[Fultonius]

Obviously I follow a bunch of people in tinnickelcopperland. One guy I follow closely is Mark Thompson, a director at Meridian Mining, Cornish Metals and a bunch of others in that sphere. Worth a follow if you're interested about investing in tin, copper and commodities in general.

There's an IPO coming to the LSE main market (not AIM). Marketing for it starts on Monday. Company is called First Tin. It has exploration projects ongoing in Germany plus a project in Aus. Like Cornish it could be another good one to get in early as the whole tin thesis - demand for 'green' tin instead of destructive Indonesian dredging, increase in demand from the energy transition and the move to put 'chips in everything', and the raging commodity price, - is beginning to get noticed by the crowd. It'll be interesting to see the marketing but from their website they're obviously heavily playing the ESG card for their 'environmentally sound' tin produced in Germany and processed in Europe. This is the way the market's going, more and more people want to feel reassured (somewhat belatedly..) that the raw materials in their car, phone, laptop and charging infrastructure weren't obtained by reliance on poverty-stricken teenagers dying in artisan Myanmar mines or via destroying marine habitat off the cost of Indonesia by a corrupt state-owned entity.   

I can see it doing well in the current environment, providing the whole western market system doesn't melt down over Ukraine.. It has the advantage of not being in the DRC! Could attract those muppets - sorry investors - too scared to invest in  Alphamin.   

Website: https://firsttin.com/

Pete, any thoughts on TUN: Tungsten West. I've done little to no research - just wondering if you'd heard much about them?

Polymetals is looking cheap just now 

[petejh]

Eurasia Mining and Polymetals both taken large dumps for obvious reasons. Yeah I’d say both are looking cheap although less cheap today than yesterday! - bargain hunters and day-traders out in force looking for dropportunities for a quick trade. Problem with thinking they look cheap now is that no one  knows what the future days and weeks hold - they may end up far cheaper! (and the world an even bleaker place), or the conflict may settle more or less where it is now and those sorts of stocks rebound from here.
I wouldn’t touch either, I’ve never trusted or liked the jurisdictions, and there far better less volatile opportunities out there that aren’t under Russian influence.

Related, decent framework overview of potential economic impacts, depending on severity of sanctions here:
https://www.bloomberg.com/news/features/2022-02-25/war-in-ukraine-how-the-ukraine-russia-conflict-could-impact-the-global-economy?cmpid=BBD022522_OEU&utm_medium=email&utm_source=newsletter&utm_term=220225&utm_campaign=openeurope

[petejh]

I haven’t taken any interest in Tungsten  West although I see it mentioned on the periphery of other stuff I’m reading.
Mark Thompson involved with them (same guy involved with Cornish, Merdian Mining and First Tin) worth a follow on Twitter.

[petejh]

I notice the US nitrogen fertiliser producers I mentioned a few weeks ago are on the move as a result a f the conflict. Belarus and Russia significant exporters to the US of potash and nitrogen fertilisers.. not anymore…
CF, MOS, UAN.

[Moo]

My buying a shed load of rubles hoping on the inevitable left vs right civil war in America has really backfired here.

[kelvin]

My buying a shed load of rubles hoping on the inevitable left vs right civil war in America has really backfired here.

Yeah - that's harsh. I hope the shed was small. 'Sensible' heads would always say buy gold but  who knows the future?

I've sat on my hands this last week, done nothing and managed to finish 8% up. I hardly know what I'm doing in the stock market, so doing nothing whilst the world goes to hell seemed sensible.
Then today Filo announced a PP of $100m and soared on opening, which along with a couple of other equities made for a good day.

[petejh]

Obviously I follow a bunch of people in tinnickelcopperland. One guy I follow closely is Mark Thompson, a director at Meridian Mining, Cornish Metals and a bunch of others in that sphere. Worth a follow if you're interested about investing in tin, copper and commodities in general.

