December 3, 2017
December 3, 2017


i have a question concerning apex minerals. for me it feels as if the time has come to buy apex in size. it seems they are on track to become a profitable mine but the price has not responded accordingly. the volume in the last two weeks feels like the last sellers before it is free again. my suscpicion was tax loss selling but then i saw that Grand TG Gold Holding reduced their positon from 260mio to 202mio in the last two weeks. do you have any insight why they are selling? tried to find out if they need the money but they have such a bad website and are very intransparent. currently their stock (8299:hkg) is halted because of a delayed quarterly report i think. any insight would be helpfull.

The rumor is that Grand TG is short on capital. I don’t know how much more they intend to sell, but I hear they have money issues there. Just remember, this is underground mining. One or two good months doesn’t always mean victory. Something always seems to go wrong when you have a high cost operation.

Kuppy, what is the real story between IVN, and Rio Tinto ? I can not understand the 14% drop in IVN, from what I have read.
Would you kindly shed some of your wisdom on this subject ?

I have no insight beyond what is public. Rio wants more exposure to Oyu Tolgoi and IVN wants to make them pay dearly for it. I think the share drop was because investors have been thinking that Rio would overpay for the part of IVN that they do not own. Now it seems as though they’ve reached a new agreement. Then again, all the mining stocks got slammed this week, so it could just be that.

My question is about India. My investments have been focused on China for the past five years but my research is now leading me into India. I have this ‘feeling’ that their future growth will remain high and be more sustainable and balanced than China’s, for structural reasons that will persist (and are improving). 1) Have you focused your research on India, what’s your impression. 2) Do you own or are you closely watching any Indian companies?

BTW, a good read is Super Power by Raghav Bahl. He compares and contrast China vs. India. FYI, Tata Motors (TTM) trades at 8x next year’s earnings (due to highly publicized short-term problems with the Nano) and is positioned to benefit from Asia’s auto boom.

I know very little about India. I’m sure there are good places to invest and there will be piles of money made there. I just find it so big and monolithic that I cannot figure it out without putting all of my energy into it. It’s hard enough for me to stay on top of small companies here in North America. I’d rather just guess that if India grows, they’re going to need more stuff, so commodity prices stay high–hence I’m going to invest in commodity plays. I know it’s a weak answer, but you cannot follow everything.

What a terrific piece on Iceland. I visited the country a few years ago and I too was impressed by the level of education and the attitude of the people.

Your assessment of the way they handled their crises could not be more spot on. The problem the US has is that the central bank (Fed) is controlled and beholden to the “Money Trust” and will protect their interest at all costs – even if it results in the US Dollar losing it’s reserve status and many people lose their lives in the suffering of civil unrest that is bound to follow. Human greed seems to know no bounds…

I guess the only difference in Iceland was that the crisis was of so many orders of magintude that they couldn’t just print their way out. They needed a complete reset. They had no choice, so it forced them to do the right thing. But yes, entrenched interests usually just take care of themselves, unless they’re totally destroyed like in Iceland.

Nice piece Kuppy, I generally feel the same way.  I see that a deal has just been reached where Icesave will repay $5 billion.  This will help further in restoring their scarred reputation.  I think it’s great that the people are getting back to business and re-acquainting themselves with traditions like fishing and farming.  This gets down to the crux of the problem in the ‘developed’ world.  It is politically unacceptable, and generally unfathomable for most people to think they may have to accept a low paying job that, to date, has been likely filled by an immigrant worker.  Instead, the focus lies on social handouts that will keep the boat afloat until the miracle recovery ensues and employs people once again in cushy jobs.

As I am predominantly an equity investor I fully agree with your opinion that you bite the bullet and take the pain quickly and restructure everything.  However, if I am underwriting debt I would prefer the customer who gets bailed out.  It’s like the kid whose father co-signs the loan.  For this reason I guess many investors would argue that Ireland is the preferred route.  Regardless, the big question in my mind is how risk gets re-priced on future debt (knowing you are dealing with a customer who has shown reckless behaviour in the past and one that will run away from most obligations at crunch time).  I know that in the world I have lived in to date, the market has had a short memory for these kinds of sovereign disasters, but I am betting that in the future there will be a dramatic re-pricing of risk around the world.  Perhaps in this new world money won’t be so quick to re-engage with customers who have been so irresponsible (or it will be at a substantial cost).  Unfortunately, perhaps fishing and farming might be the fuel for Iceland’s engine for a very long time!

I hadn’t really thought of it this way. I guess there is an added cost to failing because future debt will get priced at worse terms. The problem is that if you tell people there’s an implied put, they will just lend money to anyone and underwriting standards will collapse (which is what has basically happened in the Western World). There will have to come a time when lenders ask themselves if they want to get bailed out at par in rapidly depreciating currency, or if they want to own part of a restructured company in a sound currency at a 50%+ haircut. I would probably prefer the latter. But then again, most lenders aren’t very astute lately.