December 3, 2017
December 3, 2017


hi Kuppy, your recent Miami article initiated a curiousity to ask about condo rental prices. I live in Toronto and missed the latest real estate rise that doesn’t seem to quit and seems extreme…(to me). What would it cost to rent a decent condo for one person in an area that is safe and quiet, has some access to whatever public transit there is. I am in my 50s, not looking for senior citizen land, nor am i looking to be particularly near any bars or clubs…
thanks in advance and hoping you could advise, just generally speaking…

Generally, rents on the beach at a decently nice place are about $1,500 for a 1br and $2,500-$4,000 for a 2br. If you cross the bridge into Miami itself, these prices drop in half. Remember that at current 3-5 yields, your landlord loses globs of money on you because you still have to deduct, taxes, insurance, condo fees, financing cost, etc. I’m guessing that my landlord loses between 5 and 10% a year on my rent assuming that he financed it for 30 years at 5%. There’s a reason that I’m renting still….

if you price miami property in 2012 dollars then i take your point. If you price it in pre 1933 dollars or 1971-1934 dollars then its likely to keep falling abit longer dont you think?
good health

Condos might go up in current dollars, but I doubt they’ll gain against gold or any other hard asset.

Hi Kuppy: I read with interest your article on Invicta. As of today I am sitting with substantial losses on the AAG position. Did AAG get any financing and what is the future of AAG in your opinion. Thank you.

The best case scenario is that AAG gets sold for something between 30 and 60 cents. I’m not holding my breath on this happening. There’s a reason that I say that I will not ever again do jr mining. Guess I got this one wrong.

Hi Kuppy: interesting videos on OT. Do you recommend IVN as a long term investment? Thank you

I don’t know enough about it to have a firm opinion. Remember, no mining….

Kuppy–I know you don’t invest in mining cos., but after your experience in Africa do you have any sense that foreign mining interests will be safe from expropriation/massive tax increases over the next few years, especially if precious metals prices escalate upwards rapidly? If you were going to invest in that area would you confine yourself to the West?

Thanks, really enjoy your reports and responses to all questions.

I simply wouldn’t invest in mining. I think it’s a very troubled sector and I expect most governments to be very agressive on the tax side–though I do not expect much outright expropriation. I don’t think there is much of a difference between western governments and African ones. You really need to look on a case by case basis. Some places are much worse than others.

you’ve got a big position in EGD….I presume you’ve made your feelings known about the frequent bot deals…?
…obviously they blow off your comments??

I think they’re listening now….

You buy large positions and become the largest shareholder. What are your thoughts on purchasing deep in-the-money (which are mostly intrinsic with a very little portion of time value cost) LEAPS expiring 2 years from now instead of buying the underlying. You put less money upfront and can put the rest of the funds into a Mongolian Tugrik account yielding 13.5-18% per year. What is the problem with this strategy? Had your share slid in value, the high intrinsic value of the option would have ensured a high delta too. Your thoughts on this please. Thanks.

It could work….I prefer to just keep things simple and own the shares outright. Playing with leverage always seems to burn people….

Hi Kuppy,

First, thanks for answering my previous question about Energold and their drilling rig count. I do want to clarify that my purpose for the question was to get a more general understanding about if they are accomplishing the level of growth vs. your expectations and I think my lack of clarity in the question implied that I was looking to “update my model” with a rig count to extrapolate into earnings. But again, that was my mistake and I thank you for your time in responding.

Again I have a question about Energold and specifically their recent bought deal financing. I know you’ve talked in the past and expressed your distaste about these types of arrangements, so I must ask you for your opinion on the most recent one. In my mind, it did appear to be a reasonable way for them to raise money and 5.20 didn’t seem like a terribly dilutive price (i’m an optimist). However, after it occurred I re-read your piece on their last bought deal financing and now I have a new set of concerns, such as is this a pattern with Energold to be worried about? That is, a cadre of large owners and brokers will continue to get preferential pricing on shares as the stock advances and play off of momentum at the expense of some longer time buy-and-holders. Also, as a large holder I imagine you were contacted regarding this last deal, so did you purchase more shares? What are your thoughts? My belief is that the fundamentals of this company warrant a much higher price and its real value are simply not reflected in the current price. I am more than comfortable to wait until the market realizes that, but as someone who began their stake recently at 5.36, I can’t help feel a bit slighted in the short term and worry that these deals could be part of a larger lack of appreciation by management for shareholders.

I was not even contacted in this financing. At least for the last one, they called me. Such is life I guess…. I’m a bit less frustrated this time because there were no warrants. I do feel like short term players are making money off the long term holders and that’s why I hate these deals. That said, the company likely needs the money for growth and I trust Fred to do the right things with the money. The shares will be under pressure for a bit, but eventually, true value will be realized. I’m pretty patient to wait….

Recently the hotel I stay at for my consulting work in Waukegan (north of Chicago) swapped a cable channel with CCTV. I’ve never watched CCTV before, and for those readers who haven’t it is like a CNBC or Bloomberg News; only run by the government of China (so I always find myself trying to measure the amount of positive spin they put on a story).

I think they must spend at least 10% to 15% of the air time on news stories from Africa. Or maybe it just seems that way since my guess is that CNBC and Bloomberg spend less than 1% of their air time on stories about/from Africa. On CCTV I don’t recall any stories on a Central or South American country other than Brazil.

Point is it is very noticeable to me that CCTV is interested in Africa. My view is that CCTV coverage of Africa is another factoid that China intends to be as big a player in Africa as the US has been in Central and South America since the days of the Monroe Doctrine.

FYI – This weekend CCTV did a story about Kenyan businessman and rally car driver Aslam Khan. The story paints a very good picture about Kenya.

China cares very deeply about Africa as it’s a continent that the rest of the West has largely forgotten about–it’s also very underexplored for commodities. Unfortunately for the Chinese investors in Africa, I get the feeling that they’re pretty much universally hated by every African. I litterally could not find a single person who had anything positive to say about the Chinese while I was in Africa. It appears that the Africans don’t appreciate Chinese style imperialism….

Kuppy–Are you looking at all into the natural gas area for investment ideas in this period of price depression. My feeling is that in the medium term prices will revert to a reasonable level, perhaps around $7/mcf, since it appears that gas production in the shale basins that qualify as average in their cost of production is breakeven at about $5.50/mcf. If you can find producers who are profitable at $2 or so, huge ROE are available even at reasonably depressed prices. Any thoughts?

I’m sort of thinking that gas prices stay cheap for quite a while. I’d wait until most of these players go bankrupt. As long as guys keep lending these guys money, they’re going to keep producing. I think you’re too early.

Kuppy-In Up EUR’s, you said that you were adding to your gold. Have you sold?

I added a lot from about 1605 all the way down to the low 1500s. I sold all of my futures for some VERY nice gains. I also added a very sizable position in 2012 call spreads and I still have the majority of those. I seem to have round tripped them, though I sold about 25% of them in the high 1700s…. I’ll add them back if we’re back in the 1500s.