Thoughts from Myron—Focus on Permian Basin & Gold
by takeprofits | January 17, 2014 4:01 pm
AND AN INTRODUCTION TO THE MINI-SLEUTHER
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Source URL: https://www.stockgumshoe.com/2014/01/microblog-thoughts-from-myron-focus-on-permian-basin-gold/
I am surprised you made no mention of Lake Shore Gold Corp. (LSG). I sold all my gold equities when the decline started to really steamroll with the exception of LSG and Gabriel Resources (GBRRF) which I’m holding as pure speculation. LSG is up 40% in the last few months.
Steve: You shouldn’t be surprised, there are only 24 hrs in a day, seven days in a week and only so much room in a column and I have already been criticized for mentioning too many stocks and lengthy write-ups. Seriously, I have owned stock in Lakeshore for several years and is one of my many free trading issues, and yes I still see it as a buy, as it like many others is GROSSLY undervalued by the market currently. The reason for choosing to highlight Balmoral BAR was because it started to move and Darin Wagoner and his team were actually the developers of West Timmin’s whose assets they sold to Lakeshore for $424 Million, and I am simply betting they can leverage that original discovery to do even better the second time around, based on their experience, financial backing and current land position. As for Gabriel, it proves how irrational the market can be, fortunately I bought at the bottom, (.63) and when the Romanian Parliament defeated the legislation to let the project go ahead, I sold @ .98 & .89 assuming the stock would tank again on that announcement. Decent short term profit, but don’t know whether some investors in general just fail to follow their stocks or news concerning them, but strangely the stock has held up in spite of the set back. Will look to get back in if it falls into the .70’s if I can figure out the rational of the government or investors continue to hold.
What’s your opinion of Seabridge Gold (SA)?
Not currently on my radar Edward, though I have been aware of it for years. It has some good assets and qualifies as a “project generator” but for some reason, has been out of favour with analysts and investors long before the sector meltdown was in full swing, not sure exactly why. Its day will come, but I rarely see it mentioned in the dozens of analysis groups I track, so while like most in the sector, it is undervalued, until I see some evidence that it is showing some life in the market and the market is broadly positive, it is not likely a stock I will be profiling in the near future, there are just better buys out there that have market attention.
Myron–
I see that in the last several days shareholders of Callon Pet. have voted to practically double the number of shares. There has as yet not been a significant drop in the price. Your thoughts? Do you think there could be a good buying dip on the horizon? I greatly appreciate your insights on these more junior securities that generally only get pump & dump promoters.
Have been busy with other things Bruce so Callon has not received a lot of attention from me YET! Definitely will watch for a dip in price, but I am puzzled by a doubling of shares, that makes no sense, and I hardly consider a good sign. Usually it goes the other way, a rollback to REDUCE the number of shares. I would want to know the reason, how the proxy fight turns out, any changes in management, before I would risk buying. There was another example in the Permian Basin listings of one stock dropping from $36. to $24 with over a 3 million share short position, might consider Callon if it had that % of pullback, but these “entry points” require serious due diligence and confidence in management that does not now exist by some current shareholder, so caution is warranted.
The report you linked to for Brazil Resources, Future Money Trends, was paid by Brazil Resources to promote it. It contained mostly emotional enthusiasm with little data. The gold concentration found is only 1.5 gm/ton, which is good but not special. Any profits from mining are many years away. This is extremely risky.
Did you check out their website for additional data Conrad? Have been following this company for about a year in which they have made a lot of advances in their drill results and acquisitions and the leadership from Amir Adnani only builds on his success with UEC that I have also owned for multiple years. Besides that, attracting a major Brazilian Bank as an actual INVESTOR as opposed to just making a loan, to say nothing of world renowned commodity investors like Rick Rule, Doug Casey and Marin Katusa investing millions is good enough endorsement for me. Granted profits from actual mining are years away, but the major profits in mining are made in the “discovery” phase, so if you are not comfortable with that then stay away, don’t breech your comfort zone on my account.
