Time to Sell Some Miners, But Not Much

Junior Miners

There is no training, classroom or otherwise, that can prepare for trading the last third of a move, whether it’s the end of a bull market or the end of a bear market. Paul Tudor Jones

I am selling about 1/5 to 1/6 of my speculative miners like Minco Silver. It was trading back in Jan. 2016 at about 30 cents.

Minco one yr

This miner didn’t fit all my criteria like jurisdiction and top-flight management, but it had $1 per share in cash and short-term investments and $2.00 per share (basic shares outstanding) in book value with no debt.  I viewed the stock as a cheap call option.  My position was not a full position but diversified in these type of exploration/pre-development type of companies.

MSV_2015YE_FS  Minco Financials

Minco Presentation

This bull market is starting to smell like the 1970 rally!

Bear-market-comparison-Gold-768x685

So, I expect this bull market to last perhaps years or for miners to multiply several times over.  You make your money SITTING.  But when you start feeling smart or, worse, other people think you are smart (where were you in 2015 when my accounts were down 35% to 40%?), it is time to peel some positions off.   Sell into strength. Note the past history of the miners.

bgmi

I wanna go back to the 70’s.

An educational video on the Federal Reserve or why you should own some gold

Have a Great Weekend!

4 responses to “Time to Sell Some Miners, But Not Much

  1. John,

    Hope your recovery is going well. Are you considering tax consequences when selling as in selling only long term securities to avoid realizing short term gain (and paying ordinary tax rates), looking at individual securities and selling for non tax reasons, or something else. Just curious as to how and when tax consequences factor into your buying and selling decisions, if any. Thanks

    • Yes, I do look at taxes like long-term gains vs short-term gains and what can offset those gains. But mostly my decision is based on a combination of valuation and
      risk tolerance of the overall portfolio. I can redeploy into cheaper, better-managed miners or other industries. Minco’s price is now speculative and pushed by momentum.
      However, many miners are focused on return of capital and not growth per se, quality deposits will become VERY valuable, and monetary mayhem bodes well for gold and silver so I don’t see an end yet to this upcycle–perhaps years away. But this is my supposition based on the economics of mining (mines can take years to reopen, economic deposits may not be found no matter the expenditures) and the amount of capital that fled this space over the past half decade. I can’t predict the future just observe the past and present.

      But, I think, the easy money has been made. The miners were so cheap six months ago that it didn’t matter if gold fell more.

      Gold doesn’t rise in price; the dollar falls per grams of gold. Gold just sits there; it is the dollar or the Euro that changes.

  2. Oh my goodness! Incredible article dude! Thanks, However I am
    experiencing difficulties with your RSS. I don’t understand why I
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    Anybody who knows the answer can you kindly respond? Thanks!!

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