Golds next bull run? What to buy?

By jbnaples, March 3, 2016

Gold looks to be headed higher even with a strong dollar so what are the best ways to play the next bull run in gold? I know Travis has (SAND) in his portfolio but I’d like to know his thoughts as well as yours. Do long term call options make sense for more leverage? I’d like to know what others who believe gold is going higher are buying and what worked best the last time gold reached new highs. Thank you in advance for your input. JB

This is a discussion topic or guest posting submitted by a Stock Gumshoe reader. The content has not been edited or reviewed by Stock Gumshoe, and any opinions expressed are those of the author alone.

hendrixnuzzles
Member
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OIL AND GAS SECTOR…no positions…Katusa and Africa Oil $AOIFF I am not in the oil and gas sector, got out of my majors gracefully a while back (XOM, CVX) and have stayed away until I can feel more comfortable in the sector. Complex, volatile, complicated sector and I’ve got my hands full with biotech as it is. But in passing I thought I would call out that Marin Katusa seems to be very interested in Africa Oil and did a feature article on it in December. Very long-term play with huge upside (Katusa’s opinion) and it may be one of… Read more »
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Travis Johnson, Stock Gumshoe
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Katusa started writing about Africa Oil again last Fall, and I noted it a few times (I still own some AOI.TO/AOIFF) — they still have huge execution risk, which mostly comes down to the government setting the stage for real infrastructure that would make it feasible to produce the oil, I’d say oil production on a meaningful scale within the next ten years is probably still a long shot… but they do have large discoveries and they have well-heeled partners who are signed to put up much of the development cost, and, unlike most junior oil companies, they have a… Read more »
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hendrixnuzzles
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Yes, Katusa asks…”What can go wrong ?”… and his answer is “LOTS.” But I think his underlying premise is that the Kenyan fault zone is simply too large and potentially lucrative for the area to be overlooked for very long, and AOIFF’s position in the region is so dominant that eventually there will be a realization of the asset. Katusa also states that he is a long-term investor who is willing to accumulate and wait years, if necessary, for the bets to pay off. And he already was “right” once on AOIFF, it made it all the way up to… Read more »
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ksand52
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Long (IVPAF) – Ivanhoe Mines No position Yet (ANCKF)– Anfield Gold
No position (RVRLF) Reservoir Minerals Inc
Earlier today I was watching a video of Rick Rule on BNN and he was discussing his feelings about Ivanhoe Mines, Anfield Gold, Reservoir Gold. While talking about Anfield Gold he mentioned Ross Beaty and his 30 year relationship with him. I started my research on Ansfield Gold and have not confirmed it yet but it appears at this point that Beaty is the largest shareholder in Anfield. Still checking and more homework to do.

http://www.bnn.ca/Video/player.aspx?vid=869679

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Sharon Schreiner
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HN, here is another of Armstrong’s blogs (yesterday) on the gold subject. He has always been predicting a rise and then possible fall before the final bubble, and, of course, the fact that our dollar is rising due to our being the central economy and having the reserve currency, gold in our dollar terms may not shine for a while. We have time on our sides to figure out the best plays and then watch like hawks from the side for really good entry points. Unlike Armstrong, I don’t actually recommend waiting until then to buy anything, although when he… Read more »
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hendrixnuzzles
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Hi Sharon, once again I find myself in agreement with you…I am not in favor of waiting around for a better time to make core long-term investments, although I will add to positions on weakness.

Sharon Schreiner
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This has some of Armstrong’s thinking as to the whys of gold not yet rising, and you will notice that it is because governments are trying to prevent money leaving their countries and rendering gold less useful for big money to get out of dodge! It is also why the DOW may rise just as much as gold.
https://www.armstrongeconomics.com/markets-by-sector/stock-indicies/dow-jones/the-dow-the-confusion/

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investor101
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Wow, thanks to all of you for your valued thoughts. What a topsy turvy world we live in. As I looked at my array of holdings I bought for various reasons, and how to cut down to 5 would be very hard to do. My kinda thinking was 5 eggs in the basket or 12? I have to face the fact they , meaning Casey, Rule, Katusa, and friends have an insiders view compared to us. We are very, very fortunate to have this forum to interact with each other, thanks Travis! As more and more participate we find ourselves… Read more »
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ksand52
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My heart and prayers always go out to all that serve, those that have served and their families. A humble Thank You never feels like enough.

