Member Info for TakingMyTime

Bamps, do you really think it could start at that volume that soon?

Hi, Jack. I stand by my statement -- anyone can train himself/herself to think like a pro.

That's not to disagree with you. It's hard to do, and few do it, for all the reasons you gave. But let's not forget that the pros fall into the same traps you described. Certainly Neil Woodford did. There are others less well-known. They are human, too.

You're really talking about something different than I was, though. You're talking about learning to make balanced and honest evaluations of the future. I was talking about learning to forget the past, and compare today (the current SP in the market) to one's evaluation of the future. The former is MUCH more difficult.

You not only have to be honest about the company and the market, you have to be honest about yourself -- your age, personal circumstances, etc. What strategy should you be pursuing given your own circumstances? Is your strategy really the right one? And if it is, even if you have succeeded in what you describe and have arrived at a good and balanced view of the investments, do you really have the right ones to match your strategy?

I'd suggest it is even harder to be honest about one's self than it is to be honest about one's investments. And it's even harder to keep updating your view of yourself.

It's not all that hard to say, "I believe GGP today is worth Xp, so the current SP means we're still at great value." And then, you update that assessment as the next drilling results are announced, and look at SP movements.

It's a lot harder to say, "I'm older now, how much risk should I really be taking? Has my willingness to take risk moved from balanced and reasonable given my age to simply greed or thrill-chasing?" Who wants to be honest with those questions?

It's much easier to say, "Well, GGP is AIM but it is substantially de-risked so I don't have to answer that question." And maybe that's actually true for this one investment? Or maybe it's just a convenient excuse to defer the analysis we know we should be making?

Of course, maybe I'm just rambling about this because I'm going through some pretty intense self-analysis right now. But this is the kind of stuff my father taught me when I was twelve when he started talking through every investment decision with me. It was a once a month thing back then, not every night like Jerry described, but he dragged me through both his self-analysis of where he was in life, his strategy, and his investments. I have always found that process and training immensely valuable.

Hi, Jerry. You said it better than I did.

Only thing is, I wouldn't classify it as trader vs PI. Any PI can train himself/herself to think that way.

But a very nice post that made the point well.

My best ELO was 2024 in 1984. I don't know if there's been inflation or deflation since, and I don't really have any idea whether I was close to my ceiling or not. I was young so one would think there was room for improvement but I'm not sure I had the patience to improve that much. I think some of the mental disciplines from chess have helped me, but also probably impacted me socially, because as you noted, I can and do over-analyse.

Now, I just play chess socially, mostly to blow away some ****y kid who lacks sufficient humility. "Yeah, I've played a little chess in the past, I'm willing to have a try." LOL. But I haven't really kept my hand in and I'm sure you'd crush me.

LOL. Yes, I'm a chess player, and not a bad one. You've got me pretty well sussed.

And no, I certainly don't think having an exit point makes one a trader. You probably read something into something I said to get that, LOL.

Thanks for the response.

@Strummer
I think your post is based on a common investment fallacy. Setting aside tax considerations, it should not matter at what price you purchased. The money you invested is sunk cost.

The only thing that matters is today's price (and dividend, if any), where you think it is going (again, price and dividend), and what kind of investment you want to own.

Today, there is no difference between the person who bought at 1p, at 38p, or at 20p. All of them have an investment that is today worth 20p and that they hope will be worth more in future. Any of them who doesn't think it is going up should sell now, whether it is to take profit, to take a loss, or to break even. Any of them who thinks it is going up should continue to hold, unless they think they can get a better risk/reward ratio elsewhere.

Any of them who wants to play the trading game can play the trading game. It makes no difference whether you are trading with shares you bought at 1p or £1.

The only difference would be tax considerations, but if you are operating within an ISA or SIPP, that's irrelevant.

The other difference is emotional. It hurts to sell now if you bought at 38p, emotionally. But analytically / financially, you are best forgetting what you paid.

