Thoughts from Myron — ETFs, Rare Earths and More
by takeprofits | September 27, 2013 1:01 am
Guest Commentary for the Friday File
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Source URL: https://www.stockgumshoe.com/2013/09/microblog-thoughts-from-myron-etfs-rare-earths-and-more/
Myron. looking into some of the stocks and I have a couple questions on the stock prices. AKS you mentioned at under 4.75. tday’s price is 3.77
RES.to 3.05, its at 2.67
IB.V YOU MENTION A 52 RANGE OF 1.20 TO 10.00 and priced at .38. Current info is quote of .05 and 52 week range .04 to .57.
Can you comment?
David: Between the time a stock get researched, then a profile written and finally published, a lot can happen. That is why I always recommend using “stink bids” checking historic prices, even splitting your purchase in 2 or even 3 tranches depending on the size of your portfolio.
The explanation for your questions are really quite simple, i.e. thousands of other people probably read commentary I did that, “the steel industry is turning around” leading to a “POP” in key stocks/ETF’s in the sector. This resulted in the stocks being bid UP which on AKS was $4.75 on the day I wrote. As is usual the market reaction was short lived, “knee jerk reactions”) are the norm, so all that I can tell you is you are lucky to be able to buy it @3.68, which may not last long. I have no crystal ball to tell you whether it could drop a few cents more (where stink bids come in) or if you fail to buy at the price available it will jump back up quickly to where it was when I did my analysis, or maybe even higher. Basically the same answer is appropriate for RES, if you can buy to-day @ $2.67, consider it a gift given that I sold @ $14.55, and the company is a prime player in the rare earths field. I consider 20% movements up or down in a week with juniors as quite normal, nothing to panic about IF you are confident of the long term potential and fundamentals of the company.
Next you quote IB-V correctly @.05 with a 52 wk. range of .04 – .57! Go back and check the CONTEXT! I only mentioned it was a “portfolio stock” I should have rated it as a 1% stock until it at least reaches .07 at which point I would consider it safe to double the allocation.
I can see where you made your mistake, The IB-V comment was an “inset” in the TRER profile relative to their Beryllium resource only, there should have been a paragraph break when the profile on TEXAS Rare Minerals resumed which was correctly quoted as the 52 wk. range of $1.20 to $10. showing what an absolute bargain it is. Being sold down to .38 when it has made significant progress since it was priced much much higher merely shows the “effect of market sentiment” turning solidly against juniors to the point of irrationality and makes it actually much LESS RISKY, IMO and a screaming buy because the market has not yet discovered this stock as it has some other rare earth stocks that are more advanced in their development cycle. Proof reading is a tricky thing when it is done by someone who did not write the original article, but also a lesson for me in respect to the use of “inserts” that are only related to the core of a profile but not the main stock itself, so thank you for asking for clarification which will no doubt help other readers.
Myron, thanks for taking the time to provide a detailed answer. Much appreciated,
Will look deeper into a couple of these stocks and thanks for providing me with some insight into a sector I have not yet explored.
Was that us swinging the price up this morning on TRER?
No way of knowing Jay, unless everyone on this list who bought the stock reports the SIZE of their purchase, then maybe we could make an intelligent GUESS. While quite a few of my profiled stocks have had a nice pop shortly after publication of my column, I personally DOUBT that there is a big enough audience to influence the market that much.
Unless there are some millionaires lurking on the website that can afford to invest $5000. to $10,000. on a micro cap we should not be moving the markets. As a reminder, even though the type of stocks I tend to profile I may have followed for 6 months to a year BEFORE picking a good buy point, most are still SPECULATIVE and only deserve money you are prepared to lose while expecting to hit a home run on some. I emphasis again, these are not stocks that should constitute your basic investment foundation, they are the POOL from which most 10 baggers and better originate, but that may take YEARS so my personal strategy is to take small positions so that 1 or 2 failures will not devastate my portfolio. You ADD to stocks that have done well AFTER you get at least a good part of your original investment off the table, at least that is the conservative approach. If you make a BIG allocation to a micro cap I profile, that is your decision and I take no responsibility.
This particular stock has a market cap of only $14 million, any public mention of it at all could easily move the price by 10 percent or more. I don’t know if Irregulars bought it, but if a dozen of them bought $5,000 stakes that would almost certainly cause a spike in a stock this tiny.
Thanks for the replies, Travis and Myron. Now I kinda wish I’d helped push the price up a little bit that day.
I agree with Travis, his point is well taken, I just hope that is not the case because it is NOT what I am advocating. The stocks I am profiling with a price under say $3. are probably for most people appropriate for no more than 5% of their portfolio, which is the reason for my cautionary note above. As a pick proves itself by in the case of miners, adding to their resources, hitting milestones like PEA’s, Bankable Feasibility Studies, etc. subsequent investment may be justified as the price moves up on company FUNDAMENTALS, not temporary spikes due to publicity. In fairness though, like any other sector, a given stock may be temporarily out of favour for any number of reasons, valid or not, and it is those undervalued stocks that I look for at potential turning points in market sentiment.