investor101
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Ksand, Thank you so much for your kind thoughts and prayers. I am trying to keep my mind busy with all of this, it takes my mind off of all of that!! I love this forum, and all the interaction, I am learning so much and trying to continue to learn more. My plate is full.

hendrixnuzzles
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I do remember them. I think there is a really unfair division off the burdens of protecting our country and our freedoms, and the rest of us who benefit therefrom.

dcohn
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Of course we must be concerned of all enlisted people but to believe they are being used to protect us for me is irrational. The US creates these situations for economic gain. There are no real wars just the ones planned for profit. Terrorists are backed by money generally from the US and its partners in crime. As a starter read Confessions of an Economic Hit Man or even better he wrote an update called new Confessions of an Economic Hit Man. Then do some research on each event of the past 100 years or more you will be shocked.… Read more »
arch1
Member
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To slightly alter a once popular quote;
Under Capitalism man exploits man. Under Socialism it is the exact opposite.
man exploits man,, in the Bible it is stated this way, man dominates man, to his injury.

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frahman
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Two minute cartoon summary of the Economic Hit Man book : https://youtu.be/m-dsiufhMu0 Frankly, it’s really not what I come here for, but the ‘patriotic’ discussion so far warrants some counter balancing – personally it deeply saddens me how countless people on this planet fear American attention. They are every bit as human as we are. Our soldiers inflict death and destruction upon the lands, schools, hospitals, road networks, infrastructure of the poorest on earth. And we have the gall of saying its ‘protecting’ ourselves. Yet its never other nations building military bases on American soil, never foreign soldiers killing American… Read more »
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investor101
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Thanks Frahman, I couldn’t agree with you more! If others came to our country in this capacity I would probably fight them to the death too! I think it horrible that we have become such a warring nation of people. I hate all of this aggression too! No wonder the other countries hate us so, I can’t blame them one bit! I sure wish I could go to a country and live where this was not so, but of course, I never will leave all my family. It is all about damn greed and dominance period!!
hendrixnuzzles
Member
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Hi frahman…we can agree on our wish for our friends and relatives to come back alive and healthy from military service. The soldiers are the instruments of policy, and therefore deserve some exemption from responsibility for the harm they inflict on the orders of others.

But I disagree with your perception about American aggression. I am far from being an apologist for American actions, which at times have been unjustified and aggressive; but this thread is not the place to debate the matter. So please no free shots here about American aggression, imperialism, and so forth.

frahman
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hendrix you are welcome to your point of view, but calling what I wrote as ‘free pot shots’ doesn’t automatically make your point of view correct. If you want to credibly moderate the discussion here to keep it on topic then equally, please call out the ‘free pot shots’ at the rest of the world, even those done indirectly through the implication that it is ‘patriotic’ or ‘serving’ to go bombing other nations back to the stone age.
“I was just following orders” is an old fraud, which the Nuremberg trials demonstrated was no excuse.

arch1
Member
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frahman Here I must support HN as he is the moderator, The proper place for this type of discussion is here;
http://www.stockgumshoe.com/2016/03/microblog-club-house-for-the-discussion-of-religion-politics-and-other-unmentionables-volume-5/comment-page-9/
Here you are free to discuss and support your position in a polite manner in the interest of learning each others view and reasoning. All views are welcome.

hendrixnuzzles
Member
9935

Hi frahman, I am not claiming my point of view is correct, only calling out that your point of view on the subjects you are touching on is subject to debate, and that this is not the place for it. Expressing your point of view on perceived American aggression in a forum where it is not a proper subject is taking a free shot.

frahman
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Hey arch, I find this blog a great discussion of resource investing. That’s what keeps me coming back here, and I hope I can contribute meaningfully. I will be delighted if I don’t get distracted by discussions of ‘patriotism’ and ‘service’ and if those who want to talk about (and make value judgements on) those things would do that elsewhere. Here’s getting back on topic then, I’d be interested if you heard about something called LENR ? I recently saw some discussion about it. I think this is something that survived from the Cold Fusion drama / fraud a few… Read more »
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hendrixnuzzles
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Hi frahman, you have made many excellent contributions to this thread and I hope they continue. And I think it is perfectly OK for people to mention things slightly off-topic, it happens, and makes for a more interesting dialogue. But you are being unbalanced when you start drawing analogies to Nuremberg, or by suggesting that I am being unfair by not asking a mother to refrain from praying and hoping that her son comes back alive, and avoids harm while he is doing patriotic service. Whether you agree with the policies of our government or not, whether the policies are… Read more »
Sharon Schreiner
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Thank you HN. I’ve been biting my tongue here – wrong thread, but I would never want a mother of one our soldiers (God bless and be with you and your son, Investor 101) to feel anything but love and gratitude. You expressed my own feelings wonderfully. Frahmen, your thoughts are interesting … so if you have the courage of your convictions, repost them on the proper thread and let’s have the debate.

