Maybe I'll be able to get in again in the 2-4 range. That worked well for me in the past. This thing has been a shorts dream for the past couple of years - especially for a short chartist. Lower Highs (35 APR 11, 30 Aug 11, 25 Feb 12, 20 Sept 12, 15 Aug 13) and Lower Lows. Great channel. We may see another local high at 10 sometime but ...
Good news is not really a marketable quantity. Hype, SA's one and only real production, isn't really worth much. This baby has been trying to monetize its assets for far too long. I, for one, don't think they ever will. They will continue to pay Mr. Fonk and his cronies until they have no more cash, and no more new investors.
At which point, they will be sold piecewise for practically nothing. KSM will end up in the hands of a startup that aims to "buy undervalued mining properties", "enhance their value" and "monetize the holdings" through an outright sale or a joint venture with an active mining company. Oh wait been there done that.
Trading at a 12.4% discount to NAV and Yielding 8.5% sure looks like it has priced in a pretty good rise in interest rates. Europe is still cutting interest rates - but the US appears to be just about done. The resulting rise in the US Dollar will hurt a lot of emerging economies. I am currently betting that the yield will continue to rise - possibly pushing 10%. That would mean a a price in the 10 dollar range.
The yield and discount are tempting but I still like my cash. Ain't paying didley but It has kept its value for the most part. I think I'll take the 12K I would have invested here and put it towards a Serengetti trip next year.
I waited until this past week to jump in (again). The 12% discount and nearly 9% yield were just to tempting. JPC and JPS are very similar - I usually just go for the biggest discount - and am not afraid to switch should the relative discounts change.
Besides the hefty dividend (partly courtesy of the large discount to NAV and partly due to leverage) both of these funds are earning more than they distribute. UNII is more than 7 cents in JPS. JPC is earning 105% of its distribution.
With the latest congressional Snafu, It looks like ZIRP will be around for quite a while longer - meaning the cost of leverage will remain near zero.
Everything looked good to me.
As my mom used to say - "Smile things could be worse". I found out she was generally right. I smile and things got worse.
Even in a mining company the executives don't produce any gold - miners do. Unfortunately this company has nothing but executives - and they do what all mining executives do - they produce hype.
Maybe it was just an EPA concern - but that doesn't change the fact.
Another fact, the Hollister mine (Winnemucca NV) and the Esmeralda mill were recently in Bankruptcy. The Hollister Mine is one of the richest in the world at nearly an ounce of gold per ton of ore and produces 80,000 ounces a year. The mine is built and operating, and the mill was in place and permitted - and they went bankrupt.
Waterton Global bought them $15 million, plus a 15% net profits royalty agreement that can be terminated after five years.
The price will be lower and hel1 will have frozen over. Anglo American just walked away from 500Million invested in the Pebble mine. What makes anyone think they or or any other big miner are going to invest in KSM in the bear future.
ESD has now closed its discount to NAV to 7.6% while gaining a half a buck and paying a dividend since 9 sept. I still think this has a lot of risk - and I am being very cautious. If I didn't feel that there was a lot of risk here I would trade ESD for EMD (EMD is trading at a 9.1% discount) but I am going back into cash for a while.
Been there - done that. I got in years ago 2-4 and out near 20. I finally figured out that this was nothing but hype. Took my profits and left.
I still come back often to read comments (entertainment value). Thanks