Nowadays when I look at a stock, I ask myself:
- If the company was legitimate, what would it be doing?
- If the company was a scam, what would it be doing?
Advertisements
mining
Pretium: The bullshit engineering continues
Today, Pretium issued a press release: Pretium Resources Inc.: Mineral Resource Estimate Adds Measured Gold Resources, Increases Grade at Valley of the Kings
Basically, Snowden is pretty much going to stick with its aggressive approach in modeling the VOK deposit.
The press release also contains some information aimed at invalidating Strathcona’s competing theory about how the resource should be modeled.
Betting on a Potashpocalypse
I’m attracted to cheap options and this is the main reason why I am long Potash Corporation of Saskatchewan (POT) put options. The LEAP puts are trading with implied volatility in the mid 20s. Potash pricing could collapse due to (A) a wave of excess capacity coming online and/or (B) the potash cartel breaking down. While I have no special insight into whether or not this will happen, the expected return on this trade should be positive as long as the chance of a decline is high enough.
(This is not a high conviction trade for me.)
Chatham Rock Phosphate
If you can short New Zealand Alternative Market (NZAX) stocks, you should probably look into this company.
My current thinking on mining stocks (Dec 2013)
This (long) post details my thinking on how I currently approach the industry.
Corporate waste at Baja Mining
Baja Mining has beautiful headquarters. Check out the website of the company that helped decorate it:
This is the kind of nonsense that goes on in the junior mining world.
Baja Mining is currently a penny stock. Its shares literally trade for a penny.
*Disclosure: No position.
Why would anybody want to invest in independent oil and gas?
The current situation doesn’t make a lot of sense to me. The management teams at these companies don’t give investors enough information to value the assets. I think that investors would demand such information. They should know the historical and projected decline curves of their company’s assets (for each basin the wells are in). This is very basic information that investors need to perform their due diligence.
Another way of looking at it is to examine how a private market buyer would perform due diligence. When an oil and gas company wants to sell its assets to private market buyers, it typically opens a data room. I’m sure they provide a large volume of technical data far beyond decline curve data (e.g. reservoir models, data on porosity, pressure, 3-D seismic, etc. etc.). Institutional investors and analysts simply don’t perform that level of due diligence.