frahman
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Hi investor101 – iirc Katusa’s subscription costs $25000 to get in, THEN $12500 annually! (You can sell your ‘slot’ or let your heirs inherit it.) Out of my range. I’ve tried to look up Katusa’s fund (the KC50 partnership he started in 2009) on http://www.sedar.com but no joy. If anyone knows what it might be called you could try to do a search by fund name and their audited accounts might show exactly what mining stocks they hold, as public record. Then again it might actually be registered in the USA but I’ve not done any hunting on edgar.gov for… Read more »
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investor101
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Frahman, I like Marin Katusa, but I don’t like him that much! Looks like this is the playground for the very wealthy and I don’t fit into his world. I like Rick Rule, he seems very down to earth. I think I might call and even invest with them. I find myself spending a lot of time trying to keep up with all of this. I think I would be safer in his funds or whatever. I certainly am grateful for all of you who do so much investigating and sharing of the info. I do have something to add… Read more »
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arch1
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I am bitter toward the cause of your son now being exposed to danger. That I see as the precipitous and total pullout without leaving a security force of sufficient size behind to maintain US bases and protect US interests. That would include making sure the Iraqi army was able to maintain order and not run like whipped puppies at their first test. Thus ISIS. IMHO
In time I think it will be realized that was a bigger blunder than Viet Nam.

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Travis Johnson, Stock Gumshoe
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These are all relics of the Cold War, the divvying up of empire after WWII and the competition for “dominos” from Vietnam to Afghanistan to South America led to all of the latest anti-imperialism that, along with hatred of Israel, add fuel to the tank for the radical islamic groups who provide some promise of organized resistance to empire. Except now “The West” and our near-monopoly on capital, military spending, and mass media is the only real empire left, and the only real target worth hating. Or, to be too glib about it: Destroy a few villages in the name… Read more »
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arch1
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Total agreement from me.

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investor101
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Arch, thanks! I too am very angry about the whole mess. We don’t take of our own business and meddle in everyone else’s as if we were God and knew what was best, which is the biggest joke of all. I cannot imagine the stress these soldiers are living under every day, it has changed my son, and it has not been for the better. It will turn out to be a bigger fiasco than Vietnam was. I find it completely insanity for my son, to be assisting these guys, that were trying to kill them previously! I don’t want… Read more »
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wneils
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Watch some of the HD helmet cam battles on YouTube and you will get a chilling sense of the stress they feel. Reminds one of the same futility they felt in Vietnam.

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hendrixnuzzles
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HOG ratings for gold explorers, week ending 5/20 For those interested, the Hendrixnuzzle’s Optionality Grade is a metric I have developed that gives the relative upside potential of an explorer’s “gold in the ground”. It is only one of several factors that should go into YOUR due diligence. The HOG ratings are neither a recommendation to buy or sell a stock, they are just my attempt to quantify the “optionality” aspect of these companies, as I understand the term from Rick Rule and various other analysts. The HOG ratings are real measures, involving over a dozen variables and mathematical operations… Read more »
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hendrixnuzzles
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This week I have added Detour Gold. But Detour Gold is a major operating producer, so the optionality aspect of Detour is not as pronounced as the explorers and developers. Detour is more of the “anti-optionality” producer type, who has large fixed current operational overheads and is mining and selling off reserves at current prices.
This of course is not to say that Detour Gold is a good or inferior investment. It would be highly leveraged to the price of gold, up or down.

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hendrixnuzzles
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Clarifiction: I am not long Detour Gold, I have only added it to the list of companies for which I am calculating HOG values.

