December 3, 2017
December 3, 2017


Hello Kuppy,

thanks so much for your call on IPT, I bought it with average price around 1.4 and now sit on a nice gain. But the speed it goes up in last week or so really concerns me, I don’t know if there is some background or it’s just nature for such small cap stock. Will you categorize it as an investment, or a speculation? do you also think the price has increased too fast and is ready for a large pullback?
thank you so much,

I’m glad you made money….

I’m not sure if I actually had a ‘call’ on IPT. I just said that Fred Davidson is one of the smartest businessmen I have ever met and that I’d be an investor in any venture of his. He went years without raising capital and used retained earnings to grow silver production at a double digit annual rate. I don’t know of anyone else who’s done that. Most guys continue to dilute shareholders and barely get any growth for it. When someone that restrained decides to raise capital, I jumped at the chance. You just KNOW that he will do something smart with it.

As for what the price does next, I don’t really know or care. I didn’t buy this to make a quick move. It’s impossible to guess about the short term on these sorts of things. I think the company will increase production in excess of 20% a year for years into the future. Unless something changes at the business or the valuation gets crazy, I am just going to own it.

Despite Energold’s rise, & due to the changing investing environment (higher gold prices, lower dollar, strong execution at EGD & Impact) – is it fair to say that the equity is cheaper now than when I initiated the position at $3?

The thing that makes some companies such great investments over time is the fact that even when the shares go up, the business has probably improved even more. The market still doesn’t comprehend the value of this business and the fact that rapid growth means that run-rate earnings are understated. There is a reason that this is by far my largest position at cost. I’m sort of thinking that this is a business that can earn in excess of a dollar a share within a year if they stopped growing. Is it crazy to put a mid-teens multiple on a company like that?

Kuppy, you say: (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). when you talk about your AAG. Why do that? Won’t it make your other shares go down?

I believe in fair disclosure. I wouldn’t want anyone to second guess my intentions. I created this site as I find the feedback very insightful. I have also gotten a few very interesting stock ideas from readers. This isn’t a pick of the week sort of site. There are plenty of stock promoters with sites like that. Besides, I wouldn’t be able to compete with them. My graphics budget is too low…. VBG

In all seriousness, I have owned AAG for a few years now, I just am not worried about the short term swings. If someone wants to sell because I sold a few, that’s fine with me. The stock will eventually trade on the fundamentals. As it goes up, I need to take off a few shares so it stays at roughly a set percentage of the portfolio. You have to have discipline as an investor. You cannot let a speculative position become too big.