I also would like to ask you about Iron ore. Iron ore stocks are trading at cheap multiples (2x-5x) depending on mine life, quality of product, etc.
What is your outlook on iron ore prices? Do you think they will fall sub $100? Or greater?
I know nothing about iron ore except that some of the miners seem cheap. To have an outlook on prices, you really need to have a view on worldwide GDP and I don’t have a strong opinion on what happens over the next few years. I sorta think there’s a muddle-through process with a lot of inflation. That should be good for prices of all commodities, but you should be thinking of margins–not just sale price for iron ore. Inflation may not be kind to your iron ore mines.
Great input on Mongolia; thanks. Why do you feel the pubilc companies are not the way to go with this trend (Monolia Mining, Ivanahoe, Rio)? Also, I’ve had some success with Tri-Tech – awarded bid for China’s Mongolia Water Treatment Plant….
The public companies IN MONGOLIA are a great way to go with the trend. Unfortunately, they are too illiquid and disclosure is terrible. I do not consider RTP and IVN to be mongolian equities. They’re mining stocks with no correlation at all to the Mongolian economy. For disclosure purposes, I have bought small positions in quite a few public companies traded in Mongolia.
thanks for the insight into doody’s service. I have subscribed. Any other books, etc to learn more about gold stocks, terminology,valuation methods etc? Have you read Goldwatcher by Frank Holmes? Re your insider article i called mark zabel and asked him about his purchase of 27k. He said he currently owns 1.76m shs—he really believes in aag. Did not know if you saw the latest analyst report on aag out yesterday. I called the analyst and had a nice talk with him. He seems to be conservative and mark indicated he was. would you look to add to any of your stocks on the pullback if it gets any deeper?
Doody’s service is excellent. I really have never found any good books on how to invest in mining. I have never read Goldwatcher. If Frank Holmes wrote it, it’s probably worth reading. The Northern Miner has some good books out about geology and mine construction and whatnot. They’re worth skimming if you want to get your educational level up. The real trick is to do it for 5 years, meet a lot of people, go to a few dozen site visits and make a billion mistakes. It’s going to be the most expensive education in your life. I have not read the analyst report yet. A few friends told me they thought it was well done. I will read it at some point. I try to add to positions on pullbacks, but we haven’t really seen a pullback yet and these shares are up so high above my cost basis now that I doubt we will have enough of a pullback to get me excited. That said, I have a very big cash position and cash is a decaying asset when Ben Bernanke is in charge… I’m more focused on finding new investments–unfortunately I haven’t found much that interests me.
I loved reading your adventures about Mongolia, i felt i was reading an updated edition of Mark Mobius “Passport to Profits”. Anyway if you are interested in investing in Mongolia there is an Australia company called Hunuu Coal Limited listed on the ASX – code HUN which has coal exploration leases in Mongolia. They say they are potentially near planned rail lines if China ever gets to building them. Anyway they are in a trading holt currently due to some major annoucement probably a capital raising.
Thanks for thinking of me. I am focused on the Mongolian economic boom created by mining. The actual mining stocks are uninteresting to me as mining is an awful business, though there is some serious money being made by some Mongolian coal companies.
Do you have any take on Robert McEwen’s investments like US gold, Minera Andes and Lexam exploration…
Also wondering about Aberdeen International (tse:aab)..
thanks for your time again..
I wouldn’t bet against Rob McEwen, but have always thought the valuation on US gold was goofy. I don’t know the others. Sorry. My focus isn’t really junior miners.
I consider myself very lucky to discover your blog through Mr. Fleck. I have learned a lot from you guys. I am just a neophyte with the markets, and just trying to educate myself. I am just wondering if you have read of “Triffin’s Dilemma,” and if so, if you’d mind explaining in layman’s terms how it relates to the current fiat money problems in the world. Do you think the return to the gold standard is inevitable? Also, on another note, if you haven’t read about it, there is a history book that might interest you that just came out.
I have never read Triffin’s Dilema, but wikipedia gives a good summary. http://en.wikipedia.org/wiki/Triffin_dilemma Will we go to a gold standard? I don’t know. We certainly need something as a global currency that doesn’t fluctuate 5% a week like the US Dollar. How can anyone do business when all their inputs are in constant flux? There are very few businesses that have 5% net margins. If you hedge your exposure wrong, you’re in trouble now. I pass the book idea to readers who may be interested. I have never read it.