December 3, 2017
December 3, 2017


Obviously, by definition winners have good ‘charts’. Do you find technical analysis useful to ‘reverse engineer’ your process (use technicals and check fundamentals after)?

Technical analysis can be helpful to time entry points. However, I find it sort of useless as I’m looking to make long term investments over multi-year periods. During that time, sometimes my charts look ‘good’ sometimes they look ‘bad’ and a lot of the time they look like nothing. I just buy it if it is cheap and buy more if it gets cheaper. Remember, I need millions of dollars worth of stock to compelte a position. I don’t have the luxury of being patient to get the best price on a pullback. The effect of my buying also creates the charts that you see.

Great post, so what comapnies benefit the most? Im assuming its part driling, mining equipment, drill bits,etc but would love to have some names to do more research on. Is it the BUCY/JOYG guys or smaller companies? thanks

All of those companies will benefit. My preference isn’t for the BUCY/ JOYG of the world because they derrive so much of their business from recurring parts/service revenues. I wouldn’t expect exploration spending to have much impact on them. I prefer greenfield exploration service companies like Energold. There are dozens of companies in this sector, but after having gotten to know most of them, I think Energold has better management and a better product than most of the others. Of course, I have likely missed a few gems in the industry.

2 part question, firstly general then specific
With the recent activity in Coal, I’m wondering what your opinion on the commodity is. It appears to entering a bull market with strong fundamentals for the long term sustainability of demand due to growth in India and China.

In terms of specific, I would love to hear your opinion on the company, Continental Coal (CCC.AX). A South African coal explorer and development company that has recently transitioned to producer. It is currently listed on the ASX. It appears to be in a prime position to benefit from said market conditions.

Coal isn’t all that environmentally friendly, so it’s sad to see its use growing, but it is growing and rapidly. It is a bull market and demand will likely remain in a bull market for years as it’s a cheap source of energy. Put it this way, if the Federal Reserve cannot print it, it is probably going to be in a bull market. Coal is no exception. I don’t know all that much about it unfortunately.

I know nothing about Continental Coal. That said, I would be scared to death to own any assets in South Africa. I have a sneaking suspicion that in the next few years, something very bad will happen to all commodity assets there. Either tax rates will increase, or they will be partially confiscated again. I have no money in South Africa, and like it that way. More than ever, going forward, the geopolitical and where your assets are located will matter more than what your actual business is.

good list of books. Can I add some? Fleck’s book on Greenspan; Jim Grants books; the art of speculation by Phil Carrett (I had the privilege to meet him several yrs ago at Buffetts annual meeting—he was 101 at the time); Robert Hagstrom has written good books on Buffett. Phillip Fisher books.
Do you subscribe to any of the gold newsletters such as Doody’s? Fleck recommends it but he says the guy has gotten carried away re price. Your site and Fleck’s and Hickey’s have made me lots of money. thanks.

For readers who care, Fleck’s book is great. Anything by Jim Grant is excellent as well. I’ve never read the others unfortunately.

The only gold newsletter I subscribe to is Doody’s. The man has consistently outperformed the gold index during the last decade. How can anyone say that Doody has gotten carried away on price? I’ve made millions on his recommendations. So what if it costs a few hundred dollars more a year? Don’t you want advice from a winner? The problem with gold newsletters is that almost all of them get cheap shares before the IPO in exchange for touting whatever stock it is. It’s dirty business. I’ve met Doody. He’s an honest guy and a great judge of value. If you cannot cough up the $995 a year, you shouldn’t even bother investing in gold stocks. He also has a new cheaper service where he talks about his top 10 list.

I read Fred Hickey as well. I would recommend it to anyone.

Thanks for posting my comments on Mongolian opportunities-you probably saw that Ivanhoe has made a major discovery at Oyu Tolgoi this week, which increases the value of the project substntially.

You mentioned visiting Argentina, which i had the pleasure of doing with my wife (and without the kids) earlier this year. Cresud looked the most interesting ADR play but Buenos Aires’ faded glories, delightful to visit though it is, is a good reminder of why culture can matter more than any amount of natural resources in being a good place to invest.

I saw that news on Oyu Tolgoi. A good asset just got even better.

Argentina is a shame. It is so rich in land and resources, but incompetent government meddling has ruined it for the Argentine people. One of these days it will be a great investment, but it may need to hit rock bottom first.