Perhaps a simple illustration helps. If we stay at 20p for the next year, everyone who decides now to hold will make nothing over the next year. The guy who bought at 1p will be sitting there proudly saying he's got a 19 bagger, but he's made nothing from June 2021 to June 2022. The guy who bought at 38p will still say he's down 45% (or whatever) but he's actually lost nothing from June 2021 to June 2022. The guy who bought at 20p will say he's made nothing in a year, and he's right (and maybe he'll rant about the MMs holding it for a year).

Who will have made more over the year from June 2021 to June 2022? All the same. Doesn't matter what you paid.

If you chose to hold today, you passed up about 20p per share that you could have had. Effectively, you made a decision to keep 20p * #shares invested in GGP, as much as if you had the money and chose to buy the shares today.

Good investing is always forward looking based on what you could get for the shares today and how you view the future compared to that. When you let "what I paid for them" affect your decisions you start to make mistakes.

@Sliotar, I don't often agree with you but had to LOL at this.

I expect an increase sometime this month but it may not be all that big and if it doesn't come it doesn't matter. All that matters right now is finding more gold and copper at Hav and pressing on towards production. The latter is happening, the former we're about to learn more about it.

@RedTrader, I'm not an expert on Aussie tax rules but I suspect the option has been exercised today and the tax due now will be based on today's SP. The fact that the shares are being added to trading on the 10th is a trading matter, not a tax matter. Tax rules do not always match reality.

Again, I am not an expert in this area. The only thing I am certain of in the prior paragraph is the last sentence, which has been proven over and over again.

There may be some confusion on capital gains tax, based on some comments. When CB exercises his options, he has to pay CGT on the difference between the price he pays and the market price on that day. So as Paddy noted, he'll have reduced his current tax hit by exercising options before a price increase.

Normally, your tax basis is what you paid for your shares. In this case, going forward, CB's tax basis will be what the market price was on the day he exercised the options. When he sells his shares, he'll have CGT again (assuming the price goes up) on the difference between the sale price and his tax basis. So the lower the SP when he exercises, the lower the current tax hit and the higher his eventual tax hit will be. By exercising when the SP is low, he doesn't actually reduce tax, but he defers more of it.

So, for instance, if today's price is 20p and he exercises at 2p, he'll pay CGT this year on the difference (18p). If he sells the shares later at some random number like £1.44, he'd pay CGT on the difference between £1.44 and 20p -- £1.24.

Because he's not actually receiving the money when he exercises the options (he's actually putting out money, 2p per share), it's definitely to his benefit to reduce his current tax hit by doing it when the SP is at what he thinks is a low point. (This was Paddy's point.) It doesn't actually change the CGT that he will ultimately pay when he sells for £8 (in Jerry's dream world), but it defers most of it until he sells, which is obviously better.

Pretty clearly Callum has not sold shares to fund the purchase (the 2p per share he's paid) so that appears to be simply an out-of-pocket investment (otherwise, it would be in the RNS). I haven't checked the Oz rules as to timing of CGT payments to be sure, but it's highly unlikely that Callum has to pay the CGT today. He might have to pay it next month. He might sell shares to cover that cost and simply hasn't done so yet -- perhaps because he expects the next results to juice the SP.

He may also currently be unable to sell any shares, depending on what he knows.

But no one should be surprised if we later get an RNS that he has sold some shares, enough to cover the tax (and maybe a little bit extra for a party or a new car or something). When that comes along (if it does) don't be surprised or bothered, it's really all part of the same deal, he's just timing it to take advantage of a rise in SP that is likely coming later this month.

A rise in SP is of course not guaranteed and if CB does sell some to pay his taxes, it might slightly dampen any rise. GLA.

Hi, speedy. You asked "why would investors...." I concur with you that it is not something I would do right now except perhaps as a temporary holding place for cash.

But there are many types of investors with many types of profiles and attitudes to risk. It can be helpful for us to understand them because even if we wouldn't behave as they do, they affect the market (and the world) in which we are operating.

I don't see the appetite for Treasuries as likely to diminish anytime in the next 10-20 years, unless the USD completely collapses. Since my expectation is that it will gradually devalue rather than completely collapse, I'm expecting continued low interest rates, continued inflation, and thus a continued increase in the value of gold. I actually expect gold to increase more rapidly than general prices and many other commodities, and thus to have real price appreciation (not merely preserving value). This is because I expect demand for precious metals to increase significantly in an inflationary cycle.