There's an IPO coming to the LSE main market (not AIM). Marketing for it starts on Monday. Company is called First Tin. It has exploration projects ongoing in Germany plus a project in Aus. Like Cornish it could be another good one to get in early as the whole tin thesis - demand for 'green' tin instead of destructive Indonesian dredging, increase in demand from the energy transition and the move to put 'chips in everything', and the raging commodity price, - is beginning to get noticed by the crowd. It'll be interesting to see the marketing but from their website they're obviously heavily playing the ESG card for their 'environmentally sound' tin produced in Germany and processed in Europe. This is the way the market's going, more and more people want to feel reassured (somewhat belatedly..) that the raw materials in their car, phone, laptop and charging infrastructure weren't obtained by reliance on poverty-stricken teenagers dying in artisan Myanmar mines or via destroying marine habitat off the cost of Indonesia by a corrupt state-owned entity.   

I can see it doing well in the current environment, providing the whole western market system doesn't melt down over Ukraine.. It has the advantage of not being in the DRC! Could attract those muppets - sorry investors - too scared to invest in  Alphamin.   

Website: https://firsttin.com/

Pete, any thoughts on TUN: Tungsten West. I've done little to no research - just wondering if you'd heard much about them?

Polymetals is looking cheap just now 

Here's a snippet of news I noticed about Tungsten West for you (I'm not invested and don't follow them closely):

Tungsten West, the company aiming to bring the Hemerdon tungsten / tin mine in Devon back into production, has announced the signing of an EPCM (Engineering Procurement and Construction Management) contract with Fairport Engineering.
• The company says it has taken delivery of some of the key, long-lead time, equipment required to restart the operation, including X-ray sorters, and that “the rest of the long-lead items … [have been] … ordered and … [are] … scheduled for delivery within the Company's timetable”.
• Tungsten West explains that detailed engineering design work is well advanced and that it has filled key operating and project management posts required to restart the mine which is expected to become a major supplier of strategically significant tungsten concentrates in a market dominated by China, Vietnam and Russia.
• The mine is expected to produce 3.5m metric tonne units (mtu) of tungsten trioxide annually with 500tpa of tin in concentrate.
• Tungsten West explains that its BFS assumed commodity prices that are lower than those currently prevailing with an assumed price of the benchmark ammonium paratungstate (APT) of US$275/mtu “for the first year of operation, rising to $325 by year 5” compared to a current US$335-345/mtu and an assumed tin price of US$24,000/t compared to the current price of over US$45,000/t.
• Welcoming the appointment of Fairport Engineering, CEO, Max Denning, said that Taungsten West was looking forward to working with them “as we move towards restarting full production at Hemerdon, with a substantially improved processing route, through the introduction of XRT ore-sorting and upgraded processing equipment”.
• He added that “The Company has assembled a strong projects and operations team, and we remain confident in our progress”.
• Although tungsten was produced at Hemerdon during WWII, the recent development was originally undertaken by Wolf Minerals which went into liquidation in 2018 and the project was acquired from the liquidators by Tungsten West in 2019.  Tungsten West made its AIM debut in October 2021.


Polymetals expelled from the ftse. bye bye..

[petejh]

Some basic info from a research note, on fallout from Russia/Ukraine conflict.
(TLDR - various forms of fertilisers; copper, nickel and other industrial commodities; plus gold, all squeezed. Even more so than the original energy transition scenario. Energy transition now even more urgent than before due to shifting balance of powers, on top of climate goals)


After Ukraine – where do we go from here?
• Scenario A (unlikely) – Russia wins, Ukraine surrenders, peace is restored, Putin threatens Baltic states. Sanctions maintained but undermined by China. Germany imports US LNG. o NATO bolsters Baltic states of Latvia, Estonia and Lithuania - WWIII looks increasingly likely. o Ukraine is sanctioned as a part of Russia disrupting flows of iron ore, titanium, ammonium nitrate, grain and other raw materials into the West o Putin cements hold on other FSU states including Kazakhstan, Kyrgyzstan and Uzbekistan which hosts US and Russian air bases. o Russian government employs PR agency to restore public image. o Generals continue to support Putin. NATO increases spending on armaments. 

