Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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https://twitter.com/rektcapital/status/1527608112076795906
a good deep dive on btc death cross, price action.
Thanks harchris , that interesting.
Will be interesting so see if the miners have learnt their lesson of timing too, of when too sell. I think they'll have to be a bit more careful about expecting people to pay for their continual need for growth next time around
It's worth noting for the below to have the biggest effect there needs to have been a longer period between the bull market and the bear cycle, when they are closer together there's far more hash rate ready to come online allowing for difficulty to keep up much more easily with the bitcoin price (think Mara with their 23EH target by early 2023 and Riot with their GW venture in Texas)
The business model itself is not one that facilitates a tech stock valuation - why? Because the price of BTC is counterbalanced with difficulty in such a way that profits are kept in check during upturns and greater rewards to continue mining are offered in downturns. The longer the growth phase the small the marginal gain in profits become as hash rate quickly starts ramping up globally. Growth stocks must have the potential to grow 20% yoy with the potential profits almost unlimited, not reigned in and shared when times are good.
However, difficulty and the price of bitcoin are not perfectly matched, there is a considerable lag so as a trader what you are looking for is to be in when BTC is booming - think September 2020, October 2017 and March 2019. When this happens the price of bitcoin in the short term far outpaces difficulty, (mid Sept 2020 BTC $10.5k, hash rate 135EH, mid April 2021 BTC $63.5k, hash rate 170EH) - it is during these periods that the market gets drunk on the multiples that can be extrapolated from monthly mining figures and market caps get artificially inflated - (Nov 2020, 115 BTC mined, £1.48m rev, margin 57%... April 2021, 163 BTC mined, £6.7m revs, margin 85%).
The above shows monthly gross profit increasing from £844k to £5.7m in just five months, of course that is the sort of growth that more than commands a frothy PE so as long as the cycles play out again in a similar fashion and we see another sharp bitcoin move then once again the share price of any miner that has weathered the preceding storm will catch alight and there will be an opportunity to bank sizeable profits.
It's all about timing.
Interesting HarChris. I think the share price is where it is because it's being treated as a high growth tech stock, applies pretty much for the whole of crypto.
I stubbornly held on to mine and am well down at the moment but bought with a ten year view so not overly fussed at the moment.
Predictions for Argo back a year, eighteen months ago are likely to be well off the mark simply for the way in which bitcoin miners are valued now - back then it looked like they were going to be considered high growth tech stocks, forward projections had Argo making £100m a year (still can) with p/e ratios of 20, 30, even 40 and hence 400p a share, 600p, even 800p... but since then the whole business model has been called into question and no longer can they be viewed in that light - barriers to entry are too small, differentiation is almost impossible and simply it's a race for hash power (whilst keeping electricity costs as low as possible and efficiency as high as possible).
Interestingly it's actually a bear market that may create some differentiation - less efficient miners will struggle to keep the lights on let alone grow whilst those that can weather it will also have the opportunity to buy up rigs on the cheap and HODL considerably more as difficulty decreases. Coming out of an extended bear market we're likely to see fewer large NA miners than there were before whilst those that make it through best won't only survive, they will thrive.
Ps Bitcoin back above $30k.
I actually think the ARB discussions have become more grounded on LSE than previously, more talk about fundementals, breakeven points, governance, finances, structures, macro environments, with a good balance of Bulls and Bears
Historically was just up only, which was dangerous and I admit I was taken in on the £10, £20, etc price targets too
May be hard with those sitting on 75+% paper losses or realised losses, but rather the realities be discussed
If hits IPO prices tho, that's when load up, not towards end of May where NASDAQ is at the beginning of a probable 2 to 3 year decline
AB - I have been on the Telegram, I dont comment though, but the telegram channel is dangerous in my opinion, it is all up only talk.
Nick Slater for example was on there, so was Sausage Dog, both however warned of considerable down turn when at top, I think Nick called for 50p and explained reasons, but because was not up only was thrown off I believe
Golf agree the state of this board can be extremely poor most of the time. It has its moments though. Most holders moved into telegram/discord because of the nonsense here.
It seems madness to make investment decisions based on an LSE chat board though, but perhaps it works for you?The bashers clearly think 24/7 bashing works for them, and you've provided evidence that maybe it does.
If anyone has genuine questions about Argo, please do ask them!
I get what you're saying but you chose not to invest in Argo because of a couple of trolls on the LSE bb and a couple of others who can't resist the bait? The investment case should be more important to you than that!
Is was saying last week childish behaviour and name calling is a negative not just for the PI but the company too, reason why I invested elsewhere last week can't be doing with adults comparing there barbie dolls
Haven’t looked in on here for some time, but it’s abundantly clear that this is now a chat/argument space for a handful of people. Does Mike ever contribute these days? This looks to have found a level now in the 45-55p range for the time being. Looks very shaky though. All growth stocks are being hammered tbh. I really don’t know what to think about Argo any more. Clearly a massive pump last year which was not sustainable, suspect will not rise anywhere near as high again. Too many muck ups by the board at various times. Helios looks good but let’s see how long hash increase takes.