There are plenty of producing miners out there you can pay 10 X to 50 X more per share for and get little in return at to-days bullion prices where they barely make any profit, you have to be forward looking and invest when prices are low to sell high when rationality returns to the market. I consider Brazil a potentially more profitable investment then Barrick Gold for one example. Proper RISK management means you ask questions like, how much can I lose, or what is the worst that can happen? How much downside do you think there is in a stock that has already fallen 150% based solely on market sentiment, but has increased its assets at least that much as well as being well financed by strong players?
Just to confirm my confidence in the company and following experienced millionaire and billionaire investors I am not putting my money where my mouth is as per this purchase confirmation from my broker.
You have just received a Trade Alert from CIBC Investor Services Inc.
Details:
Action Bought
Quantity 1,000
Symbol BRI (***BRAZIL RESOURCES INC)
Exchange VSE
Price $0.66
Thank you for using CIBC Investor Services Inc.
Right or wrong you now know I have the courage of my convictions.
Myron, did you ever look at Arsenal Energy, AEYIF in the pink sheets and AEI.TO in Toronto? It was covered on the gumshoe as a teaser article from someone. It seemed like a decent small E and P company but rarely do you see any news or articles regarding Arsenal. Thank you for the article.
I had Arsenal for a few months last year. Went through the reverse split and did not like the way the company handled it. Trading was in limbo for too long. Merrill Lynch advised me that Arsenal had not handled the changes and notifications in a timely manner. I decided I didn’t like carelessness and got out with a 15% profit. I sold for 4.94 and I see it’s still .30 under that.
Believe I did look at it at one point Josh and I will try to take an in-depth look when I can find the time, and/or it appears on any of my extensive “Alerts” as being accumulated. I like to profile stocks that have rather immediate catalysts and/or show signs of strong market interest. Prices don’t go up unless there are more buyers than sellers.
I hope to see you cover it due to a positive alert. I took a small position in the company at the end of December. They paid their 1st dividend in November, which if sustained yields in the ballpark of 5%. They plan to pay 10% of free cash flow. Thanks for the response and I appreciate your insight.
Myron, thank you so much for all the time you spent educating us newbies. About 2-months ago you wrote about Mason Graphite and I bought 8000 shares at $0.344. Needless to say I am a very happy camper. Still holding . . . . do you have anything to new to say about Mason.
I picked up 2000 of Mason at the same time. It looks like I should’ve sold on the spike to around $1, but I’m new at this.
Is it generally a agood idea to take a 100 – 150% gain? or is using a trailing stop a better idea?
Steve, my personal opinion is that we got in so low and during the spike time the volumn spiked like crazy (over 800,000 shares one day and several days from 300k or more and up til that point average vol. was around 112k shares a day) and now the price has been holding steady around $0.65. So we still have a double and when you take into consideration that they are not even in production yet . . . I think we are OK. Remember the spike to $1.03 was because of a property next door to Mason on a news article. From what I could glean seeing graphite hanging on a cliff. If i remember correctly in the original article that Myron did there should be another assay report on another section of the Mason property coming out soon. I am going to hold until at least that report comes out.
Would sure like to hear from Myron on what he thinks at this point.
I’d do BOTH by using a trailing stop out just below the last three days’ low including “today”. Adjust it as needed to follow it up then you will stop out when the reversal confirms with a nice profit IMO. These micros are Swing Traders only IMO and when it dips again you can always get back in and ride it up again.
Thanks Thomas. I didn’t think of the Swing Trader aspect.
I only use “mental stops” because I do not want to alert the market makers as to my sell points. Far better to use “stink bids” so you are automatically taken out on an intraday high that gives you a profit you are happy with. I generally sell, half or even a third on a DOUBLE depending on number of shares held and how long I have held them. The conservative approach is to take your investment off the table to deploy in new picks so a winning stock can continue to increase with what is in effect “house money” so if there is a pullback which is quite normal with juniors when new catalysts are lacking, you have an opportunity to buy back in at a lower price. A DOUBLE in 2 months, do I hear any complaints?
thank you, Martin. Your concept makes perfectly good sense to me. And i have no complaints. I continue to follow your thoughts on Gumshoe and appreciate all the time you take to explain to us. Love your attitude and enthusiam. Also loved your thoughts a couple weeks ago with the thread on the medical stuff. Thank you.
