05/21/2011
December 3, 2017
05/05/2011
December 3, 2017

05/15/2011

Sorry for the sparse postings… Let’s just say I’ve been VERY busy…


I just got email from Mongolian stock exchange broker (Bdsec) about possibility of buying Gov’t backed bonds. Estimated yield is going to be around 6-7 percent. What are the average yields on Mogolian bank accounts?

I think I’m getting 14% at my bank account. If you’re willing to bank with a more risky smaller bank, you can even earn more. Of course, I have a bank account because I expect Mongolian Togrog to double or triple in the next few years. The yield is just a bit of extra upside to me. So far, I’m up over 20% on a checking account!!! (yield and MNT appreciation) I’ve been with Citibank for over a decade and I don’t think I’ve even made 1% yet….


WOINDERING IF YOU STILL FEEL AAG HAS MERIT. ARE YOU HOLDING YOUR POSITON GIVEN THE POSSIBLE CHANGE IN GOVERNMENT POSSIBLE NOT FAVORING MINING COMANIES? COMPANIES.

I still own most of mine. I sold a few shares when it got near to a dollar as it got to be too large of a position. Even if Humala wins, I think he will be rather powerless to change mining laws. I am naturally concerned anyway. On a side note, it sounds like the community agreements are progressing.


hi Kuppy, did i read this correctly ? single digit ? I thought the recent y/e earnings were 4 cents, thus 100 x earnings (at this time) thanks

Earnings are backwards looking. On a forward looking basis, I really don’t see how the company makes less than 40c this year on a standing still basis. There is a case to be made where the company earns much more than that. I intend to write about it soon.


Hi Kuppy,
Really enjoy your comments. You mentioned in the last Q&A regarding EGD, “It’s a mid single-digit PE multiple “.
The Dec Qtr they made 2c/share. I’ve seen estimates from yourself and Fleck of around 40c/share for 2011. (PE around 10-11). So March Q1 needs to be good – I assume results are out soon.
Have you upgraded your estimate for 2011 or you referring to 2012? Back of envelope calculation, how have you come up with the earnings estimate? Hope I’m not asking too much.

I have gotten a few questions about this. I will try to write something about Energold this week. In rough terms, take 2010 meter pricing and adjust for current prices and meters drilled. Also, remember that when they add rigs, it is a one time expense. I’m talking about standing still earnings–not about actual GAAP earnings as there’s no way to know how many rigs are added this year.


Kuppy: Looking for forward guidance on what makes gold catch the next bid and what gets people to focus on how cheap miners are. Its clear to me the market must NOT believe in the sustainability of gold prices here, if they did, the miners would get repriced much higher, at least the majors with huge cash flow and low valuations. EU has severely wounded countries that will force them to print more money to fill in gaps. If they choose not, then the banking system is in jeopardy. Japan needs to print yen faster. US may stop for a bit but I cant believe we will stop for good. Real interest rates still negative, so what makes gold stall or fall very much from here? So why are miners acting so poorly?

I ask myself the same thing every day. I think this is a case of just being too early on an investment. Miners sure are cheap. I’ve expected a revaluation for a few years now. I’m just fortunate that I’ve been pretty successful at trading around the position where I add to my core position when at the lower Bollinger Bands and sell the additional shares near the higher Bollinger Bands. It’s not rocket science, but I don’t mind having a few extra shares if wrong.

If I had to state the bear case for miners, it goes something like this; costs are going up as rapidly as metal prices, governments continue to raise taxes and many large miners cannot replace reserves as quickly as they are depleted, so net-net, these companies are not creating much value, even at $1500 gold.


Dear Harris,
Shalom- you have been quoted by the John Doody GoldStockAnalyst teaser put out by the Stansberry people. What are ;your thoughts about the Doody/GSA outfit? Thanks-

I have been quoted?? I’m scared to look. I think John Doody is a really great stock picker. He’s constantly outperformed the XAU and HUI for years now. When it comes to picking gold stocks, he’s the only letter I read any more. Most of the others are just touts for junior mining stocks.


Regarding your post on a potential flash crash upwards in gold. I would benefit from if I didn’t have a (future) fixed benefit pension, an interest bearing 401K plan, and a pre-occupation with consuming beyond the tame core inflation categories (darn that food & energy). Do you think that Fred Hickey is right that mining stocks won’t flash upwards until after gold does so? Any opinion on whether or not a stock like Energold will lead or trail any upward momentum in the mining stocks?

There’s no way to time these things. I have a history of being too early, though I tend to be right in the end.These mining stocks will go up when they’re ready. Fred’s guess is as good as anyone else’s. My call for a flash crash wasn’t a timing call for an immediate flast crash, but rather an opinion that we’re nearing a time when it becomes quite likely in the future.

I would think that Energold should lead as it’s not tied to the price of gold, but rather tied to the need for miners to replace decades of depletion.


I am a fellow investor – Since you’ve done some work on the paper industry have you looked at XRM? It is more of a picks & shovel play on the paper industry. It’s written up on VIC – take a look. Piqued my interest since Thirdpoint filed a 13G on it. Since you have done some work on the industry figured I would ask as I am not well versed with the paper biz.

I looked at XRM a few years back. I don’t know enough of the business to really have an opinion. I think there’s big oversupply in hardwood pulp products, so I’m only interested in NBSK right now. Think I’ve got enough exposure through FBK and MERC. MERC is like 2x run rate cash flow. Why complicate things…??