• Scenario B – Russia wins but suffers heavy casualties, Ukraine surrenders, peace is restored under Russian rule, Putin stops at Ukraine. Sanctions undermined by China.
o Heavy casualties may cause Putin to reconsider his long-planned desire to restore the FSU and recreate the USSR. o Russian population show unrest. Dissidents are arrested in greater numbers. o Generals continue to support Putin. NATO increases spending on armaments. o $15bn/day est. cost of war drains Russian economy 

• Scenario C (likely) – Russia wins, controls Kiev, take huge casualties as fighting continues – possibly for years. Putin stops at Ukraine. Sanctions maintained but undermined by China o Sanctions are toughened. More anti-tank missiles and anti-air missiles are sent to Ukraine forces. o Russian army is increasingly humiliated – Cost of war cripples economy – Just like Russia’s war with Afghanistan - Russia enters recession o Dissidents in Russia find support on reports of rising Russian casualties. o Generals increasingly unhappy with Putin.

• Scenario D – Russia is not able to gain control of Kiev, fighting continues, Russian held back by street fighting, horrendous civilian casualties as Kiev is flattened. Sanctions maintained,   o Russian army is humiliated as casualties rise on both sides.  o Civilian deaths and atrocities cement the West against Russia. Germany looks to stop buying Russian gas. China continues to ask for peace. o Russian generals turn against Putin for humiliating Russia and leading an unpopular costly campaign, creating regime change. 

• We do not wish to promote any particular scenario. The Ukraine army lacks munitions and only had 20 Turkish drones to start with. Russia’s slow-moving column has suffered few attacks and is preparing to move on Kiev. 
• Much will depend on how fast new munitions and drones can be delivered to Ukrainian soldiers close to the front line.  • If Putin had not threatened the West with nuclear retaliation this war would have been over before it had begun.
• The EU may allow Turkey, a NATO member, into the EU 

Conclusion:  The situation will likely turbo-charge West’s move away from oil and gas towards renewables and electric vehicles. Wind farm, solar and utility-scale battery storage programs will accelerate driving demand yet higher for related metals. Germany is to keep its Nuclear power stations running for longer as Green party drops its opposition to nuclear High oil and gas prices will simply persuade more companies and consumers to invest in alternative energy supplies as oil and gas are increasingly associated with atrocities and war within Europe.

Russia – S&P, Fitch downgrade Russian debt to junk status, while Moody’s review
• Two out of the three top rating agencies have cut Russia’s debt to “junk” status following the invasion of Ukraine.  • Fitch downgraded Russia to B from BBB, which is five notches below investment grade, and placed the country on negative watch.
• S&P cut Russia’s rating from BBB- to BB+ - stripping Russia of its investment grade standing.   FTSE100 changes - Polymetal and Evraz have been ejected from the FTSE100 o Endeavour Mining and Howden Joinery have replaced Polymetal and Evraz in the FTSE 100. 

Germany – Back of envelope gas payments by Germany to Russia
• In 2020-21, Germany imported c.150bcm of gas (ref Nord2 would add 55bcm/year)
• Total gas exports outside the former Soviet Union were 185bcm, incl 10bcm exported to China,
• Gazprom is basing its 2022 budget on what it calls a “conservative” export price of $296 per 1,000 cubic meters • German supply showed that in December 2021 Russian pipeline gas accounted for 32%, Norwegian gas 20% and Dutch 12%, with storage 22%
• Assuming Germany buys 40-50% (60-75bcm) of its gas from Russia @ $330/mcm (c.$8/mmBtu) this works out at $20-25bn/year or $55-70m/day Conclusion: Between variable gas prices and volumes, we’re probably talking in the range of $50-$100m per day  Russia – Oil export flows, according to the media, have fallen by ~1/3rd (2.5mmb/d) this week as a result of Western sanctions, together with buyers reluctant to assume the risk in taking Russian cargoes. 
• Russia normally exports 4.7 million b/d of crude and 2.8 million b/d of products, according to government data.

 Copper jumps as traders consider limited supply availability
• Copper prices rallied to $10,438/t before retreating to $10,370/t, the highest since October.
• Warehouse inventories in China have been rising slowly but global warehouse stocks hit 200kt in Feb., enough for 3 days of global consumption. 
• Analysts are noting slowing metals flows from Russia as shipping companies limit freight and traders are unable to finance Russian trade.
• St. Petersburg port is a major facilitator of seaborne copper trade.
• The wider implications of Chile’s depleting copper supplies are also causing prices to rise, with production down 7.5% in 2021. 

