Friday File: Thoughts on Gold and Commodities (and a few Real Money Portfolio updates)

... plus a quick note on questions about Paul Mampilly's latest $10 Million Portfolio teaser pitch

By Travis Johnson, Stock Gumshoe, January 4, 2019

Happy New Year to the best readers in cyberspace! I hope your 2019 is fabulous… and that you don’t have too many heart palpitations following the last couple weeks of market and political brinksmanship.

I haven’t written to you in a while, thanks to my much-appreciated time away with family and friends in the mountains, so in addition to the first part of the Friday File (released this morning, a teaser solution for your edutainment), I’ve got some minor updates on the Real Money Portfolio to share… as well as some thoughts about gold.

First, today I’m adding a little bit to my Altius Minerals (ALS.TO, ATUSF) position, just to be contrary for a stock that’s been falling sharply.

It’s falling for good reason, China slowdown fears mean that everyone is panicked about raw materials costs falling — so copper prices are down and iron ore prices are down, which drive much of Altius’ royalty revenue… though potash prices, their other big contributor, have been steady to rising a little.

Altius continues to have some debt, about C$120 million, but also plenty of financing flexibility and some equity and debt investments beyond the royalty portfolio and project generation portfolio, so the (small) dividend looks quite safe and they should be able to make further deals if they see anything compelling. I don’t know if they’ll get anything out of their Alberta coal claims other than a long drawn-out legal fight, but they are again getting royalties on Voisey’s Bay after settling that long legal fight, so that’s going to again be a revenue-generating part of the business instead of an odd footnote on the reports.

I allow my Altius dividends to reinvest, and this week I decided to boost the portfolio position slightly with some new money as well. I’ve done that pretty regularly for years, and it hasn’t worked out particularly well yet — Altius has been a drag on the portfolio, but I continue to think that their assets are more valuable than they’re being given credit for… and that they should be able to earn a stronger valuation if the commodities markets turn positive again (as they typically have, eventually, at least over the past 20+ years), along with possible windfall gains if some of their prospecting projects or spinoffs can be sold at high prices in the next peaking ...

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