December 3, 2017
December 3, 2017


Bernanke and Draghi get to work


At least Bernanke has the sense to get off at the end.

I don’t usually post these sorts of things, but I really haven’t laughed this hard in a while…

“Then, I drank a huge glass of vodka, to ward off the bubonic plague that they sometimes carry….”

That’s hilarious.

I’ve been in Mongolia for almost 2 years now, I’ve learned to follow after my Mongolian friends–especially when it comes to food preparation….

Have you looked into Loyalist Group; LOY on the TSXV. It is a business roll up on ESL Learning Centers. They are centered around Toronto and Vancouver where the majority of immagrants settle. Schulich has a large position.

I was wondering your thoughts.

Sorry, I don’t know them.

why doesn’t Fred Davidson use some of the $20+ million he raised from his bot deal earlier this year to buy back shares around $3? I realize he wants to use the funds to purchase companies in his field selling at a discount to book value but wouldn’t this help instill some confidence in shareholders?
thanks for all your help!

I agree completely. it’s not like EGD doesn’t trade for just about book to begin with….

Kuppy, regarding the EGD quarter: did it deserve to get taken out back?

They came in a bit light, no real disaster. I think it’s more about guys extrapolating a bit of weakness and thinking that next quarter will be worse…

I was trying to buy some more shares in the low 3’s and didn’t get filled on much.

Hi Kuppy,

I won’t ask you about Energold’s Q2 because I know you will write about it if you have something to say 😉

But I’d like to ask you about how you see Energold vs owning precious metals directly. Does EGD serve a similar purpose to gold in your mind, plus some gearing (and the energy and manufacturing as bonus), or does it have a different role to you?

Another way to ask this is: Do you feel that EGD protects you from the same kinds of things that gold protects you from? If paper currencies lose tons of value and there’s a big economic crisis, do you see that being automatically good for EGD, or is there a scenario where EGD executes well yet suffers while precious metals do very well?

In economics, anything can happen. EGD is no substitute for gold.

Warren Buffett owns coca-cola because there is a huge return on capital, growing market and inflation resistant. That’s how I see EGD. It’s just a great business in a bull market in resources. I would own it even if I were not bullish on the price of gold.

Can this stock really work without friendly capital markets for junior miners? This is more a general question of the state of the mining industry and Davidson’s capital allocation decisions. Assume mining profitability remains at these levels. I assume that the majors aren’t devoting a lot of capital in far away, hard to reach places. If the market for junior spec plays doesn’t turn around, can the company really reallocate all their rigs to seniors (and will Davidson be disciplined enough not to continually reinvest in new rigs in the hopes that he will be positioned to build his empire waiting for the “inevitable turn”)?

I think the company does just fine if there is no capital market for juniors. The company re-allocated rigs to the majors in 2009 and did just fine. Remember that the majors really have no choice, if juniors aren’t exploring for metal, the majors have to find it. In the end, you cannot have an industry that continues to discover less metal than they mine. Pretty soon, they will simply run out of reserves–which is what is happening…

Dear Kuppy,
With all the recent action in the egd price maybe it is a good idea to a new writeup on this company. Like you have done in the past, but just a bit updated. I think it could be insightful to see how you update your views on a company -similarly for mercer and other investments.

I did a piece on April 18. Not much has changed. Remember that I buy companies with a 5-year view. I look for businesses that have a macro tailwind and a cheap valuation and then once I’ve decided to invest, I really don’t get too granular on the numbers each quarter. As long as the trends are going the right direction, I tend to be very happy.