 Thermal coal continues to soar on Russia-disrupted supply concerns
• Benchmark Asia thermal coal price up 46%. • Newcastle thermal coal up $140/t to $446/t yesterday.
• With oil moving over $110/bbl owing to Russia’s dominance of supply in Europe, traders are looking to shore up alternatives.
• Russia also accounts for 17% of global thermal coal exports, with indirect sanctions and closed shipping lines expected to limit its availability to the global market. 
• The disruption adds to an already tight thermal-coal market, with Covid-related labour shortages in China and Mongolia adding to export disruption for major producer Indonesia. 
 
 Aluminium and nickel push through decade-highs as Russia supply concerns mount
• Aluminium hit another all-time-high today at $3,691/t. • Nickel up 6.1% to $27,470/t, its highest since April 2011.
• Norislk produces 17% of global Class-1 nickel supply, used for battery production.
• Maersk, the primary shipper for Rusal’s aluminium cargoes, suspended Russia-related operations, adding an additional catalyst to the price momentum.
• Aluminium inventories have halved in LME warehouses yoy to 809kt. 

 Gold consolidates gains as Treasury yields inch up on Fed rate hike expectations
• Gold has settled around the $1,930/oz mark having climbed to $1,947/oz yesterday.
• The metal shrugged off a 16bp rise in US 10-year Treasury yields.
• Gold global ETF physical holdings climbed higher to 101.2moz.

[Moo]

I was joking you profiteering scumbags.

[AJM]

Greatland (GGP) released a resource update today. Assume a bunch of it must have already been priced in, because the shares didn't move anywhere near as much as the size of the resource estimate

https://polaris.brighterir.com/public/greatland_gold/news/rns/story/xo783mr

[petejh]

Yep it's some nice manoeuvring from GGP to release the upgrade independently of Newcrest. Lots going on in background with the valuation of Newcrest's final 5% option.

I sold most of my GGP in the low 30s and high 20s for massive gains but retain 1.4million shares bought at 1.5p. I'll be selling those remaining shares when they float back up to the low 20s sometime over the next year or two as Havieron approaches production. Loads of lunatics on the chat forums think GGP is worth multiple billions / 50p+, without considering they'll only own 25% of whatever is eventually proven and a valuation of that sort would give them the highest valuation on a per-oz basis maybe ever. No doubt an amazing asset and a decent enough investment in the low teens. But there are far better investments out there now. It rose too far too fast (to my great benefit) and trapped loads of people on the way up in the hype. Never seen a group of investors like it, literally financial lemmings.

Now the resource growth and progressively greater clarity each drill update on likelihood for bulk mining of the breccias mean the asset is slowly catching up to the crazy high valuation - hence not loads of reaction to 50% increases in reserve. Luckily the resource is obviously good enough that, over a few more years, it should justify a higher price eventually.

Fair value around low-mid 20s, increasing to low 30s once into production and with some good resource expansion outside of Havieron. Which is what I worked out two years ago with a DCF based on 20m ozs.   

Wildcard development would be buy-out but still wouldn't command more than mid-high 20s at this time imo.

[AJM]

I've never looked at any of the forum chatter, so dipping my toe in the water today out of curiousity was something of an eye opener - like you say, a pretty intense bunch! A lot of paranoia about shorters, price manipulation and all sorts of excitement, plus lots and lots on that magic 5% and all that. An entertaining lunchtime diversion, regardless!

[petejh]

It's a place of true lunacy and tin foil hat-wearers. I stay away. I used to post the odd thing every few months to try to inject some reality (as I felt bad about people being deceived by pumpers) but you just end up getting labelled a member of massive conspiracy of short-sellers or some other 'anti-true faith'. It's nuts. Pretty much the opposite of how to deal with emotions in investing.

[kelvin]

Pete, any thoughts on TUN: Tungsten West. I've done little to no research - just wondering if you'd heard much about them?

