moz gold equivalent resource.

Interestingly, Rick Rule was on BNN yesterday and he had some positive comments on Golden Minerals in this clip (I’m not really sure how to embed video from BNN).

Since last Wednesday its been a swift fall for many gold stocks.  My bet here is that the latecomers have been fleshed out and that with stocks like Aurizon and Golden Minerals approaching their 52 week lows once again, we are close if not at the bottom.

I also added to Pan Orient.  This will be the last time that I add until I see the stock begin to rise again.  For the time being I will sit tight with what I own.