03/04/2011
December 3, 2017
02/22/2011
December 3, 2017

03/01/2011

Still in Mongolia… Heading for home tomorrow, but stopping off in New Orleans first… Laissez Le Bon Temps Rouler…


Dear Sir,

I am following your blog and I found your article on Mongolia extremely interesting: I opened a brokerage account at BDSec. There has been recently large changes in the share price of BDSec. What is your opinion on that? Are you considering investing in Mongolia through other companies than BDSec?

Thank you for your articles, best regards,

The whole Mongolian stock exchange is screaming higher and most companies are still undervalued. BDSec is taking advantage of that trend. It’s more than doubled since I wrote about it a few months back. I think there is much more to come and I haven’t sold a share. I own shares in a few other Mongolian listed companies, but none of them are liquid enough to really mention. Hope that helps…


Hi Kuppy. Many thanks for your insight and interesting ideas. I remember you writing a story about cotton (and China) so I thought I’d pass on this interesting story about rising cotton prices and how it affects the clothing industry. Bad news for female clothing shopaholics by the way 😉  http://www.telegraph.co.uk/news/worldnews/asia/china/8349425/The-end-of-Chinas-cheap-denim-dream.html

The price of everything is going up. Next step is when retailers start passing the costs on to consumers–most people will have to consume quite a bit less.  Before he’s done with it, Bernanke will destroy everyone’s standard of living. The sad thing is that he’s only just getting started. Even worse, he thinks he’s losing the war against deflation….


MERC/FBK — I would like to buy more, question is would you if you had small positions such as i do buy more, especially merc which is up 70% since i bought, or wait for pullback? thanks for your crystal ball.

I can’t tell you what to do. It’s VERY hard to make a decision like this after something has just ran 70%. Whatever you choose, will probably be the wrong decision. Remember, these are speculations, that means I buy cheaply and sell as it goes up. There is a definitive end point to this investment in terms of valuation, and we are closer to it now, than we were when I first bought shares. This isn’t like Energold which will grow for years into the future and there is no ‘correct’ price for it. MERC has a ‘correct’ price. I am just not smart enough yet to know where it is, but at 8 where I bought mine, it seemed too cheap. Sorry I can’t help more….


I have approached the recent AAG prices as a chance to average my cost down. Doing so however, has made my position a little fat. Over all I am comfortable with the risk but hesitate to be too aggressive with the elections coming in April. Do you consider this a time to wait and see how elections turn out or a time to average down if possible?
In terms of the impact on Invicta, what insight can you share on how the local Peruvian political climate is developing going into April. Do you see community relations as healthy or as a concern?
My apologies for the multi-questions post.

I can’t average down. Stock is still up like 3x from my cost basis. Remember that this is mining, bad things tend to happen, especially to development stage companies. It’s best to be thinner and miss some upside rather than being fatter.

I have no insight into the elections. Community relations is the real concern here. Yesterday, the company announced that one agreement is signed and one other is close to being signed. Naturally, it’s taking longer than expected–but this is mining…. I think everything will turn out just fine, but it’s frustrating to see it all drag out. I have a lot of faith in this management team doing the right thing. (For disclosure purposes, I’ve peeled off a few shares over the past few months as it hit my fund’s position size limits for specutlative positions).


You noted you see a crushing amount of silver supply coming on line in the next few years. Where will that supply come from? Is it known reserves in existing mines?

Supply will come from about a dozen elephant mines that are in construction or feasibility currently. It will also come from mine expansions and it will come from garimpeiro mines that no one can keep track of. Silver forms in veins, it’s very easy for small scale miners to go underground and rapidly increase production in many of the old workings that were previously mines.

This information is available in multiple silver industry websites.