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hendrixnuzzles
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Marin Katusa and his FIVE picks…Katusa said only that his personal portfolio is being pared down to five picks. He did not say they were miners, and in fact becasue of his strong background in energy, I would be surprised if at least two of his picks were not in energy. (I suppose BRIZF and UEC can both be considered in the energy secor because they involve uranium). I also do not thing that FIVE picks are a suitable portfolio approach for me, or for many other investors. But it is illustrative of something I have come to believe, insofar… Read more »
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hendrixnuzzles
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GOLD POSITIONS…also I wish to clarify that the majority of my positions in gold and silver stocks are NOT in the optiuonality plays in explorers and developers for which I have done HOG ratings. The majority of the capital I have in gold and silver positions is in much more established miners and royalty companies, such as PVG, FNV, SAND, RGLD, and physical bullion. I also believe in larger established miners such as NEM, ABX, and AEM but have recently reduced positions in these to bulk up on PVG and SAND, and to find some capital for the optionality plays,… Read more »
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ksand52
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HN no hurry, but if You get the time I would be interested in seeing the HOG ratings for Anfield Gold. Anfield acquired Magellan Minerals to Develop the Coringa Gold Project, Brazil on May 9 2016. I was able to confirm that Ross Beaty is the largest stockholder of Anfield. Anfield is in the process of creating a new Web Page but Here is the link to Magellan Minerals site from the Anfield site where they have posted a N1 43-101 PEA from Feb. of 2015 and a N1 43-101 Resource Estimate for May 2015 for the Coringga project http://magellanminerals.com/projects/advanced_gold/coringa/… Read more »
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ksand52
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Sorry I forgot to say I did take a position in Anfield Long (ANCKF)

hendrixnuzzles
Member
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I checked the ANCKF site, they have no proven reserves.So it is a judgment call as to how much recoverable gold you want to assume.

If you tell me how many ounces you want to assume is recoverable and in the ground, I will
do an optionality grade based on that assumption.

My feeling is that Rule has information well beyond what is shown publicly. But that is guessing.

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ksand52
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O.K. Thanks Let me do a little more homework and I will get back to You

hendrixnuzzles
Member
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Depending on the gold reserve figure you select I would say this:
500K ounces or less…ho-hum
500-1000…average to above average HOG rating
1000-1500…above average
1500-2000…strong HOG
over 2000…very strong HOG

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hendrixnuzzles
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$AU…Yamana Gold…No position….While reviewing the royalty deals in place at $SAND Sandstorm Gold, I noticed that there are two important producing royalties from Yamana Gold AUY. Checking out Yamana, I found the following information. Yamana has an important open pit operation in the CHAPADA deposit. Besides being an important source of ongoing production, the Chapada deposit has a number of very promising NEARBY drilling targets that could conceivably make a dramatic difference in the resource value and mine life of the exisiting facilities. The nearby targets are in the same geological formation and there is a $6 million 26,000 meter… Read more »
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hendrixnuzzles
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$AUY Yamana Gold…No Position Some further info on Yamana Gold. 950 million shares, 52% institutional holdings, short interest 1.8%, dividend 2 cents. They have 1.8 billion in debt. AUY has nine producing mine assets, mostly gold, silver, copper, plus significant projects under development and exploration. Annual production is approximately 1.25 million oz AU, 7 MM oz AG, 120 MM/lbs copper. Measured reserves are almost 16Million oz AU, 102 MM oz AG, and 642K tons CU. AISC is $805/oz AU, $10 /oz AG. As an investment $AUY should be considered a mid-tier producer, not a speculative optionality play. The “optionality” values… Read more »
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hendrixnuzzles
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$AUY, $SAND…long $SAND, no position $AUY… On consideration I think my ever-increasing position in $SAND gives me sufficient upside exposure to $AUY. Sandstorm Gold has three major streams/royalties from AUY production (Chapada, Cerro Morro , and Gualcamayo). No issue with anyone liking $AUY as a miner, but as I say I think I’ve got plenty of exposure to $AUY based on my investment in $SAND. I do like combing through the deals that Sandstorm has made because it reveals small caps and even micro-caps that are relatively unknown, but have been the subject of geologic and financial due diligence by… Read more »
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investor101
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Thanks Hendrix, I saw or heard it somewhere that Rule had reduced his position in AUY, but for what reason, none given. Maybe he thought another producer was better for his money. Also wanted to ask you a question. I am having to buy my stocks on the NYSE, TD Ameritrade does not allow me to buy the Canadian exchange. Do you think this makes a big difference?

hendrixnuzzles
Member
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Which stocks are you unable to buy ? Maybe I am missing something but even the little guys can be bought on the OTC market even if the home exchange is is Canada.
I usually give the US symbol. There may be a little slippage on the OTC bid/ask spreads, and so forth, but so far I have been able to get everything I have mentioned through Schwab.