We caught this one at an excellent buy point which I always strive for. Like any junior it is bound to fluctuate given the markets “nervous as a long tailed cat in a room full of rocking chairs” but this is a solid pick I expect to hold for years, but there may well be profit taking opportunities and if I see such I will report accordingly.
What I can not continue doing is all the work for subscribers in keeping up with stocks I profile, I have mentioned several times that it is the individual investors responsibility by registering on each companies website for their press releases. As my portfolio of profiled stocks continues to increase the workload of posting every press release will soon overwhelm even me, workhorse that I am, For example, here is just the Mason Graphite archive I have. http://finance.yahoo.com/news/mason-graphite-signs-agreement-purchase-120000573.html
http://ca.finance.yahoo.com/news/mason-graphite-closes-private-placement-230000425.html
http://www.masongraphite.com/news/news-details/2013/Larry-King-and-Jim-Rogers-Interview-Mason-Graphites-President–CEO-Benoit-Gascon/default.aspx Very informative.
http://www.masongraphite.com/news/news-details/2014/Mason-Graphite-Files-Mineral-Resource-Update-Technical-Report-for-its-Lac-Guret-Project/default.aspx all obtainable by any investor with an interest in the stock by registering on the website.
Myron,
Thanks for all the detailed info. I found Petroshale on the OTC Pink sheets on Ameritrade trading as PSHIF. Does that mean that if I bought PSHIF, I would get actual shares of Petroshale? Or would they be something like an ADR?
Shows just how fast things can move, from the time I started researching the stock, wrote the column and it got printed, sure enough they added an over the counter listing, the drawback being that there may not be that much volume and you are likely to have a wider bid/ask spread on the OTC, so be sure you use a LIMIT order to get the best price and if you are patient you can even use a stink bid, the danger being that if the stock is in high demand after a profile as I just did, then you may not get filled if the stock is trending higher. The safest is to put your bid in mid way between bid and ask and monitor it to be sure you get filled, or change your bid a cent at a time until you get filled. Practice and experience.
Myron,
Thanks for the wealth of information passed by you to the investor community. The article says Petroshale is listed only in Canada, whereas the OTC market has it listed under PSHIF, attached is the link http://www.otcmarkets.com/stock/PSHIF/company-info
Is it not the same company being discussed above?
Yes it is the same stock but see previous note. I am happy to report that management is on the job and their activities drew enough attention that even the Wall St Journal did a short blurb: http://online.wsj.com/article/PR-CO-20140115-911832.html For the newbies, the first thing you should do when interested in any stock I profile is get on their mailing list for press releases, (check website to register) that way you get the same information I do at the same time, keeps you on top of what is happening, good or bad, so you can act accordingly.
A very POSITIVE note in the Petroshale release is that they have hired an Investor Relations firm whose job it is to get the message out to as broad an audience as possible, and that usually means you have a rapidly growing company as more investors are introduced to the stock and interest grows as the company executes well, very positive sign. This again like Mason Graphite was a very timely pick. Hope I don’t spoil everybody with too many quick movers, remember I give all picks a minimum of 6 months to show some profit.
Hi Myron
My focus has been elsewhere recently so Happy New Year. Your GBU tip has treated me well @1.20 ish just touching its 200 day ma 24/1/14. I got in around .67 so I sold 50% to leave me with a good few free shares. Is there any whisper about a government change of heart after all the protests or are they just taking a low profile waiting for the protests to go off the boil. As you said they can ill afford to pass on this one. Im keen to add some more via an 80 stink bid.
As always, your column has a plethora of picks. I appreciate theres only 24/7/365 but there was talk of a spread sheet……any development ? I just have no idea how you keep abreast of so many tickers. Do you have your own spreadsheet system/s or just an elephantine memory.
Hi Myron,
Wondering if you might have any insight on Carlisle Goldfields LTD COM (CGJCF)? With 2.75M oz of gold in the measured & indicated categories, with five NI 43-101 compliant resource estimates for their Lynn Lake Gold Camp in Manitoba. They seem way undervalued & unnoticed on continued light trading at only 0.55. Any comments would be greatly appreciated. PS: I liked your info concerning BRIZF & jumped in at .624 and look forward to reap the benefits in the years to come. Thanks
Interesting handle, actually I think “when to quit” is a good reminder for the type of situation outlined by the Blind Squirrel in his column. In contrast the next few weeks or months may well be the the time NOT to quit, in fact it could well be the opportunity of a lifetime to get positioned in beaten down stocks that have good management and the treasury and assets to survive the past 2 years unprecedented sell off in the junior mining sector.
