Portfolio Update: Adding to My Best Ideas (November 14, 2016)

by FI Fighter on November 15, 2016

in Precious Metals Updates, Uranium Updates

gold-stock-buys

Total massacre in the precious metals mining stocks… I know what you’re probably thinking, “FI Fighter, you’ve been spewing that same nonsense this entire week and most of last week as well… You sound like a broken record right now, a modern day Chicken Little who I’m getting close to tuning out completely…

Be that as it may, but what would you expect me to say when the spot price of gold is down over $100/oz in less than a week’s time?!?

screen-shot-2016-11-15-at-3-27-40-pm

From an election fear-induced high of $1,332/oz all the way back down to where we are now, challenging the $1,200/oz support levels…

Holy fack!

If you think all this volatility is just “business as usual”, well, good for you, keep on doing your own thang… As for myself, shoot, I’m jacked up and more tuned into the markets than perhaps ever before…

Quite frankly, this is starting to feel like late 2015 all over again, a time when precious metals mining stocks were selling off and only a few diehards wanted anything to do with them…

Naturally, I did then, and I sure as hell do now!

By the number of comments and messages I have received recently, no question, I am not alone right now, and there are plenty of folks who are eager to “back up the truck” and load up on high quality merchandise selling off at bargain basement prices…

When cheap becomes stupid cheap (and you’ve got an iron stomach and huge appetite for risks), how can you not be interested in buying?!?

Observe the DESTRUCTION some of my favorite mining stocks have experienced in the last three months!

axu_gqc-v_ssp-v_org-v_swa-v_aan-v_chart

To me, it is absolutely nonsensical to only be interested in purchasing these stocks when the spot price of gold and silver are surging and everyone and their grandma is bidding up these shares into outer space…

How can you extract insane alpha when EVERYONE is out chasing after the same investments? On the flipside, when Big Money, institutions, retail, etc. are all abandoning ship, that’s when the opportunistic investor/speculator does their best work.

And although I could be completely wrong, I’m telling you, all the chaos and turmoil that’s going on right now makes buying up these stocks feel a lot like it did during the end of 2015…

Perhaps we still have another MASSIVE leg down before we reach final capitulation (January 19), but once again, c’mon, how can you tell me that the above chart showing all that devastation doesn’t appeal to you at all (Well, I suppose it won’t interest you in the least bit if you’re one of dem hardcore-to-the-bitter-end Buy and Hold Forever types…)?!?

Please note — When a stock drops by -50%, it must rise by 100% just to get back to where it started from… So, by buying up shares now, you’re damn right I’m expecting to score some multi-baggers over the medium/long-term…

If the risk vs. reward curve wasn’t so spectacular right now, I wouldn’t be doing basically everything that I can to snatch up these stocks!

Case in point, I continued my wheelings and dealings, making the following moves:

 

  • Sold 7,900 shares of Energy Fuels (UUUU) @ $1.40/share
  • Bought 4,000 shares of Alexco Resource (AXU) @ $1.32/share
  • Bought 31,000 shares of GoldQuest Mining (GDQMF) @ $0.18/share (total cost basis)
  • Bought 19,500 shares of Sandspring Resources (SSPXF) @ $0.281/share (total cost basis)

 

I closed out my entire position in Energy Fuels (UUUU), and now own ZERO uranium stocks… I still like the uranium sector and think that it will turn sharply in the more POSITIVE direction in the future, but there’s just no way I could hold onto these shares and stand idly by, watching this wonderful buying opportunity in precious metals mining stocks pass me by…

Buying and selling frequently, entering and exiting out of positions, is anathema to the Buy and Hold Forever narrative, so no doubt many loyal disciples of that school of thinking (and my most vocal haters!) will look at what I’m doing here and shake their heads in disagreement (and perhaps even with distain)…

Hey, I never claimed to be a 100% loyal subscriber to Buy and Hold Forever! And when I see the following chart below, yeah, I’m going to take action and make some changes to my portfolio!

uuuu_gqc-v_ssp-v_chart

UUUU is down only a modest -2.48% in the last month, while GQC.V is down -27.5%, and SSP.V is down -33.9%!

No way dude, I ain’t passing up this chance to swap from one position and into another… It’s just not gonna happen…

So, I did what I thought I had to do… In the process, I booked a realized loss of -$1,665.19 by closing out my position in UUUU.

You win some, and you lose some… Just gotta roll with the punches and take these hits in stride… To be brutally honest with readers, though, I’m actually feeling a whole lot better with the swap… As much as I like uranium, I am far, far, far more bullish on the future of precious metals… And call it gut instincts or whatever, but I do believe that the precious metals sector will shoot up vertically before uranium begins its inevitable (but not imminent) bull run…

Of course, I could be 1,000% wrong, but this is just where my mindset is right now… Hopefully, this gives readers clarity as to why I’m doing some of the things that I’m doing…

Anyway, I now own 19,000 shares of Alexco Resource (AXU) in total. Further, my position in GoldQuest Mining (GQC.V/GDQMF) now sits at 110,000 shares total (between GQC.V and GDQMF). With Sandspring Resources (SSP.V/SSPXF), I’m presently topped out at 96,500 shares (SSPXF).