Its not just the picks, it’s the education I gain from your every letter. Suddenly I begin to understand something about a sector (about 0.01% so far…which is a massive improvement over any other sector!!) While I dont always agree with your general trading strategy (everyone has an opinion) it does force me to ‘think’. Thank you Myron .
(And thank you Travis for taking a risk with your ‘baby’ and giving Myron and Doc a platform on the hallowed GS Irregs. I think its been a REALLY GOOD move for the site to diversify from ‘just’ being tease buster supreme. Cultivating any other sector specialists? How about a Technical’s guy or Options….Pant….pant….pant)
Myron, Quick question: Thanks for the risk % attribution. If 1%= for ‘play’ money only and 5% less risky portfolio grade money, how high does the chart go, just so I know when to ‘Put the mortgage on it’ ? 🙂
Im UK based. Can someone explain why its soooo difficult for you US guys to trade UK stock? I trade US, Russel, Pinks etc most days. My stodgy bank online system allows me to trade Canada, all Europe, Singapore, Oz, Brazil, Ecuador plus almost anywhere you can think of. Is this just a case of the US being jingoistic and deliberately limiting trading so that all the investment stays home?
Hi, I’m an irregular and I was wondering if your site can provide the returns of Myron’s recommendations like ‘Irregulars performance”. I’ve been burned pretty bad on prior recommended mining stocks, not Myron but by other sites and individuals.
Hi Tony
Sorry to hear about your past disappointments. I’m not a GS employee (just a fan) but I think its v important that everyone understands, especially in respect of such a volatile sector as Junior Miners, that Myron is here to bring us the ‘story’, use his deep knowledge/experience to relay the results of his own research/analysis and add his personal impression as a summary. He may also write about his own personal picks/portfolio (decent of him to share such personal info). But, unless I’m very much mistaken, he NEVER specifically recommends any trades to GS readers. The idea is that, armed with his info, and after your own further due diligence…… it’s your money and your decision as to whether you invest or not.
Given the above, plus the fact that Myron has only been writing here for a v short time, I very much doubt the ‘returns’ you request will ever exist.
Good luck with your investing.
Probably not for a few weeks, we’re working on putting a spreadsheet together. The few stocks that I’ve suggested for gains of several hundred percent took years to get there. Myron may well suggest some stocks that have huge returns, I don’t know, but his stocks tend to be extremely small and volatile and levered to commodity prices so there will be big swings.
Weeks??? Well hush my mouth 🙂
It won’t be a portfolio to follow or anything that specific, we’re just trying to track the stocks he says he likes.
Naturally I understand that what you are intending to provide seems innocuous enough and I shall be thrilled to have it. (Doc too please). But there’s a fine line between a recommendation and financial advice….perhaps its all in the disclaimers, so I’ll happily defer to your lawyers advice on this one. As Manquel from Fawlty Towers would say ‘I know nuffing ‘
Recommendations are “I like this stock, I think everyone should
consider it because of the prospects and current valuation, financial advice is “this is good for your portfolio because I know your situation, your needs, and your risk tolerance”. At least that’s how I think of it — we can recommend things the way a pundit in the newspaper can recommend things, but we can’t tell you that something is appropriate for you personally.
ps Irregs do pay for this info dont they? Still we all blythely tick boxes without reading the small print.
Thank you for the legal definition Travis. You know we only query coz we care.
Travis is right, gains of 100% in regular, (what I call typical establishment stocks) usually do take years. The stocks I follow tend to be the explorers or near producers who on major discoveries can easily explode several hundred per cent, but it requires an investor with a relatively high risk tolerance and nimble trading. Obviously it is easier for a stock under a dollar to double in a shorter period of time than an established company with a stock price say over $25. that is already known by most investors. I like to follow management groups with good track records that have the confidence of major financing groups, but unknown by most retail investors. When adequately financed and getting in early the ride up can be fantastic well before they catch the interest of Wall St. & Bay St. who pay little attention to stocks under $5. When stocks bought under $3. finally reach that magic threshold of $5. and the big boys start to pile in, that is when you get a big payoff. Actually I have two targets, currently stocks in the .20 to .50 range of which there are probably hundreds beaten down in the last 18 month market sell-off, of which a few dozen at least still have solid fundamentals that can offer fantastic returns when the market turns positive.
My second favourite group to research is rising trends in stocks over $2.50 or close to $3.00 when on my trading platform they become leverageable. Judicious use of leverage can boost portfolio returns dramatically, but should only be used by experienced traders with tight stops and a trading mentality as opposed to buy and hold, willing to take frequent profits and not get greedy in a rising market.
Already in the works but may take a few weeks. A lot of data to compile.
Hi Myron,
Have you thought about recruiting commenter Anony Mole……….. What’s Cabot’s “best stock in the market across all sectors” Today?
