Skip to main content

Q: Did you see this today in Ask Fleck on Fred?

J: I did. Thanks. Totally agree with how he sees gold and the miners right now.

Q: I email’d you a few months ago, and you gave me some great advice. I took your advice and read all Warren Buffett’s annual letters. I’ve read some of the books you mentioned as well, and a couple other different ones.¬†Also, referring to the “Market Wizards” series, is this the correct one?

Thank you as always.

J: Yep. That’s it! Glad to help.

Q: Not sure I understand why you plan to sell NGD in a couple of weeks, after a quick pop. I think we both agree it’s a very cheap stock with high growth potential. But why plan to sell so fast?

You mentioned Buffett in your influence. I think he would argue that the way to make a lot of money is to hold the dirt cheap stuff until you make a killing. And you have the tax advantage if you hold long term vs some back and forth.

NGD is dirt cheap and would likely benefit from higher gold prices. We have an almost perfect set up for higher gold prices both ST and LT. ST with depressed prices, favorable seasonality, overvalued stock market and geopolitical/debt crisis instability. LT with money debasement throughout developed world (QE4 now more likely than rate increase) and very favorable supply and demand (strong demand from Asia, little exploration/no new discovery, current extraction cost close or higher to spot for many miners, etc).

I would not be surprised to see NGD at a much higher price a couple of years from now.

Just some thoughts. Love what you are doing!

J: I totally agree. I think you may have missed my point. I currently have a long-term investment position (5%) and have just added a trading position (5%). The time frame for the former is much longer than that for the latter. With a larger, more established company I would have no problem making 10% of my portfolio a long-term investment. However, because this is more of a speculative company, in my mind, 5% is about is large as I’m comfortable committing to a long-term position. The other 5% I differentiate as a trading position because if I’m wrong I’m not comfortable being wrong on a bigger scale than that in this name. Having said all that, I agree with everything else you wrote.