I put 1% of my portfolio into TUN a couple of days ago, into my ISA and I'll add to this once the new tax year starts.
Third largest tungsten resource in the world and there's also a little tin.

[petejh]

Obviously it's virtually unprecedented times in markets. If anyone reading this thread hasn't been through a bear market before and is invested in a generalist spread of companies, or god forbid low-quality/long duration tech at high multiples - now is probably not a good time to be trying to time market dips or chasing attractive things that you haven't researched, unless you thrill at playing roulette with your money. There are a lot of commodity peacocks in the market right now that look attractive but risk being bull-traps for the unwary.   

The announcement this afternoon of US/UK dialling in a ban of Russian oil over the next few months was the thing I've been waiting and wondering about. It's the nuclear option, perhaps nuclear with a small 'n' but we'll see what the rest of Europe does. The scale of change potentially about to unfold in world markets is hard to grasp. Before the announcement of the ban, the oil and coal sector was already looking like a popular rotation for people trying to protect against losses. Now...

Overall the commodities thesis I began investing into 2017/18 is unaltered and stronger now than ever. Couldn't be more of a contrast to the overall markets. It amazes me more people didn't see the value in tin, copper, nickel and others commods much earlier.

To back up the base metals thesis, gold is now doing what gold does in times like this by providing a safe haven. The major gold producers' margins are leveraged by any rise in gold price and so are now printing money. The ones with the lowest costs are doing the best. Even some of the useless shitco gold/silver junior producers will probably fly on the coat-tails of the majors but I wouldn't touch them with a bargepole. Now's the time for large, solid, good-quality profitable and low-cost companies producing real 'stuff'.

I sold any remaining unprofitable tech companies last week - Trackwise and Illika -  for large % losses, and moved into a short term position (months to one-year tops) on coal, US oil producers and US fertiliser producers. Also sold all my remaining Meridian Mining into strength for a 90% gain to buy coal/ferts/oil. Along with a short-term trade in NGEX for a 60% gain on a hunch that sentiment and money would flow into it off the back of Filo, it did, I sold.
The oil/coal/ferts is a popular rotation currently and prices are going parabolic as money moves over. If trying to chase things at the moment you're almost guaranteed to get spiked with the current price action, so anyone considering it better be confident you know what you're getting into, why you're getting into it, and how to spot momentum weakening on technical indicators so you know when its time to leave a rising market (which could already be very soon). It's a good time for short hedges!
A thesis for coal and oil - over and above the obvious supply shock - is that there's a distinct possibility that these sectors which have been slaughtered by ESG rules meaning funds had to divest and thus their price multiple being slashed, will re-rate their price multiple to EBITDA (in the US at least). That's on top of them printing huge profits while the world figures out how to hopefully now transition away even more quickly from oil/gas and coal. 
Some of the current insane commodity rises e.g. Nickel aren't sustainable (it was Chinese Nickel producer Tsingshan being forced to cover a reportedly $5-6bn short position that squeezed Nickel yesterday and today). In general I'm expecting commodities to pull back at some point this year, as parts of the west almost certainly go into recession and demand destruction takes effect on 'stuff'. There's a very good fundamental reason why tin will remain more detached from the usual cycle of demand destruction than most other commodities, although tin will probably also fall back from recent highs eventually as it's spiked like everything else. (The reason btw is because it makes up one-tenth of a fuck-all of the input cost of everything it goes into, so can continue to rise by large amounts while other commods that make up a higher proportion of input cost - like copper - can't. Also because compared to other commods there's even more of a long-term supply scarcity of tin, in the face of long-term rise in demand due to everything the world's trying to achieve in the next 10-20 years). Copper probably won't stay elevated for very long in the short term unless wallstreetbet types get a hold of it, but more likely they'll do that with their favorite hype-metal silver when it starts rising.

In short it's a good time to either know your investment sectors very well and have been in early enough that you can sell into any ridiculous parabolic rises, or ignore markets for now and focus on other things. At least everyone with company pensions will be monthly averaging into the lows of markets, good time to be young and investing regular sums with 20-30 years economic growth ahead following the coming dip.