To-morrow I will be attending a wine and cheese party in Toronto to hear direct news from North American Nickel NAN Mgmt. and anyone else in the Greater Toronto area interested in attending can also register for the meeting at the King Edward Hotel on King St. Actually, they had a major press release today announcing that their working capital has been boosted to $7.5 Million today by their biggest shareholder expressing their confidence in the project by exercising warrants to the tune of $3.8 Million dollars. Access the press release at the URL that follows: http://www.stockhouse.com/News/Press-Releases/2013/10/02/North-American-Nickel-Announces-the-Sentient-Group-Exercises-Warrants hope to meet some subscribers there at 4 P.M.
A Suggestion: Why not break down your list into those that are above $5 a share, then move ahead with a list that we can evaluate. What do you use as a screener going forward into your decision to make a “Buy?”
Basically I am a fundamentals guy. My screening involves getting on as many stock tracking sites as possible, checking out individual websites and if they spark any interest at all, signing up for press releases to get the latest information. I may follow a stock for a long time before finding what I consider a good buy point based on numerous criteria and potential catalysts. ! have a large list of “Investor Relations” people who tip me to new stocks of interest that are “making a move” or have near term catalysts, sort of similar to the numerous people on the Gumshoe list that send Travis “teasers” to solve as I have done for years. That is in addition to my personal diligence of checking out Mgmt. and director cross links with different companies in my huge data base, all in all this is a full-time job, even though I am not yet earning a full time wage. I do it for my own trading portfolio primarily, which is WHY I believe my picks are in many cases better than paid analysts who are not allowed by their publishers to personally invest in stocks they profile. I have skin in the game and put my money where my mouth is, and NO I won’t get it right 100% of the time, and neither will any of you, but it can certainly be BOTH a learning experience and profitable at the same time.
Once again I seek to keep everyone up to date on the latest news from stocks I have profiled, in this case ARGEX Titanium http://argex.ca/documents/Argex%20Oct%2010.pdf
Hope everybody is following the developing interest in the North American Nickel NAN story as it is news that drives a stock price and over the next few months there will be plenty to keep investors piling into this stock. They released a very positive press release to-day, so important that trading was halted and presumably will be lifted to-morrow so when trading resumes I will be watching to either buy more or take some profits on an intra day high if it jumps by the same percentage as id did with the previous press release.
It has been 4 months since I first profiled the stock and already it has delivered a TRIPLE if you were paying attention. Bought at .22 and don’t plan on selling ANY until I can sell at a dollar or better.
Hi Myron,
I get the press releases but I don’t see anywhere that says the stock trading is halted. I look at the websites and check the stock price and can’t tell. What am I missing?
Thanks so much!
Brian
Here is the link to the toronto globe and mail site
http://www.theglobeandmail.com/globe-investor/markets/stocks/news/?q=NAN-X
Thanks David for helping to educate everyone on what is happening with NAN, and while the price has not moved up YET, in this crazy market that goes DOWN even on good news, (not unusual this past year), you should SEPARATE market sentiment from Co. fundamentals.
Doing that, you should consider this a BUYING opportunity, by thinking LONG TERM!
While I am not advocating “BUY & HOLD” per se, it should be obvious that the company has excellent management, is adequately financed with strong partners and is advancing the project at a steady pace and adding value/derisking the investment with each positive press release, and many more to come over the next 6 weeks or so as more assays become available.
Adding to your position on DIPS has to be considered a smart move, certainly it is a bargain under .40 and likewise don’t forget about VMS Ventures holdings in NAN, it may be an even bigger bargain at current prices given production of copper from the REED mine in Manitoba has commenced so risk has been reduced as well. Note in the press releases that NAN was a “top gainer” for the week according to Ubika and that leads me to draw attention to another press release in the list from the Globe & Mail David posted.
Prophecy Coal Corp +33.33% is Top Gainer in this Week’s Ubika Mining 30 Index Report | Tuesday October 8, 2013 9:55AM. This is another stock I have held in my portfolio for some time and indicates improving conditions in Mongolia relative to my previous column re possible investments in that rapidly growing economy. Certainly a one third gain in a week is nothing to be anything but excited about. Again, use stink bids to find a cheap entry point on ANY of the stocks I have profiled over the past months.
The more I read here, the more I like it. I’ll have to allot my time so I can catch up with pretty much everything posted here last 6 months. Love it. I owned wscrf for 1 yr. but had to sell it when unxl & pamt crashed. Averaged down when it hit .16 cents, sold .38 cents. Think it will pull back under .25 cents, hopefully have some cash then.
Hello Myron, I know this is an old post but since this is the place I learnt about Argex I just wanted to let you know that I am still very involved with the company. I belive the future for them is great and even if it is taking a lot more time that I thought to get the financing and build their first plant, in the medium-long term I think this company is a winner. I am long rgx.to and have done a lot of DD and read a lot of material online and the more I read, the more I like the company, but again we will have to wait and see.