The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
I like the optimism shown here but I still worry POW and similar explorers are risky; most drill holes reveal worthless dirt. PJ himself said most projects fail. Nevertheless, I am breaking one of my rules to diversify and I bought some more shares today. I may well buy more if the price drops.
Bobbust: I would encourage you to be optimistic here. As PJ himself points out most projects fail but the prospects here are as good as any. You seem unhappy with the pace of the investigations and analysis but the technologists have their procedures to ensure accuracy above speed. If you doubt me have a look at ECR where a second set of analyses showed many huge discrepancies including one sample which first gave a 0.1g of gold/ton and later showed 48g of gold/ton. If POW wants to get results faster the costs will have to rise. With so many projects on the go I expect POW is trying to get the best value for its money.
I spent 40 years in industry mostly as a chemical analyst and I have to say to correlation between the two sets of results is shockingly bad. Most errors occur in the sampling stage and chemical analysts like me insist on taking the the sample; I would not rely on someone else's word for my results. Part of the cause for the discrepancy might well be because the rock cores are of uneven concentration. There is, or was, a British Standard for sampling uneven compositions but the requirements are so onerous that neither ECR nor any other company would want to pay the costs.
The RNS did not go into the detail of the analytical procedures but the choice of analytical procedure would affect the result. As an example, just before I retired I had to determine the thickness of some gold plating. I used three well established techniques all using certified standards and came up with three different sets of results. I commented that they were all equally correct.
I see in today's RNS the proposed battery will be 49.9 MW. The connection will handle that power. How long will the battery supply that power? A minute? A day? An energy rating (in MW hours) would have been useful. The equivalent RNS in FSFL does not say either.
I was most interested to read the strategies we investors try to increase our savings. If you are lucky or skillful enough trading frequently works. SMT has the advantage of a small spread. I prefer to buy and hold and my holdings in SMT are an example of that working.
I am however considering selling SMT because I think the change of manager is for the worse. Also Baillie Gifford has lost its way. I used to hold five BG investment trusts but sold the others because of poor performance. SMT's winning strategy of buying early stage companies is no substitute for a good manager. I back small companies that might grow fast among the mineral explorers but I would prefer to give the job of picking stocks to good managers.
There was a lengthy discussion about the grade of 0.6% being low. A few months ago I read that in copper's case mines of 2.5% have mostly been exhausted and that 0.5% is the future. If production is to continue the price will have to rise.
A possible recession in China caused the price of copper to fall recently. That is probably temporary as demand for copper is increasing. Sooner or later 0.6% will be profitable because there will be nothing better.
Andersj: Last Sat at 12.47 you seemed unhappy that ECR seems to be starting again. If you look for a mineral in a likely place, find a little, look again for more, find a little more and keep going, either you find lots or you give up. In this business most projects end in failure so starting again is the inevitable consequence. One good result of a change of CEO is that the new man does not lose face by abandoning his predecessor's projects.
I do not like the exposure to Chinese companies either. Nor Tesla, I think Tesla will be squeezed by established car companies. For me the best reasons to sell SMT are that the new manager is not the calibre of the old one. Also Baillie Gifford as a whole has being going wrong for a couple of years now. I have already sold MNKS, EWI and PHI because of inferior performance.
I listened to yesterday's interview with interest. I do not know much about the internal finances of companies even though they are important. My background is as a chemist in industry including the ion exchange he mentions. GB comes across as someone who knows what he is talking about. He assumes rather too much I think, does everyone know that phos acid is short for phosphoric acid and what the significance is? Nonetheless he gets my approval and I intend to hang onto my RBW shares even though we are in a rough patch. I reject 50% of companies if I do not like the CEO, e.g. Scottish Mortgage Investment Trust.
There is always a worry that a company with a falling share price could fall to zero. In POG's case the world will always buy the output. How much debt does POG have now? If the debt is low enough I think now is a buying opportunity.
Unless I have missed something ECR still does not have a replacement for Craig Brown. Assuming the board find someone suitable should we expect a boost in the share price when the appointment is announced? I dare say it takes quite a while to find a good candidate and to persuade him to join but it does seem to be taking quite a while. Any of you more experienced people have any opinions?
1st time lucky, I too closed my HL account for being too expensive. I use X-O run by Jarvis Investment Management and II. I prefer the former because it is cheaper and I cannot fault the service. I think you need to look into the matter carefully first, you could otherwise lose significant amounts of money in sneaky charges.
I think you are correct to sell when the price is high even if you like the long term prospects. However "experts" advise investors to buy and hold because it is difficult to get the timing right. A consequence of frequent trading is that you might hold significant amounts of cash waiting for the right time to buy.
PaulFG, A good point. Bias is what I suspect in the two articles I have mentioned. I do not know enough about the subject to be certain though. While he may exaggerate I think it unlikely his facts are wrong and unlikely that the companies he praises are truly hopeless.
I should add that Alan Green has an article in What Investment equally enthusiastic about POW. Is he so enthusiastic about every company? Search for "A surge in metals and mining is empowering a commodities supercycle"
I have invested my own money in both ECR and POW since last Spring. With both these companies I am hoping for growth like EUA and GGP. ECR may be further advanced.
Lochranzalad, I am a bit like you , impatient. I want to do something now. However for ECR and similar companies we just have to wait. We can read some news and decide whether we like the prospects at ECR more than elsewhere but that is all. Other contributors to this chat are more optimistic.
Alan Green has a podcast with a good summary of the recent history of ECR and is full of enthusiasm. Search for "Share Talk Ltd - The ECR Minerals (ECR.L) Gold Rush is already underway (Podcast with Alan Green)" This will cheer you up!
I agree with Elguiri. I worked in metal matrix composites for 25 years. We had a world beating coating. It failed to achieve any significance because of scientifically illiterate management, inertia and patents. I think copper is safe for now but I will consider investing in Tirupati Graphite.