As per the last few years I'm still long high-quality, low-cost major producers or high-quality advanced-stage developers of energy transition metals:
tin (MLX,AFM)
nickel (CTM)
copper (Filo),

And gold: (Agnico - formerly Kirkland Lake, and GGP)

in addition to 5 new positions in major US/Canadian producers of:
oil
coal
fertiliser
royalty companies with exposure to Potash mines
* I'm not mentioning individual companies as I think it's such a volatile market with people speculating on these themes, that makes it a high risk approach and people should do their own research if choosing this approach.

Cash also making up a big chunk.

As far as any riskier stuff, the only things I still hold on to are GMG as my only battery/tech investment - its a strong long-term conviction investment and 3% of my PF. And two junior explorers for a binary yes/no trade on first discovery hole results due within the next month: Zacapa bought @ 0.59 - potential here for a large porphyry hit which would absolutely rocket this company - only 1% of my portfolio. And Artemis bought @ 0.70 - similar story to ZACA but less massive upside and lower quality management, again 1% of PF. Not a time to be bothering with any new high-risk investments.

[kelvin]

Yeah - I'm currently full of covid so have nothing better to do than ponder the of the world.

Sold nearly all my tech in the last 9 days, just left a few small positions in things I think have legs. Took some big losses in a couple but that's all part of the learning curve and there were also decent profits. Pantheon Resources was over 60% in a few weeks.
Haven't reduced Alphamin (my partner added more this week) and Filo remains my biggest holding at 40% of my PF. I'm starting to feel I need to trim some profits from it however.
I also am in ZACA, bought in at 60c and Artemis @ 0.8c.
Cycled some of the money from the sales into Corsa Coal amongst others, all with a stoploss once profits hit 25% I also placed some funds in silver explorers and miners this last few weeks, all doing well. Definitely buyer beware in the current climate.

Other than that, I've increased cash to 20% of PF, it seems prudent. To

[JohnM]

Yeah - I'm currently full of covid so have nothing better to do than ponder the of the world.

Sold nearly all my tech in the last 9 days, just left a few small positions in things I think have legs. Took some big losses in a couple but that's all part of the learning curve and there were also decent profits. Pantheon Resources was over 60% in a few weeks.
Haven't reduced Alphamin (my partner added more this week) and Filo remains my biggest holding at 40% of my PF. I'm starting to feel I need to trim some profits from it however.
I also am in ZACA, bought in at 60c and Artemis @ 0.8c.
Cycled some of the money from the sales into Corsa Coal amongst others, all with a stoploss once profits hit 25% I also placed some funds in silver explorers and miners this last few weeks, all doing well. Definitely buyer beware in the current climate.

Other than that, I've increased cash to 20% of PF, it seems prudent. To

Can I ask why you took big losses on some of your tech stocks? Do you believe they will never come back or just won't come back in the time period you are willing to be in the market?

[petejh]

I can't answer for Kelvin obvs, but my reasons for getting rid of my (very few) tech shares for a loss are along the lines of:

I already won the game (and continue to keep winning it  ). With a longish term (3+ years now) conviction trade in a gold explorer, various very successful short-term trades in various resource companies, and with my long term conviction trades in tin, copper and nickel miners/developers. I call them 'conviction trades' as in I've had to hold through numerous 20 - 50% drops in price of various of those companies along the way to large gains.. that's the nature of these sectors.

..therefore I don't 'need' - as in it makes zero difference to my life - any potential gains (or to avoid any losses) by holding onto the very few tech losers in my PF until a time that they've recovered from the current market sentiment - which I believe could be some time.
I believe I see a better opportunity to more quickly recoup some of the losses incurred on those two tech shares, by putting it into an oil/ferts/coal investment which I believe has a higher probability over the next 12 months of doing better than if I'd left the cash in the two tech shares.
If this investment also failed, then it really doesn't matter to my overall position because the massive majority by % of my PF is in other things that have won big over time and continue to win.

