Hitting The Century (VII – Natural Resources)

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agri-business, BP, bubbles, correlation, garbage stocks, gold, Howard Marks, idiots, inflation, junior resource stocks, miners, natural resource stocks, oil, Petroneft Resources, QE, quantitative easing, Richland Resources, silver, Statoil, Total

In my recent Inflation post, I elaborated on my conclusion that, contrary to widespread (and my prior) opinion, inflation was likely to prove a fairly distant threat. Despite the smoke rising from the bloody printing presses… And despite the Fed since confirming their long-expected QE III – or should I say: QE Forever, QE Infinity, QE God Fucking Save Us… Take your pick! You know, the mind boggles – how/why on earth does the Fed confidently expect Agency MBS purchases to smoothly flow through into improved labour conditions?!

No real need to revisit my post, just read Howard Marks’ latest instead, which came out a few days later. In his memo, he covers much of the same ground – probably in a far better & more relentless manner… [And apologies if I ramble on: Remember, with this series, my intention isn’t to necessarily write about specific stocks here, old or new. Rather it’s to give you some deeper insight into the thoughts, logic and pros & cons underlying each of my allocations].

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Hitting The Century (VI – Real Assets)

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agri-business, balance sheet, bank lending, churning, commercial property, de-leveraging, deflation, ECB, Fed, gold, inflation, natural resource stocks, portfolio allocation, residential property

Oh well, back to the grind..! Continued from here, and I guess here: I actually started writing this post the other day, but quickly got side-tracked into a different post – after all, one can’t really talk about real assets without first taking on inflation! For reference, here’s a reprint of my investment allocation pie-chart:

TGISVP – What’s Interesting, What’s Not..?

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Bank of Ireland, bubbles, dividend yield, DYOR, intrinsic value, ISEQ, natural resource stocks, Ovoca Gold, Permanent TSB, Petroneft Resources, Ponzi, portfolio allocation, portfolio performance, Prime Active Capital, REIT/MLP sector, stock screener, TGISVP, Total Produce

In my last post, I was pleased to see TGISVP continue to deliver significant out-performance vs. the ISEQ benchmark. Early days yet: This could be blind luck, but hopefully it’s derived from a robust analytical process that clearly identifies over/under-valued shares. Which naturally demands a bit of a refresh…

I haven’t actually felt compelled to perform any Irish share revaluations since my TGISVP X post, even for stocks I hold. Personally, I’m pleased with this – I’m v comfortable with my Irish holdings, I believe my valuations are robust, and there’s been no unexpected news-flow. In light of my current Irish portfolio allocation (16%), and actual stocks I hold, I’d be reluctant to add another Irish share. This doesn’t mean forgetting the rest, of course! It does mean I can just watch out for interesting price drops, rather than agonize over constantly refreshing valuations.

TGISVP – H1 2012 Performance – Firing On all Cylinders!

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Aer Lingus, AGI Therapeutics, Alpha Portfolio, Beta Portfolio, Botswana Diamonds, Cove Energy, Datalex, ISEQ, Karelian Diamond Resources, market-neutral, natural resource stocks, Ovoca Gold, Petroneft Resources, portfolio performance, Prime Active Capital, Providence Resources, Readymix, Risk Arbitrage, Siteser, Smart Alpha Portfolio, Smart Beta Portfolio, TGISVP, Worldspreads

Now H1 2012 is over, it’s time to revisit The Great Irish Share Valuation Project. Here’s my Q1 2012 performance post – well worth revisiting as background, but I’ll recap some important points below.

Let’s first look at individual stocks. I count 4 de-listings (which I’ll continue to include for performance purposes, at their final values): AGI Therapeutics (AGI:ID/LN) was a profitable Event-Driven investment for me, and inspiration for some detailed Risk Arb. posts. Siteserv (SSV:ID/LN) & Worldspreads (WSPR:LN/ID) both exited amid scandal – possibly criminal in the case of the latter, with alleged charges now including share price manipulation, in addition to accounting/actual fraud. Finally, Readymix (RYX:ID) succumbed to a Cemex (CX:US) bid, illustrating that the right investment thesis (an eventual takeout by the controlling shareholder) is not enough. Timing & the price you pay are equally important – despite the bid premium, RYX’s multi-year operational & price decline meant v few long term shareholders made any profit. Looking ahead, Cove Energy (COV:LN) seems set to follow the de-listers, but promises to provide some final drama!

