Anglo Asian Mining Share Discussion Threads

[2sporrans] 07/8/2018 19:02

Yeah, it's funny [not] how often one's intuitions turn out to be early warning signals one regrets not heeding Lefrene.

For a spot of levity, here's a take on the RBS bailout [seeing how my memories got stirred] some wag posted way back; goes to the Queen song "Another One Bites The Dust":

Oh well - Another one bites the dust!

Sir Tom and Fred walk warily down the street,
With their hats pulled way down low
Ain't no sound but the sound of their conniving feet,
De la Rue are you ready to go?
Are you all ready, Are you ready for this
Are you hanging on the edge of your seats
Out of the print room pound notes rip
To the sound of the bailout beat


RBS bites the dust
RBS bites the dust
Well another bank gone, yet another one gone
RBS bites the dust
Hey, are they gonna get your cash too
When RBS bites the dust

GB, how do you think we're going to get along,
Without you, when you're gone
You’re gonna tax us for everything that we have,
And kick us right in the groin

Are you happy now, are you satisfied
How long can you stand the heat
While out of the doorway the pound notes rip
To the sound of the bailout beat


RBS bites the dust
RBS bites the dust
RBS bites the dust
RBS bites the dust
There are plenty of ways you can screw a man
And bring his net worth to the ground
You can cheat him
You can fleece him
You can buy toxic financial garbage and leave him
But now its the time to mark em down
But are you ready, cause they’re ready for you
Will you be standing on our own two feet
Out of the doorway political bullets rip
To the new bank bailout beat

[lefrene] 07/8/2018 17:58

2sporrans, it took me a long time to trust my own judgement. That's the problem with looking too much at bulletin boards, the confusion of real information mixed in with devious persons with hidden agenda's.

It's useful to go to AGMs to get a feel for the quality of the persons on the Board, and there are some real light weights out there, just remittance men who bring no value to the company. Each time I have doubted my own suspicions and instincts it has cost me money, and some big slugs of it too.

Actually it is now rare to come across genuinely well run businesses by people who have real skills and truly know what they are doing. Sadly as we see with AAZ it's a very rare beast, and yet the market seems not to trust it as it seems too good to be true.

Perhaps the divi and news of expanding resources will finally get the attention this company deserves?

[2sporrans] 07/8/2018 17:21

An excellent point by Lefrene.
Even the most regulated, shareholder accountable companies can be run by a bunch of Shysters who will conceal their risky gambles in ingenious/underhand ways; that's before during and after [to extent they can] they go badly wrong.
RBS was a classic case in point.

[celeritas] 07/8/2018 15:51

wanobi, wcc went from 70p to 1200, I sold at stages above 500p
Its an old thread and as you say its now 2233.
I'm on from early on in this thread.


I'm also on this one.


You'll find mattjos appears on the first one.

[lefrene] 07/8/2018 15:33

GoodGrief, sounds like you once met Tony Blair :¬) His track record turned out to be the inverse of the rhetoric on all levels.

[wanobi] 07/8/2018 15:14

GG - cheers, will do..

[goodgrief] 07/8/2018 15:10

And beware of stocks with bulletin boards lead by a prophet-type figure who brooks no criticism and has a messianic following. Such boards mostly get caught up in a dangerous group-think and unrealistic dreams of the potential returns. Though this generally applies to pre-revenue stocks...

[wanobi] 07/8/2018 15:09

lef, also many thanx for your view... I feel like I'm dreaming a bit here right now,,, so many positives about aaz...

[wanobi] 07/8/2018 15:07

2sp, once again, many many thanx for such detailed insightful posts!! If you were selling me aaz, like a car, I'd be buying 10 of them immediately!! I can now certainly appreciate the level of research and detail you've gone to, to be as sure as you can be that aaz is a good long term investment... your confidence in aaz comes across in bucketful's...:-) That said, I appreciate the caveat that nothing is for sure and something can always go wrong... cheers... I would say so far, that all the other threads I've looked at seem very hostile!!!