With Alexco Resource, no, this stock wasn’t on my latest watchlist, but then again, as everyone well knows, markets are super fluid and dynamic… As such, who knew that shares of AXU would open the day down over -15%?!?

When I saw that, I was literally screaming to myself, “Holy shit, bro, you’d better act fast and snatch up some shares! Firesale! Firesale!

So, I did…

Similarly, at one point, shares of GQC.V sold off -28%, with shares plummeting all the way south to C$0.20/share

WOWZA!!!

When I saw that, for realz, I had strong flashbacks of January 19…

It was a breathtaking thing to see…

Unfortunately, by the time I got connected with my broker, the rally had started, and so I settled for picking up shares of GDQMF for $0.18/share (~C$0.241/share).

Sandspring Resources didn’t experience the same type of volatility as Alexco Resource and GoldQuest Mining, but I had been wanting to add a lot more shares of this name to reduce my cost basis and thought that below C$0.40/share provided an excellent buying opportunity to do so. I got filled at $0.281/share (~C$0.38/share) for SSPXF, so I took that as a win…

Hey, you can’t time market tops and bottoms perfectly… If I can pick up the goods at some extremely favorable prices, I do so and don’t sweat the technique…

Anyway, that’s all for one day… And who knows, perhaps this “party” is just getting started and the next big shoe to drop is just around the corner…

The entire world seemingly hates precious metals again, which is just fine with me… I kinda did want another opportunity to add some more cheap shares, and well, most everyone now wants to toss their gold and silver mining stocks back into the trash can again, so there you go…

Here’s my revised list of favorite ideas.

screen-shot-2016-11-15-at-3-34-54-pm

Same names as last time, with the addition of Alicanto Minerals (AQI.AX), which looks greatly oversold to me at this point. The company didn’t deliver big-time hits on the first drill program on their Arikaka project (joint ventured with Barrick Gold (ABX)), so not surprisingly (I guess), many retail investors decided to abandon ship…

I’m a very patient guy (when it comes to investing), and think that the current valuation of AQI.AX is extremely appealing… ~A$16 million might one day look like a “bargain and a half” to pay for the massive upside potential that could be unlocked in the future with this exciting early-stage exploration story… Granted, Alicanto Minerals, along with Northern Shield Resources (NRN.V) are what I would consider to be the two riskiest holdings in my entire portfolio, and thus I refer to them collectively as my “lottery tickets”…

With that said, both stocks have sold off in the heat of this mess, so for anyone with an insane appetite for risk, well, these names might be worth adding to your watchlist… If I had a ton of surplus funds right now, I would add more shares of AQI.AX, without question… I was never expecting the company to hit a homerun on their first drill program… However, Alicanto Minerals does control a massive land package! So, it will no doubt take a lot of time, patience, and methodical drilling before a major new (economical) discovery can be made…

If you can’t accept that, don’t invest…

It’s as simple as that…

I’m currently down -40% and over A$13,000 on my position in AQI.AX… And I ain’t trippin the least bit.

 

Anyway, the deals are out there (and screaming for attention) for anyone who is willing to look…

 

When gold and silver were soaring this past summer, retail investors were rushing in line to buy up a storm… Now that the sector is coming down and on the verge of collapsing altogether, these same folks have no interest in buying…

 

Don’t you just love human psychology?

 

I can’t time markets for shit, so my own strategy is to buy in tranches… Nibble a little here, a lot more there if prices drop further, etc…

 

Next time around, if this madness continues, I might have to start offloading some lithium shares to buy more precious metals mining stocks…

Not the focal point of discussion in this article, but that’s a good reminder as to the importance of hedging! Don’t put all your eggs in one basket! With gold and silver acting like sinking ships, I’ll confess that I am quite glad that I also own a good amount of lithium, graphite, cobalt, etc… This time around, it proved to be quite useful to have been holding uranium shares (who would have thunk it?)!

In conclusion, yesterday was about as fun a day as any that I’ve had as an active buyer in a long, long time!

 

Fight On!

{ 14 comments… read them below or add one }

1 AlexNo Gravatar November 15, 2016 at 10:05 am

Seems like as of today the buys are already paying off a bit let’s hope this is start of the next leg up !

Reply

2 FI FighterNo Gravatar November 29, 2016 at 1:30 am

Alex,

I hope so! It’s been a terrible month for precious metals so far…

Happy Hunting!

Reply

3 BowmanNo Gravatar November 15, 2016 at 2:25 pm

Appreciate the posts on precious metals mining companies. You have given me a lot good ideas and insight. Keep up the good work!