H1 2012 Performance!

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Argo Group, Avangardco, Baker's Dozen, Irish Stock Exchange, Irish value investing, natural resource stocks, Petroneft Resources, portfolio allocation, portfolio performance, Richland Resources, Russia, The Office

OK, it’s performance time. For reference, here’s a link back to my Q1 2012 review.

If I told you European markets were actually positive in the first half of 2012, would you believe me?! Actually, it’s true. Wow, doesn’t feel like it, eh..? Hmm, I think we all know that’s just the tip of the iceberg in terms of the tricks the media & your own mind/emotions play on you. Say what you like about Microsoft & Excel, spreadsheets are your only hope of separating fact from fiction, and analysis from emotion (as for Powerpoint, sigh…).

Some notes first: For simplicity, an equal weighting is assumed for all stocks. No attempt’s made to calculate any FX gains/losses either – which would depend on your base currency anyway. If a stock wasn’t held/written-up as of year-end 2011, the price noted at the time of my investment writeup is used instead. Similarly, if a stock was sold (marked**) before end-June, the price noted when I reported the sale (via blog post, comment and/or tweet) is used. Right, so how did we do in H1 2012?

Feeling Blue? Try Some Richland Resources

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Bezant Resources, De Beers, Gemfields, Ian Harebottle, luxury goods, natural resource stocks, Pallinghurst Resources, Richland Resources, tanzanite, Tiffany & Co, tsavorite, Waterford Crystal

Continued from here:

Let’s throw in a final negative – hmm, again, I’m not sure it’s a negative, maybe we should tick it as a neutral?!:

d) I was surprised to see a recent announcement confirming Bernard Olivier‘s been appointed CEO of Bezant Resources (BZT:LN) (which has granted an intriguing option on its Mankayan project to Gold Fields (GFI:SJ)). He wants to be CEO of two companies simultaneously?! Jesus, my ambition is to be CEO too…but just for one day, and then gracefully retire on a quite modest package..!

On The Way To Damascus…

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Damascus, garbage stocks, natural resource stocks, quantitative easing

Some people may have got the impression that I hate natural resource stocks..?!

Not true at all! In fact, natural resources in the ground are maybe one of the few things in our history that politicians and central banks have not been able to debase. You should definitely grab some (more) for your portfolio, especially now the Fed seems hellbent on reflating the US, and the entire world. (I recommend you watch this quantitative easing primer – v precise, and hilarious too!).

But if you stray from the industry giants, buying into the oil & gas/mining sectors is like entering the lion’s den. Be wary! The old quote ‘A mine is just a hole in the ground with a liar on top‘ still holds true far too often, except now the miners have such cushy numbers they actually believe their own hype…

Would Groucho Marx Join This Club?!

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AIM Soiree, AIM stocks, Gulf Keystone Petroleum, Hot Tuna, Leed Petroleum, logorrhea, natural resource stocks, penny dreadfuls, Petroneft Resources, Philip Fisher, scuttlebutt

You may have noticed I added a new AIM Soiree link – I see Philip O’Sullivan fell for this site also! I found it last year, and (a bit of a surprise to me) have enjoyed visiting it regularly since. Take a look, I recommend it – the design has a ’50/60s cartoon vibe (unusual for a finance website!), and it (rather smartly) ranks the Top 10 (& 100) AIM Stock Discussions from across the web.

Why the interest? Well, I’m fascinated at what pops up! Yeah, you guessed, it’s stuffed to the gills with natural resource penny dreadfuls! Oh Lord, fuck a duck… Not too much of a stretch to assume the most discussed stocks are also the most popular stocks to invest in (occasionally to short, but for the overwhelming majority it’s to go long)? And trawling through a few boards, it seems like there are plenty of people out there who believe they’ve got a well-diversified portfolio simply because they own 5 different resource stocks (not all oil stocks, you know ;-))!?! This idea’s even more insane than the stocks themselves. Got any friends like this? Can you help ’em out, buddy, please?!