Of course, my crystal ball has some major cracks in it so my predictions have been known to go amiss. ATB.

"Why would investors "invest" billions of $s in US treasuries"

Multiple reasons. MM gave part of the picture.

You have an aging population, and a lot of the wealth is with older people. They want security. They might already have plenty to pass to the kids, what they want is something that will be there for retirement. If it loses 1% a year, so what? As long as it is safe.

Then, there's pension funds. This is not just the US, same thing applies to UK. Pension funds have risk requirements. Some of them are effectively required to buy sovereign bonds (Treasuries in the US, gilts in the UK). A massive part of the Treasury market is pension funds.

Banks have liquidity and safety requirements. Treasuries are liquid and deemed safe.

Then, there's the uncertainty thing. Covid, war in the Middle East, etc. Treasuries are considered to be a safe place to park funds temporarily. I put some money in gilts when the market started going pear-shaped last year. I knew they would probably lose money, but they were safe. When I deemed we were close to the bottom, I pulled them out and put them in recovery plays like BP, IAG, ROR, ML, PSN. I made a lot of money with that move, even though I missed the bottom considerably. There are lots of other people who are more cautious than me and still want sovereign bonds rather than equities.

The world is a scary place for a nervous investor. Domestic sovereigns mostly take default risk and exchange rate risk out of the picture. The US has the most money in the world, and so probably by far the largest share of funds at the disposal of nervous investors. A nervous US investor will be heavily in Treasuries. If they think inflation is blowing up they might be in TIPS but they will be in Treasuries.

The ramifications of all this for gold are, in my view, very bullish. It means that the Democrats in America can keep spending without having high interest rates slam on the brakes. It means that even if the Fed tries to dampen inflation by raising their rates, the rates that people will pay will be held down by the insatiable demand for premium debt securities (Treasuries and other AAA-rated paper). As a result, the Fed won't be able to stop inflation even if they try, IMO. The implications for gold, other precious metals, and other commodities are obvious.

"Theres actually not enough US debt to go around sometimes can you believe?"

Few PIs know this.

There's no way central banks could hold interest rates down if it weren't true. They can play games with the level that they'll loan to banks, but the thing that is really holding interest rates down in the real world is supply and demand. There is more demand (people wanting to own US Treasury securities) than there is supply.

Many factors driving it, but until they change, skyrocketing US debt is going to have less impact on interest rates than many people expect.

Strong recovery play, I suspect they'll hold a lot.

This is a good move, IMO. It gives access to all of Blackrock's research departments without having to duplicate the effort. It would be really nice if good asset management could take some chunks out of the pensions deficit.

@Malva "I am unfamiliar with the SOLG/FN deal."

You can read about it here: https://www.mining.com/solgold-gets-100m-injection-from-franco-nevada/

It wasn't a farm-in but there are parallels. Majors held significant stakes in SOLG and at least one of them was not best pleased by the deal. FN didn't care, they still spent a nice dollop of cash for a very small stake in the Alpala mine.

That suggests there could be multiple people who might want GGP's share of Hav. It's not just other majors, it's streamers, or simply some UHNW individual could decide they wanted to own it. That could be accomplished either by buying GGP's share from them, or simply by buying the company.

Majors are willing to be junior partners in a joint venture. Newmont is a junior partner with Barrick in their Nevada JV. There are a lot of entities, including mining majors, who might be quite interested in buying 25% of Hav.

That does not necessarily mean that NCM is playing the white knight, or would. But it's hardly a far-fetched possibility.

@Malva
I certainly don't think NCM is building towards a hostile takeover. I agree that there would be significant reputational risk in that. I also don't see it as primarily about getting a head start on a bidding war. It's more likely to head off a bidding war by sending a giant "hands off, this is our territory" to any potential competitors.

Given last year's SOLG/Franco Nevada deal, I think it is safe to say that 25-30% of a Tier One asset would be desirable and others might well want to get in on the action. I would not be surprised at all if Barrick (especially) has given some thought to making a move, and might have even made an offer for our share of Hav.