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hendrixnuzzles
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Rick Rule and $AUY…this makes some sense to me since Rule seems to be the originator of the optionality concept, and my own work suggests to me that $AUY is not
a prime optionality play. IMO It is a good producer, but not an exceptional optionality play. Remember also that $AUY has gone from $1.38 to $4.50 in three months, a triple, so Rule may have done very well and consider that he has better odds in other places.

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investor101
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Hendrix, first of all I want to apologize to one and all. I so enjoy everyone and you are all such great resources of wisdom for me! I have got to learn how to go to different threads to blow off the steam….. so now…forgiveness is in order for over the top behavior on my part… I have bought all of my miners with the NYSE symbols, over the counter, which when I go to check out a stock on yahoo, shows the Canadian ticker is different and they are higher. Of course I realize that is because of currency… Read more »
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frahman
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fwiw here is what I remember about Yamana (I’ve got a deeply underwater position still waiting to catch a breath one day). * About 3-4 years ago Yamana was first brought to my attention by Simon Popple of the MoneyWeek people, as one of his so-called ‘Supply Kings’ that were going to make folks rich. (Sobering to read that stuff again: http://moneyweek.com/gold-why-i-like-the-mines-better-than-the-metal-61726/). * The Yamana CEO won some kind of award for being a great CEO and was the only CEO of a miner to get that crown – something like that. * Yamana was distinguished by focusing on boring… Read more »
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hendrixnuzzles
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They still show reserves 16 million ounces of AU and 100 million oz AG and a whole bunch of copper. And the Chapada zone may add a lot to reserves.

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hendrixnuzzles
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$AUY Good morning, frahman. I think $AUY is a solid producer and you will eventually be made whole on it, if our ideas about metal prices are correct. You should take comfort in the fact that Sandstorm Gold has three major deals with them and therefore are also entusiastic about their prospects. And they have real geologists looking at the deposits.

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hendrixnuzzles
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$ERDCF…Erdene Resouces…No position….this is the Canadian exploration company looking for gold in Mongolia. It is selling for 35 cents. Sandstorm Gold has a NSR on Erdene, and Sandstorm Gold also owns 5 million shares at 20 cents, which they may or may not retain as they see fit now that they have negotiated the NSR. Erdene has an interest in two underground deposits Hugo North and Heruga, which are adjacent to the Oyu Tolghoi open pit mine. All three together can be loosely referred to as the Oyu Tolghi project, which is being managed by Rio Tinto. Some interesting things… Read more »
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investor101
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Think I will buy some too! I agree with you, they would definitely move to commit me! I am already scoffed at by our financial advisor, our accountant and my husband! They think I am really stupid, and the only support I find is here in this forum, where I feel like I am not alone in my feelings. I do have to agree that I could very easily be a gold bug! I have collected mint sets and silver dimes since a young girl, so I guess I have always had an affinity for what I could hold in… Read more »
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Sharon Schreiner
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Investor101, sometimes the right thing to do doesn’t mean profits, but it actually can still be the right thing to do. I think of gold as insurance against loss of confidence in the government, and while I do hope and believe gold prices will eventually have their own bubble, that isn’t really my purpose. I buy life insurance, too, but will be very happy if it is never needed.
Having a portion (small) of our investments in gold is wise, even if it is never uber profitable, IMO.

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investor101
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Thank you, Sharon…my reasoning has been to have some physical also to protect my loved ones. Yes, I do think there will be a time to buy and a time to sell, I guess that is why I am trying to understand and stay on top of these investments I have made. I am grateful for all the giving and great people here in Gummy Land!! 🙂

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Patricia
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Perfectly stated Sharon!

hendrixnuzzles
Member
9935

No one will be laughing at you if you own PVG, SAND, SLW, ABX, or FNV.
Just make the Mongolian and explorer speculations at the end in the proper proportions
and you will be able to fight off the commitment proceedings.