On December 19, the British Columbia Securities Commission issued a press release titled “Securities regulator alleges fraud against Silvercorp short-seller” that links to a notice of hearing. In my opinion, the notice of hearing unfairly smears Jon Richard Carnes of Alfred Little. Secondly, I believe that the claims against him are extremely weak.
Long: LMCA
Short: JKS, CSIQ, SPWR, ZU, PCYO, EBIX (puts and common), AMT puts, TTS, YONG puts, AVID
Closed: KWG*, short NUS.TO, short BBRY, short CREE, short TLT
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.
As I’ve discussed previously on this blog, there are many challenges to short selling (see “Do I recommend short selling common stock? No!“). These problems get worse as more and more short sellers pile into the same stocks.
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.)
If you can short New Zealand Alternative Market (NZAX) stocks, you should probably look into this company.
This (long) post details my thinking on how I currently approach the industry.
