Booking Profits – Kirkland Lake Gold ($25,677.87 Realized Gains)

by FI Fighter on June 27, 2017

in Precious Metals Updates

On this blog, I’m always emphasizing the importance of, “buying low and selling high.” After awhile, I’m sure it gets pretty redundant for you all to keep hearing over and over again. Nevertheless, when it comes to the BIG PICTURE with investing/speculating, that’s what it really comes down to…

Nope, nobody can perfectly time markets and pick out the exact tops and bottoms… but you don’t really need to in order to achieve your goals.

As it pertains to mining stocks, the sector is beyond volatile, so my own belief is you’ve got to try and be cognizant of where we are in the market so that you can get out when the going is good…

Leaving juicy profits on the table is never ideal, but it sure beats losing money any day of the week!

Right now, the precious metals aren’t really doing anything too interesting, and for the most part are just stuck in a consolidation pattern… Nevertheless, the markets aren’t exactly super efficient, and at any given moment in time you’ve got your fair share of companies that are: fairly priced, overpriced, and underpriced.

Today, I used the opportunity to close out my position in Kirkland Lake Gold (KL.TO), selling all 3,800 shares @ C$11.94/share. Kirkland Lake is one of the better names (if not the premiere name) in the mid-tier producers space but right now everything is essentially all rosy and the company is firing on all cylinders, so you all know what that means…

 

Buy low and sell high!

 

And,

 

Never fall in love with an investment.

 

KL.TO is up an impressive 71% year-to-date (YTD).

KL.TO is close to trading at 52-week highs as I’m typing this, while most other gold mining stocks are getting pummeled left, right, and center…

So, I ain’t about to look a gift horse in the mouth and ask too many questions…

 

Just sell, baby…

 

In the end, I booked long-term capital gains of $25,677.87 for a total return of 294% off of my original Newmarket Gold (NMI.TO) shares; I obtained shares of KL.TO after the merger of the two companies late last year.

I’ve made a ton of mistakes while learning how to play the Game of Rocks, but I gotta say that this investment/speculation was one of my better trades.

Despite the sale, I’ve really got nothing but positive things to say about Kirkland Lake Gold… This mid-tier producer really checks all the boxes one looks for in a quality gold stock… And I’ll admit that selling high is never easy and I always feel like an idiot for closing out a winning position… But I’ve also suffered more than enough pain in the past to know that you’ve just gotta sell high whenever you can…

No looking back, no regrets…

And…

Investors/speculators who have the courage to dabble in mining stocks no doubt get a lot of flak from most everyone else in the investment community… It’s a risky business, for sure, but one thing these pundits seem to routinely miss is that you can’t evaluate these assets like you would most everything else out there…. Mining stocks (outside of royalty and streaming businesses) are NOT suitable for implementing a long-term Buy and Hold Forever strategy!

 

Everyone needs to stop trying to force-fit a square peg into a round hole…

 

It won’t ever work!

 

Case closed, end of discussion.

 

There are a million and one ways to make money out there… but you’ve gotta be open-minded and willing to adapt to the rules of whatever game you’re playing.

 

I ain’t that good… I can’t perfectly time market tops and bottoms… I have not a clue where the gold price will be trading at tomorrow, let alone next year… I got no insider connections… I ain’t ever participated in a private placement before…

Etc.

Despite all that, it doesn’t bother me at all because I accepted all my limitations as fact upfront. With KL.TO and so many other miners, I just try to buy into despair so that I can later sell into strength.

 

It’s not all that complicated…

 

Right now, I’m happy to book this win and reload my cash position in case we get even better buying opportunities in the future.

 

And I can’t wait to unload a bunch more mining shares at/near 52-week highs again. It’s actually pretty damn gratifying, I must confess.

 

Happy Hunting!

{ 12 comments… read them below or add one }

1 FundamentalAnalysisNo Gravatar June 27, 2017 at 1:42 pm

Well done!…..know exactly how you feel turning unrealised gains into realised gains. It’s a sigh of relief when you know that you actually made it.

Reply

2 FI FighterNo Gravatar June 29, 2017 at 6:00 am

FundamentalAnalysis,

Thanks! It feels good to have turned some unrealized paper gains into realized gains.

Huge sigh of relief for sure. 🙂

Cheers!

Reply

3 VinNo Gravatar June 27, 2017 at 3:26 pm

Good call! You have made me think about my position… I also booked profits on my Newmarket shares and bought more Kirkland late last year. Apart from Silvercorp, these are only two mining stocks with +20% gains since 1/1/17 (Mirasol Resources and Falco Resources getting close to 20%). Speaking of which: what is your opinion of Silvercorp? Lowest cost producer in the industry + high grade + huge upside in my humble opinion. Cheers

Reply

4 FI FighterNo Gravatar June 29, 2017 at 6:02 am

Vin,

Congrats on the big win with Newmarket Gold and now Kirkland Lake! That merger has certainly worked out well for all shareholders.

In regards to Silvercorp, I really like the name and story, unfortunately, I’m a bit hesitant to invest in the company since their mines are located in China… I’m sure that jurisdiction can work, but with Eldorado vacating and knowing how opaque China can be, my own preference is to stick to more “transparent” jurisdictions.

Just my own preference but there’s nothing wrong with the company and they have been doing a wonderful job so far.

All the best!

Reply

5 PassivecanadianincomeNo Gravatar June 27, 2017 at 5:23 pm

Nice work. I’m not one to buy and sell but have a couple stocks that have done really well atm. Not the 72% in 6 months tho. That’s awesome!

Reply

6 FI FighterNo Gravatar June 29, 2017 at 6:03 am

passivecanadianincome,

Thanks! Yeah, mining is a different game where one must buy and sell… It’s too volatile not to.

Take care!

Reply

7 desidividendNo Gravatar June 27, 2017 at 7:50 pm

Nicely done,take profit man.

Reply

8 FI FighterNo Gravatar June 29, 2017 at 6:04 am

desidividend,

Thanks! Always happy to take profits! 🙂

Cheers!

Reply

9 VinNo Gravatar June 28, 2017 at 3:39 pm

Ps. I followed your move, I have sold half of my Kirkland portfolio at 12.15 and bought back Eastmain Resources (at 0.325). Substituting a 52 w high for a 52w low 😉 Thanks and keep up the good work that you’re doing!

Reply

10 FI FighterNo Gravatar June 29, 2017 at 6:04 am

Vin,

That sounds like a prudent move. I love the concept of selling high to buy low.

Hope the swap works out well for you!

Cheers!

Reply

11 JoelNo Gravatar June 30, 2017 at 1:47 am

here is a local band i once drummed for… i laughed when i seen the film clip ‘money to burn’ thought it was fitting!

http://www.beat.com.au/music/video-premiere-brian-el-dorado-unleashes-killer-money-burn

Melbourne Australia based band.

Reply

12 FI FighterNo Gravatar July 3, 2017 at 10:58 pm

Joel,

Thanks for sharing!

Take care!

Reply

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