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UK government making noises about expansion of our WFT too.
You can see why the US historically do much better than Europe. We just dip hands into the pockets of successful businesses when it suits. I’ve always been weighted towards the UK, but think I’m going to rebalance towards the US going forward.
All of these pressures are plain to see in the oil market. China, US and Russia are all going to be pushing the oil price now. The market seems behind the curve though.
Tempted to bet the farm again on Shell and OP as I did in 2020.
Great day in the markets!
FTSE looking to open up well today too.
Dare I say £26?
I’ve been derisking as I ended up with too much in Shell, but everything is screaming at me to let the rest ride till high £20s.
Still a lot of pressure behind the oil price as China inevitably reopens and Russia gets price crapped and OPEC not playing ball.
Oil price doesn’t seem that crazy, and supply should remain tight with OPEC not playing ball, screws being turned on Russia and China inevitably reopening.
10 year Brent crude:
https://www.macrotrends.net/2480/brent-crude-oil-prices-10-year-daily-chart
It was a 50/50 bet. You know what the markets are like!
I’m Ok with the dividend rise. The future increase in dividends should be part of the share price rise story.
I think Shell is a good share and I’ve been topping up a lot recently:
- Inherently undervalued
- Good and rising dividend
- Oil in a fairly stable place
- Russia price caps coming in
- China will inevitably have to come online further and increase consumption
- US strategic reserves running down
- ESB lobby have been bought back to earth now we need energy security
Accumulating here for a 5-10 year hold.
15% Divi increase
New $4 billion buyback programme
$9.5 billion income vs $9 billion consensus
Only the buybacks priced in. Think it’s a beat personally and will be a green day.
Mood music is about quarantines being abandoned. Should be good for us.
Quarantine plan for UK arrivals could be ditched as MPs revolt
https://www.telegraph.co.uk/politics/2020/06/01/unworkable-quarantine-plan-uk-arrivals-could-ditched/
That’s a punchy holding - makes me feel better. If you are really all in I would consider diversifying in the next few hours as there is still a lot of money to be made here over the long term without betting the farm.
Starting to feel substantial enough that news is leaking rather than people just buying back in. I haven’t sold a single share and firmly believe that this whole episode serials and accelerates a take out when the court clarify the position.
Agree the potential delay is the not good. However, the government will know this and just published a strategy this week they will want to execute on. Significant delays would also damage investor confidence. For that reason I’m sure they won’t let this drag on for too long.
It’s still a stellar buy at this price. The government have just reasserted their support for mining. When the court case is thrown out, sovereign risk will be much reduced vs one month ago. If people get behind the copper price projection, you then have an asset with proven economics and with less risk.
The final thing I would point out is that I feel the events of the last few weeks bring us closer to a take out.
- PEA confirmed by an independent third party which derisks for an acquirer
- Acquirers will have their own views on Copper price which hopefully tally with the PEA or thereabouts. I don’t believe the PEA author would be that far wide of the mark
- New mining strategy from central gov and clarification that central gov own the mining laws tested in court shortly
- NM having taken a few blows lately more likely to come to the table
- BHP or Newcrest will see themselves as better placed to manage sovereign risk and probably look at the startup costs and see efficiencies not open to Solgold to maximise the economics
- Government will want to speed up delivery of the programme if protestors are getting louder
- Solgold is cashed up with 90m in the bank, but now have a budget if 120m for drilling over the next year. I can’t see them wanting to tap the markets again and take on more dilution to get to BFS
My hope for takeout has always been in the 80-90p range and it feels closer now as NM has to think about going to the market for cash in Q3/Q4.
Rising copper demand and shortage of supply was always the investment thesis here.
260 to 330 is only something like 2% rise over 12 years. Even covered by general inflation before any increasing demand.
I know markets don’t move in a straight line, but considering the way mines are running down and we have growth in the electric car market alone that doesn’t seem like a reckless number considering the length of time the market will be operating.
I’m not an expert, but very comfortable with my investment here based on this thinking.
Surely this will put the court case to bed. You can’t have the government publish a mining strategy then have it contradicted in local court a day later. If there was any chance of that surely they would have waited to publish the strategy for a few days!