Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
If you folks bought based on some conviction, then I would suggest just relaxing and forgetting about the price jiggles unless the basis for your conviction changes.
For my part, as things stand, I'm positive both on the trend of the gold price and on the trend of the HUM share price.
As I see it, the basis of my conviction on gold and on HUM remains unless we see sustained rises in real rates or in the implied volatility of the gold price. And, given a positive outlook on gold, unless we see a sustained and significant rise in implied equity volatility or some company specific bad news comes out, then I remain positive on HUM.
I would also add that I personally would not go to town on high risk small cap miners like HUM. Keep the position size relatively small and sleep well.
The gold volatility (see GVZ index) has picked up recently, and the volatitlity of that volatility has also picked up. I lightened up on my gold miner positions recently for that reason, and am still holding off buying back into the miners for a bit longer... (Although I did buy a bit of GLD today, which I'll possibly sell again as soon as tomorrow if it rebounds.)
Long term, though, I can't easily see any other outcome than gold keeping on marching higher under the ruling conditions. There frankly is no room for real rates to go positive on a sustained basis without causing mayhem in our overleveraged econimes.
The GVZ (gold volatility index) has been ramping up the past week. With the expectation of piling back in again soon enough, I've lightened up on this and on other gold miner positions a bit in the past few days as a result.
Of course, just because the GVZ is getting more elevated, it may quickly reverse course, or it may not in any case translate into a lower gold price and/or lower prices for the mining stocks in the short term. But I've been taking some profits in anticipation, and am now waiting to see.
My view is similar, except that gold miners too tend to get dragged down during large down moves in the market, at least initially, as everyone liquidates their winners with their losers. I sold nearly all my shares in everything, including gold miners, in early February this year, as I saw China shutting down massive cities. This must surely have been one of the most clearly signaled crises ever?
Investmentwise I do hold some gold miners still, though (currently this one, Wesdome, Lundin and Dynacor, the latter of which is a toll miller and not a gold miner). This is the company I like least of them, because I'm suspicious of the motives of management here. But the valuation still seems attractive in spite of that, and after the recent move up I'm now in the blue, so that makes me feel better about it...
I'm sure the self serving people running this company have no intention of sharing cash flow with us shareholders, however...
Doesn't the rule book for gold miner investing state that Harmony Gold flies first (Has now more than doubled since things turned up in May), then the larger producers, and then the smaller producers take off in a more radical manner as hoards of greedy speculators pile in?
And the miners by and large still need more time with good gold prices in order to get their balance sheets into good shape. I guess it might help that the gold price is proving pretty resillient in the risk on environment we're in. But so far streamers have broadly been a better risk/return proposition than miners.
HUM also still has to convince investors that its management is not just a self serving bunch of cowboys, but that it actually gives a modest crap about shareholders. I guess that reestablishing the trust of investors is going to mean that it will be quite slow to react positively to events. It also had a nice run up from the lows, so I guess the technical analysts out there might see what is going on now as a promising consolidation period before a new move upwards..?
Not HUM related, I'm personally going to take a cautious bet today on Newmont (having been a laggard so far) coming out with some decent figures tomorrow, and will put in a modest bid today. This is not investment adivce, and my posoition must be taken in the context of me being an idiot.
That was quite a trade there today.
I've been staying far away from this one for a while now, ever since that awful conference call they did where they had to admit buying into that scam in the US, and generally came across as pretty self serving and lacking in respect for shareholders. Now I reckon I might double my modest position here tomorrow, as I'm guessing it's going to get a bit of a boost over the coming weeks, as it appears some serious entity is possibly having a bit of it.
Well, either that, or I'll get burned and end up sitting on twice as many shares at an even lower price...
Ahem, chilting, impeccable credentials and Yara? Are we talking about the very Yara whose former senior executives got convicted and served jail sentences in the largest corruption case to ever be brought before Norwegian courts..?
Hi folks,
What concerns me is that the guiding motivation of company management is not clear to me, and I fear that the agenda of company management is not aligned with the interests of many of us small shareholders, and that we'll end up seeing precious little of the free cash flow being generated.
As I see it a portion of free cash flow should be directed towards dividends, as I have purchased shares in a project I came to believe in, and when that project subsequently appears to work out successfully I don't want the entirety of the cash it generates being directed towards new risk taking by the company. I want some of the cash directed onto my account so I can go and use it as I want to, maybe reinvest it in something, maybe buy some of the nice shiny coins they sell, or maybe just blow it on booze. Whatever I fancy using it for, essentially.
A dividend announcement and some insider share purchases would certainly help ease my HUM concerns!
Besides the recent concerns in respect of their involvement in Bunker Hill, I'm becoming increasingly suspicious that HUM management does not intend to share profits with shareholders. Once a company is up and running and producing a nice free cash flow, what I want to hear are noises about upcoming dividends, not share buybacks, and not the dedication of all free cash flow to other projects.
Share buybacks do perverse things like trigger management benefits without a corresponding real improvement in the business, and reward the selling of shares instead of holding/accumulating them.
And reinvesting all free cash flow into other projects takes control of the investment frame away from the shareholder (what we want to be invested in and when). For me this is pretty important, as I want to be involved in a certain type of resource during a particular period of time, and don't necessarily want cash flow generated today in its entirety to fund investments outside that frame.
What struck me in the recent conference call, when questioned about insider share purchases, was that the answer only referenced the price effect of selling shares, and avoided the concept of dividends as a way company insiders might gain from accumulating shares without selling them. If the company is producing a good free cash flow, shareholders should not have to avail themselves of selling shares in order to realise gains; They should be motivated to hold shares through dividends.
The lack of insider buying increases my level of concern, and for this reason I have held off accumulating any more shares in HUM since last year. My holding here is currently pretty modest, so I'll hang on and see what happens.
I just read the Q2 update and listened to the conference call. This smells funny.
I just came out of lurk mode to add my own concern to the chorus for reasons already stated by others here. If they want to go gallivanting around the world, jumping on unrelated ventures like they're some investment fund, then they should do so with their own money. As far as I'm concerned it would be better to pay us divvies and let us decide ourselves where we want to deploy our capital.