[ed note: Travis is off on a training ride today, so Myron Martin volunteered this teaser solution that he came up with for a bonus article today… we’ve edited it for clarity, but this is his work and his teaser solution to a recent pitch for Lombardi’s Profit Taker, whose recent ad promises “The Secret Gold Stock of the World’s Greatest Stock Picker”, for your edutainment… enjoy, and please comment at the bottom if you have questions or comments for Myron.]
Maybe this is something to celebrate. I am writing this on our 56th wedding anniversary.
The following teaser appeared in my in-box this past week from Lombardi Publishing, who announced the return of a man they have labelled “the worlds greatest stock picker” — and we’re told that his very first stock pick this year in the gold sector, already returned 625%. He had retired 3 years ago after being editor/analyst for Lombardi’s Profit Taker newsletter, and though they begged and pleaded for him to return, it was not until the gold market began to rally that he agreed to do so.
I recognize the name Robert Appel but I don’t recall ever reading his materials or investing on his advice, but here are some selective phrases from his pitch to renew his service.
He claims, “we are in golds 4th super cycle in which the metal could hit $5000 an ounce,” and gives his reasons WHY! For those so inclined you can see the original “teaser” ad here.
Lombardi’s pitch throws out past gains like .47 to $132, gains Robert Appel has made in the past, to get your attention… and introduces his new pick as a recent IPO also having a 625% potential gain.
Robert believes, (and I tend to agree) that the bottom of the gold market was reached in Nov. 2015, which is why he agreed to come back and resume his illustrious career in stock picking. He cites as his main reasons the world wide move to negative interest rates and the fact that “paper gold trading” now exceeds 293X the actual available gold for delivery. That caused him to withdraw from the market in disgust, we’re told, because the regulators were allowing this blatant manipulation to exist except for minor “slaps on the wrist” in the form of millions of dollars in fines, but no bankers have yet gone to jail, so far it seems the profits are so lucrative to them it is just a cost of doing business.
So what has changed? Robert saw the establishment of the Shanghai Gold Exchange as having a good chance to bring market pricing back to what it should be, price discovery by actual supply and demand fundamentals.
Robert’s focus like mine is on the junior miners, and as usual in these “teasers” his publisher throws out some pretty fantastic numbers, and states “the SMART MONEY is buying into gold hand over fist.” Potential gains are phenomenal, even potentially life changing.
The ad says that his new “below a dollar” stock pick with “near term production” has a “10 bagger potential within months.”
Here’s a bit from the ad:
“Well, we’re looking at a tiny junior miner with the gold-producing assets of a giant. And I’m not kidding…
“This mine was owned by Barrick Gold for seven years, and it cost them over a quarter-BILLION-dollar investment…
“That includes all the infrastructure to get it ready for production. And it was just about to get started…
“But as gold slumped and hit bottom in 2015, Barrick was selling off its assets (some analysts said it was forced to).
“Including this one.
“In stepped a team of superstar gold vets who scooped it up.
“They didn’t pay half-a-billion, however. Not even $100 million or $50 million.
“They bought it for the FIRE-SALE initial price of just $2 million… literally pennies on the dollar.”
The mine in question was originally acquired by giant Barrick Gold (ABX) 7 years ago for $141.5 million, and they subsequently spent an additional $100 million on permitting and necessary infrastructure to bring it into production.
When Barrick got into financial trouble with some major projects that ran into permitting problems, it became a non-essential asset (as a relatively small mine in comparison to their major producing mines). Believe it or not, after an investment of over $240 Million in the super high grade project, Barrick sold the mine for just $2 Million (plus future profits from specified future production I will mention later).
While I recognize that Barrick is the largest gold producer in the world and is the darling of many institutions and hedge funds and a must for mutual funds, I personally don’t trust management or consider them shareholder friendly. At best I might consider option plays knowing those facts, it is not a stock I would want to own personally because I view management as having an “entitlement mentality” far more interested in feathering their own nest than rewarding shareholders.
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This was cemented for me when I learned they paid an $11 million SIGNING BONUS for an executive they wanted, which I consider simply obscene, nobody is worth that kind of money at the expense of ordinary shareholders. That money would have gone a long way towards rewarding shareholders from the profits possible by a producing high grade mine, and there have been multiple mistakes like that to leave a sour taste in my mouth and put them in my bad books.
Putting that aside, I am happy to be able to pick up some of the crumbs from their table by their ineptness. Barrick Gold has sold numerous assets, you can Google “Barrick Gold sale of Papua New Guinea gold mine” and you will get load