Anyone Want These Free Bags of Cash?

2018 so far has been disheartening for most commodity stocks.  The commodity stocks that the Horg family owns have declined by even more.  My investment performance since 2006 has declined to an average annual increase of 10.5% (beating all U.S. stock markets, pension funds, and college endowments by just a few percentage points per year).

2009Q1 was an even worse time for everyone not holding assets tied to the value of the U.S. dollar.  Like most, my investment performance had gone negative.  Many sold in the belief that stocks follow the laws of physics and that momentum would drive their stocks ever lower.  I sold, too, but for different reasons.  I saw and still see the stock market not as a mass with momentum, but as a giant Ouija board that fluctuates randomly around fundamental values.  I sold not to join the mass run into U.S. dollars.  I sold simply whatever went down the least in order to buy whatever went down the most.  In other words, I rebalanced.  I recovered, prospered, and started Three-Year Double.

2015 was THE WORST YEAR for my investment performance.  I had moved one hundred percent into gold stocks in February, 2014. 2015 was demonic for gold stocks.  I scoured through every document and video that I could find wondering what the problem was.  I wondered if somebody had genetically modified a goose to lay a golden egg.  I became aware that the ocean contains a lot of gold that had been uneconomic to extract, but I wondered also if somebody had genetically modified microbes to collect ocean gold economically.  I found the concentration of gold in ocean water and calculated that even if microbes could separate gold from ocean water at zero cost, the energy cost to transport the separated gold to a collection point far exceeded the market price of the gold.

2018 has not been nearly as bad for me as 2009 and 2015 were.  But in one regard, 2018 has produced its own brand of insanity.  The Horg family now owns six stocks.  Three of these six stocks (KRLTF, WTRNF, and NWLNF) are now priced below current assets net of all liabilities:

howibeatgold181103a

 

One of these stocks (KRLTF) is now priced below CASH net of all liabilities:

howibeatgold181103b

 

Even in the depths of the 2015 gold stock bear market, I knew of no stock priced below current assets, let alone cash, net of all liabilities.  The stock that came closest to this level of insanity was Northern Freegold.  Below is part of an exchange I had comparing the cash of Northern Freegold to the cash of Kaminak Gold:

stockhouse150821

 

Kaminak Gold went on to do well and Goldcorp took it over.  Northern Freegold went on to do even better, and Goldcorp took it over as well.

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Let Them Eat Platinum!

Robert Mugabe is a misunderstood genius.  His management of Zimbabwe’s economy did ruin production of food, but did wonders for production of platinum.

Slide 24 in this Japanese government document shows Zimbabwe platinum production growing from 7 kg in 1996 to 6,489 kg in 2009:

platinumjapan

 

Table 5 in this U.S. government document shows platinum production continuing to grow in Zimbabwe from 6,849 kgs in 2009 to 11,000 kgs in 2012:

platinumusa

 

Page 5 in this Zimbabwean government document shows platinum production continuing to grow to over 12,000 kgs in 2015:

platinumzimbabwe

 

Have any of Mugabe’s naysayers ever tried tasting platinum?  It’s yummy!

Potash: How Undervalued Can One Commodity Get?

Potash in February, 2017 hit its lowest price in terms of U.S. dollars since September, 2007:

potashdollarlow

 

But potash seven months later in September, 2017 hit its lowest price in terms of gold in over thirty years and has since bounced back only 3.32%:

potashgoldgraph

 

Click here to get the raw data that I got from indexmundi.com and looks like this:

potashgoldrawdata

 

 

Why I Seek No Compensation

Why I Seek No Compensation for Investment Advice, and Why You Should Not Offer Compensation for Investment Advice:

If you lack confidence in your ability to manage your own investments, then I think that you should get an ETF based on an index.  If you cannot competently choose your own investments, then you surely cannot competently choose the person to choose your investments.

What ETFs to purchase? I recommend RSP, VB, and VSS.

 

Western Resources Trading for Less Than Cash Net of Liabilities

Would you pay forty-one dollars for a bag of fifty-four one-dollar bills?  Western Resources is the bag.

Western Resources as of December 31, 2017 had current assets of C$55,036,237 and total liabilities of only C$567,127. See page 3 of the FINANCIAL STATEMENTS at SEDAR:

wtrnfbalancesheet171231

Western Resources is split into Shares Outstanding of 93,437,110 and Stock Options Outstanding of 930,000.  So the fully diluted shares would be 93,437,110 + 930,000 = 94,367,110:

wtrnfsharesoutstanding170930

So the current assets net of all liabilities per share would be (C$55,036,237 – C$567,127) / (94,367,110 shares) = C$0.5772.  Current assets is a balance sheet account that represents the value of all assets that can reasonably expect to be converted into cash within one year:

investopediacurrentassets

Western Resources as of February 16, 2018 was selling for C$0.43 per share:

wtrnfstockhouse180216

or (C$0.43 per share) x (94,367,110 shares) = C$40,557,857 for the whole company.

So C$40,557,857 gets you (C$55,036,237 – C$567,127) = C$54,569,110 cash net of liabilities.

BUT THAT’S NOT ALL!  YOU ALSO GET . . .

a potash deposit determined by a feasibility study to be worth C$2.44 billion AFTER-TAX:

wtrnffeasibilitystudy

Do insiders own any shares?  Yes, they do.  The corporate presentation on page 3 shows that “Strategic Investors hold approx. 65.8% of the company’s outstanding shares”:

wtrnfinsiders

And Rio Tinto will be very cooperative:

wtrnfriotinto1of2

wtrnfriotinto2of2

Good Times Ahead for Zimbabwe? How About South Africa?

Now that Mugabe is gone from power in Zimbabwe, can the people there hope for better times ahead?  The following video strongly suggests so:

Because at least some people in Zimbabwe have gotten the idea that government-mandated confiscation of property and inflation of the currency supply does no good, perhaps voters in neighboring South Africa will learn from the harsh experience of Zimbabwe under Mugabe without making the same mistakes themselves.

Good times ahead for Eastern Platinum?