But say it was a different world, where I didn't have a commodities focus and I'd invested heavily in overvalued tech shares over the last few years, and I was reliant on that capital growing (or not losing the capital at least), then I'd not be selling those losers right now at a time of significant weakness and I'd not be thinking it was a smart move for anyone who did. I'd be letting them sit there gathering dust in my PF until their time in the sun came again (or they went to zero in the nuclear winter..). It's rarely a smart idea to tinker with the core thesis in your portfolio - that's the classic mistake that most private investors make to change things too early. The best performing portfolios are those of dead investors etc.

So it comes down to what are the core investments, is the thesis still valid, and what's on the periphery that doesn't alter your overall wealth if you tinker/change, what short-term opportunities are there due to changing circumstances.

I should also say that I *still* wouldn't be doing the oil/coal/ferts trade if Russia hadn't invaded Ukraine, I'd just be leaving the two tech losers to gather dust and hopefully recoup one day. The world changed in the last three weeks like we haven't begun to understand and most (including the markets) didn't foresee the scale of the change (although I have to say I was aware of the ferts trade idea as early as last December from listening to some good eggs).

[kelvin]

Can I ask why you took big losses on some of your tech stocks? Do you believe they will never come back or just won't come back in the time period you are willing to be in the market?

I'm sure they'll come back at some point in the mid to long term but I honestly felt that I could use the money in the meantime to make profit elsewhere.
I will start to buy in monthly, the same tech, when I think they're near the bottom.

It's worked this last week - I'm 10% up on the portfolio (despite silver dropping) and on the tech cash I took, I was up 35%. So well worth making the effort to chop things about.

[kelvin]

Also, and this is much like Pete's initial reply - I've sorta already won or perhaps that should be, I'm happy with what I already have.
I have a couple of rental properties, zero debt and I guess I pretty much semi-retired at 50. I also know how to,
and often do, eek along on not much money.
So taking a big loss on those tech shares didn't seem to be so difficult, not in the grand scheme of things. The early 90s recession cost me so much more.

I also think that all the crazy swings in commodities since I started in July has finally numbed me a little, it's taken the emotion out of stocks a bit. I've had a down of almost 40% in a day, on one stock. The same can be said for ups. It's crazy, it's not for everyone but it's definitely made selling at a loss easier for me.

I started investing because my money was just sitting in the bank doing nothing. It was annoying after a while and those tech stocks would have been doing the same thing. Hopefully, the new shares will keep growing.

[petejh]

Can I ask why you took big losses on some of your tech stocks? Do you believe they will never come back or just won't come back in the time period you are willing to be in the market?

BTW I'm basing my thinking about the broad outlook for markets on the matrix below, among other sources. It was released by Bloomberg on the first day of Russia’s invasion. I thought I’d posted it here a couple of weeks ago but it turns out I didn’t.
Clearly we’re in risk off, my assumption is a recession in Europe is coming in second half of 2022. This coming not long after the recent top for many well-known long-duration tech companies; the supply & demand shock of Covid; and the already strong rise in commodity prices resulting from Covid shock and big-money positioning around the whole energy transition process. Even following the recent correction much of the growth sector still has sky-high multiples.

Then either the world moves onward/upward, or worse-case it doesn't and we go into the dreaded stagflation with high inflation killing consumer demand and no growth in the economy. But it may all turn out rosy.

In the first, a swift end to fighting prevents a further upward spiral in commodity markets, keeping U.S. and European economic recoveries just about on track. Central bankers would have to tweak their plans, not scrap them.

In the second scenario, a prolonged conflict, tougher Western response and disruptions to Russia's oil and gas exports would deliver a bigger energy shock and a major blow to global markets. That would likely take ECB rate hikes off the table this year, while Fed tightening would slow down.

A worst-case outcome would see Europe’s gas supply cut off, triggering a recession, while the U.S. would see significantly tighter financial conditions, a bigger hit to growth, and a markedly more dovish Fed.

Wars are inherently unpredictable, and the actual outcome is likely to be messier than any of these stylized versions. Wild swings in financial markets Thursday illustrated the uncertainty. Still, the scenarios should help frame thinking about possible paths ahead.

https://www.bloomberg.com/news/features/2022-02-25/war-in-ukraine-how-the-ukraine-russia-conflict-could-impact-the-global-economy

[seankenny]

do you have any links to introductions to equity valuation, or any interesting papers?