Reply

4 FI FighterNo Gravatar November 29, 2016 at 1:31 am

Bowman,

Thanks for the support! Glad you are enjoying the posts and thoughts on mining stocks.

Cheers!

Reply

5 AlexNo Gravatar November 15, 2016 at 2:41 pm

Another question when do you plan on exiting the metals in guessing when everyone starts to pile in ?

Reply

6 FI FighterNo Gravatar November 29, 2016 at 1:31 am

Alex,

Yup, that’s the plan! I’ll be watching things like HUI/Gold ratio, DOW/Gold ratio, Silver/Gold ratio, etc… When I think we are back to historical norms or slightly on the overvalued side, I will consider the trade done and over with.

Best wishes!

Reply

7 JCNo Gravatar November 15, 2016 at 4:33 pm

SSPXF shares bounced back up quick. I was able to buy a small tranch at usd .247. I trimmed ALTAF and UUUU to get some extra funds for the next dip.

Reply

8 FI FighterNo Gravatar November 29, 2016 at 1:32 am

JC,

Congrats on the SSPXF buy! I really like that stock a lot, especially to ride a bull market up… Hopefully the trend up resumes soon enough.

Best wishes!

Reply

9 mikeNo Gravatar November 16, 2016 at 12:32 pm

I wanted to take a moment to share with readers who may be confused or concerned about their precious metals/mining holdings. Before I start I must mention that any words contained and expressed within this post are only opinions and not recommendations.

Precious metals and mining stocks have been getting crushed as a result of the upsurge in the strong US Dollar. The dollar is measured in a basket of currencies and typically commodities trade inverse to the USD. In other words, as the USD gets stronger commodities become cheaper and vise versa.

I agree with FIFighter in the medium/long run on his buys and I think he is dead on with his predictions for unlocked potential in this space. Here is my only caution, the US Dollar is in a clear uptrend and make have a few days to correct and let out some of the steam but that does not present a buying opportunity. There is more upside for the USD. We need to wait for this steam engine to run out of gas before we back up our truck.

Don’t believe me?

https://s16.postimg.org/4c99xyvlh/USD.jpg

I uploaded the USD chart here with comments. The USD chart looks healthy and I would not be placing my best against it today. Again, you will have some red days in the chart but the overall trend in the USD is up. Wait until this stalls out meaningfully THEN think about backing up the truck.

I am merely offering additional thought to the subject, I have no vested interest in your portfolio returns.

best of luck!

Reply

10 FI FighterNo Gravatar November 29, 2016 at 1:33 am

Mike,

Great thoughts and thanks for sharing! I agree with you that the USD looks incredibly bullish right now, and for precious metals enthusiast, the trend ain’t your friend, so it might be wise to stand clear, less we get steamrolled by getting in too soon. My own personal strategy is to buy in tranches, because I agree that there might be a lot more pain to come.

Cheers!

Reply

11 mikeNo Gravatar November 16, 2016 at 12:56 pm

*Forgot to mention, if you are converting your USD into foreign currencies (that are mostly pegged to commodities i.e AUD and CAD) in order to buy mining stocks, you are feeling the double whammy of the falling stock and the falling currency. But my belief is this is temporary and you will feel like you have jet packs on once the tide turns.

Be patient and wait for the right time to strike, your portfolio will thank you.

Reply

12 FI FighterNo Gravatar November 29, 2016 at 1:35 am

Mike,

I guess the only good news would be if you are buying miners who operate in places like Canada and Australia, since the local labor/workforce is all paid in a weakening currency whereas the metals are being sold in USD… So, although revenues will drop with declining metal prices, the cash costs will as well, to a degree…

Oh, and right now, rising base metal prices (zinc, lead, copper, etc.) are also helping some of these gold/silver miners better weather the storm.

Great thoughts, thanks for sharing!

Reply

13 LukesterNo Gravatar April 1, 2017 at 10:29 am

Sold all your Uranium stocks in early November 2016? Wow that was about as deft a shoot-yourself-in-the-foot move as I’ve heard of anywhere. We just had the biggest rally in U stocks since 2014. Way to go frenetic trader. The ‘trade-em’ if they sleepin’ twitch will KO us every time.

Reply

14 FI FighterNo Gravatar April 1, 2017 at 11:12 am

Lukester,

Thanks for stopping by. In hindsight it was the wrong move, but I saw value in precious metals at the time, so decided to make the swap.

I’ve made many mistakes before and will continue to make many more in the future. Sorry I disappointed you and shot myself in the foot… I am a terrible trader, for sure.

I’m gonna make a ton more errors, so perhaps this blog isn’t what you’re looking for and something beneath you?

There are many better, more shrewd traders/investors out there, like yourself, much more worthwhile to follow.

Take care!

Reply

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