@Jiffy, it's 5% FMV of Hav, not of GGP. If the parties can't reach an agreement on FMV, there will be a mechanism in place using independent experts to arrive at a value. My guess is they'll reach a negotiated agreement involving a price for known reserves and further payments for future expansion / discoveries within the JV area.

@Malva
I am unaware of any precedent of NCM quietly buying shares on the open market. If you wish to base your planning on assumptions that precedents will not be broken, you are welcome to do so, obviously.

I do not find your argument, however, compelling. As a shareholder of NCM, I can see no problem with them quietly buying shares of a junior that they consider to be undervalued. My sole concerns would be legality (did they do it without breaching insider rules, a problem which is completely solvable), profitability (is it really undervalued?), and relational (is it detrimental to relations with the junior?).

Under the scenario I laid out each of these hurdles is easily cleared. I am sure that the GGP BOD would be quite happy to have NCM buying open market shares, up to 5-10%. There is no relational issue. I certainly think it is currently undervalued. That leaves just the technical issue of doing it legally, which as I said is easily accomplished.

There is no reason NCM shareholders should oppose this and I've already given the logic for why NCM might do it. You've not actually refuted the logic, you've simply said that since they haven't done it before they won't now.

Again, I am not arguing that this has happened or is likely to happen. But I do consider it a possibility. It's one of many things NCM might do to bolster GGP's independence / defence against corporate raiders. An important part of investment analysis, IMO, is the end-game. My view is that the end-game is not likely to be an early takeover of GGP, precisely because I believe NCM has already taken steps, and will take more (maybe even this one we are discussing) to defend against that.

It is exactly because of my view of NCM's actions and possible future actions that I view this as a long term hold rather than a likely short term takeover target. I am not particularly focused on where I would move the money if we get taken out, because I don't expect to be.

Great report, all the best to you!

"However, GGP would be insane to agree to such an arrangement, as they also know Hav is worth more."

So? If we are talking about NCM secretly buying shares on the open market, how would that hurt GGP, even if Hav is worth more? How would NCM buying shares be any different from you, or me, or David Beckham or Jeremy Corbyn or a consortium led by Donald Trump and Kim Jong-un buying shares?

I can tell you why NCM might decide to quietly build a stake in GGP. Suppose they don't want GGP to be taken over by someone else (that's pretty credible, right?). What's a good way to protect against that? Why, buy 10-15% of the company, that would make it a lot harder for Barrick or someone else to come raiding.

Why do it quietly? Well, if they announce they are doing it, it will drive the price up, and also it might start the bidding war they don't want to happen -- the whole purpose would be to build a stake that gives them a head start in any bidding war and so scares others off, once it is announced.

Why not just buy newly-issued shares from the company, rather than do it quietly on the open market? Well, perhaps because the company knows that Hav is worth far more than the current SP so won't play ball with NCM. So Shaun tells Sandeep, "If you want shares, buy them on the open market." So maybe that's what Sandeep would do.

I am not saying this has happened, or that I think it will happen, or that I think it is likely or unlikely. I certainly have no knowledge either way. But it wouldn't greatly surprise me to learn NCM is or has been quietly building a stake. There's a logic to it, it's not an unreasonable thing for them to do.

I don't think it in any way precludes them exercising their 5% FMV option. There's no reason they can't do both, and I expect them to exercise that no matter what.

I also don't think it would be an indication that they intend to buy GGP in entirety. There are certainly reasons for them to build a stake even if they have no intent to buy the company. For reasons I've stated in the past, I think a takeover by NCM is unlikely unless they do it as a "white knight" to hold off an attack from another corporate raider.

Everything I am seeing in their behaviour indicates they are happy to see GGP remain independent.

Nice to see Uncle_Doug back with a negative comment about Primark. Seems a likely sign of an impending price rise, but even if it isn't, it's at least reassuring that some things never change. LOL.

@DGR "@spy, @TMT - Not sure that that's even a problem."

I don't think Spy was saying it is a problem, but I sure wasn't. I'm in no hurry.