[petejh]

What type of companies are you interested in Sean? I can point you to overviews of methods of equity valuation, but it depends on the specific sector as to how to apply the different methods. For mining companies I use a DCF* for developers and producers, along with peer comparison valuation methods such as EV per resource or EV per reserve oz. While for explorers I'd mostly use in-ground EV/per oz. But these methods aren't relevant for, for instance, retail companies (DCF is relevant, but the inputs for the DCF would be different to the inputs for an oil company for e.g.).


There are various sources online for learning the basics of valuation. Investopedia is always good for an overview and usually has links to explore:
https://www.investopedia.com/terms/v/valuation.asp#:~:text=Valuation%20is%20a%20quantitative%20process%20of%20determining%20the,valuation%E2%80%94each%20of%20which%20may%20produce%20a%20different%20value.

Also various online sources that offer courses (I'd never pay for this stuff) but also give out free info:
Basics
https://corporatefinanceinstitute.com/resources/knowledge/valuation/valuation-methods/

Mining specific
https://corporatefinanceinstitute.com/course/mining-industry-financial-model-valuation/

I learnt how to create a DCF from a couple of people through an investors group I used to be a member of. One a pensions fund manger and the other a researcher. Once you have the template it's fairly straightforward. Knowing the value of the inputs and how realistic the assumptions are is the difficult part, and how sensitive to change of any inputs the overall valuation is. There comes a point where you realise even the best DCF is very fuzzy.

Ultimately trading successfully in specific shares is a mix of a science and an art. Because a significant part of a company's share price is affected by investor sentiment and other intangibles to do with humans not being entirely rational. There's overshoot and undershoot which is where you find the best gains. Scientific valuation methods do an imperfect job of capturing this side of the game, but valuation should be the underlying foundation to work from imo. (most pi's don't bother and just take a punt on gossip).


*  A spreadsheet showing the net present value of future cash flows discounted to the present day.

[petejh]

Hope people took or are taking their profits in Cornish Metals. Today's funding news with 1-to-1 warrants @27p within 3 years puts a cap on price growth imo. Might be a good trade at 18p if you can get shares in the offer.

My opinion on the economics of South Crofty haven't changed. Money pit.


https://www.ft.com/content/a6543314-dfc8-40fb-af2f-0538fadac851

[petejh]

Alphamin just released the expected update to its resource estimate for the Mpana South portion of its tin mine.

Any investors here who've done their homework will be aware that Mpana North currently produces 4% of the world's tin and gave EBITDA for year-ended 2021 of $200m @ an average tin sale price of $30,600. The final quarter of 2021 saw an average tin sale price of $38,000 and $75m in that quarter alone.

Forward estimates for financial year 2022 are EBITDA of $300m+ (conservative estimate), at an average tin price of $38,500. Current tin price, $43,000.

Alphamin are already undervalued based just on production from Mpana North, and have been steadily grinding higher as I've no doubt been boring people by pointing out. This updated resource estimate and confirmation of decision to mine the South (which is directly adjacent to the existing mine and can be accessed using existing infrastructure) has just increased Alphamin's likely forward earnings estimate within the next 19 months by another 65%.

The Mpana South updated resource estimates annual production of 7,200 tons by year-end 2023  (Mpana North annual production = 11,000 tons, increasing to 12 - 13,000 in 2022), for an EBITDA of $187m at $40,000 tin price. The capex required to build MS will be less than a year's earnings and will come from cash reserves - Alphamin have zero debt and paid investors a dividend in January.

2023-24 annual tin production estimate of 20,000 tons, or 6.6% of global supply.

Those reading the update will note the intention for continued regular resource updates throughout the year.

Simply one of the best available value and growth shares combined*, as I've been noting for well over a year. This will either go to $1.50 - $2 or get halted and bought out at a premium to market price, imo.

The tin thesis is also propelling MLX steadily higher, if people want a lower risk jurisdiction than the DRC. Risk on the horizon for AFM is that higher fertiliser prices leading to food shortages in the second half of 2022 will impact African countries hardest. 


* CVR Partners (UAN) another one.