You mention Carlisle Goldfields, which is another one of the several dozen in my portfolio that I would happily invest more money in, so understand my dilemma, each column I have to choose which are the most compelling in terms of market interest and price movement.
You well describe it as “undervalued and unnoticed” and you are correct, and I doubt anyone will go wrong placing a “stink bid” to acquire some shares, but for column purposes I want to see some investor interest before recommending a stock. If VOLUME indicates there is increased interest in accumulating the stock, even if the price rises, your chances of getting a big return fairly quickly is far better than investing in a dormant stock even if it is undervalued. There is no way I can possibly get them all right, but I hate “dead money” as much as anyone else, so I do my best at market timing to avoid it as much as possible.
Another one to watch Petro River Oil PTRC
I am a new subscriber and respectfully request that you consider taking a look at PETROFORTE V.PFI. Mr. Keith Scahefer form the Oil and Gas Investment Bullitin is teasing this little guy pretty hard. As you know he has had teasers examined by you in the past. He currently owns 2 million shares of PFI at an average buy price of .075
Keith Schaefer is a pretty good analyst in the energy field and I have talked with him several times, and will attend a seminar he is holding in Toronto the day before PDAC, which I also plan on attending. Put Petroforte and Petro River Oil on my growing list of stocks to research but for the moment my own pick of Petroshale is where my available capital is going for the immediate moment in the energy field. For the moment available capital is far outpaced by attractive stocks I would love to accumulate a historically low prices.
Myron, first of all thank you very much for all of your legwork. I had bought some shares of Brazil Resources under the stock ticker BRIZF. Is that the same as BRI? I am a bit concerned as I had found BRIZF listed on the pumpsanddumps website as having 8 previous promotions (http://www.pumpsanddumps.com/2014/01/bo-diddley-linton-takes-his-bad-acting.html) Please tell me if I bought myself the wrong stock.
Thank you so much!
No not at all, it is indeed the Brazil Resources listed in Canada as BRI. What puzzles me is how somebody mistook the BRIZF as a pump and dump? Whoever came to that conclusion does not know what he is talking about. A stock can be “promoted” without it being a pump and dump. The dead give away for pump and dumps is the fine print at the bottom that discloses that they have been paid a fee for the promotion, stay far away. Brazil Resources has great management and major resource investors like Rick Rule and Doug Casey who would certainly not fall for a pump and dump.
Thank you for clearing that up and thank you again for all the work that you do!
Myron, what’s going on with RRIZF today, it had a huge jump. Is it worth it to sell or do we expect more upward movement. What are your thoughts? Thank you.
Myron, I’m sorry it should be BRIZF, Brazil Resources
That explains why I was having difficulty identifying the stock, always better to to NAME the stock rather than ticker symbols because there are so many with slight variations. You should hardly be surprised at a nice bump in the price, that is why I try to do my homework very thoroughly. Do you track the gold price? Gold in the past few days has been advancing steadily and now that it has broken the$1300. psychological barrier it could easily breach $1400. by the end of the months. Pullbacks are of corse always possible, but if you have done your homework and have confidence in management and understand the very precarious financial situation the whole world is in, then a flight to gold should not be a surprise, and of course good gold companies like Brazil Resources
tend to follow, or even run ahead of the bullion price. I don’t plan to sell any until it at least surpasses its precious high around $1.25, and maybe not even then, depending on then current market conditions. I see this as a long term profit maker, so unless you need the money for some urgent situation ??? the choice is yours if it makes you nervous sitting on a profit. Under a 6 month hold I rarely sell a stock under a 50% gain, but you have to do what is best for you under your personal circumstances.
Thank you!
Myron, am I correct in assuming that even though Brazil Resources had already passed its precious high that you are still holding due to market conditions?
Yes nothing has changed in my long term outlook for Brazil Resources and I do not plan on selling my stake under a double.