[wanobi] 07/8/2018 14:59

Bo, interesting.... right now, I've done nothing but read and talk to you guys :-)

[conundrum] 07/8/2018 14:58

Managed to buy a few more at just under 42p, despite indicative prices on ADVFN and my online trading account both showing indicative price of 41 - 43.

Not sure if I was fortunate or if there are more available at that price

[wanobi] 07/8/2018 14:58

S0lis, many thanx, no such luck, just a pot of cash which have chosen to manage :-)

[wanobi] 07/8/2018 14:57

Cel, many thanx, 40's & I too moved to a sipp (with HL) hence now sat here wondering how best to invest etc... kenz, wow, as sebV used to say (i think it was him) "now that's what I'm talking about" 1 to 9x,, amazing returns, although I understand it's spotting the opportunity in the first place, buying in at the right time and holding etc etc.... wcc, found old thread, now 2233? can't seem to see a chart that makes any sense!?

[lefrene] 07/8/2018 14:43

Anyone who has been in the markets for a few years will have made awful mistakes simply because unless you are on the inside of a company it's near impossible to know what is really going on, especially with AiM where charlatans and deceivers prosper unmolested by the law.

The one thing I have learnt is, that if I find myself feeling the need to start digging deeper because I am unsure what the directors are REALLY up to, then I should just sell and PROTECT my capital. I might miss out on a good gain, but at least my powder is dry to prospect elsewhere.

As for AAZ, I concur with others who post here, it has an excellent management record, highly skilled who deliver on the talk without fail, and some of whom have put a lot of their own money on the line. It seems strange that the share price remains subdued, but all else is firing on all cylinders and in due course regardless of what is holding it back now, the price will rise to reflect the true and real value that is here. I am actually surprised now that this business has been brought to fruition, that there hasn't been a bid for it. At current production margins the whole shooting match would likely pay for itself in three years. So I'm happy to wait and draw a dividend and see how long it takes the market to arrive at a fair value.

[bo doodak] 07/8/2018 14:18

Wanobi,

One of the hardest lessons to learn is that there are times when it best to do nothing, strange as that might seem. Can often be a very profitable strategy!

[celeritas] 07/8/2018 13:41

Well its handy with huge dollar reserves and gold at 1213 to buy the real stuff while the Yanks play with paper.

[2sporrans] 07/8/2018 13:40

Gawd, that was a tome.

Maybe should have put the AAZ part in separate post, so here goes:

So, let's try and make these observations in my post above relate to AAZ here:

What I see, for what it's worth:

1 The Gold market pretty much going sideways past 2+half years; not expecting much change this/next year; copper in ascendancy looking 5 yr ahead.

2. Gold miners continuing to underperform the Gold market.
They had over-invested in duff ventures the past decade [2a], also loads of new shares issued, diluting the pool for existing holders [2b].
Investors, once bitten remain shy.

1 is roughly neutral for AAZ; 2 a decided discounter/drag .

AAZ an exception to both these 2 Cardinal sins as 2a+b:

2a. They invested very heavily in ~$100-mn plant + infrastructure, especially 2013-15, after which carried ~$50-mn debt, av. 12% interest, tight repayment schedule, during and up to some time in 2016, after when the debt got progressively paid down.
Now there is less than $10mn debt @7%, unsecured [!] and at least that much cash in the bank; so a tad in SURPLUS today.
+ They have kept the mine life at several year and even turned around a newly discovered one - Ugur - in about a year to highly profitable production.
AND their gold production is efficient, low cost now - thanks to their investments - with an AISC of $600/oz. That Wanobi means they are not only producing an oz of gold for $600-oz and selling it for over $1200/oz, they are finding another oz of gold in the ground to replace it.

2b. There has been a token amount of new share issuance over all the years since IPO.
This is almost unheard of for small gold miners!
It helps that the CEO owns 29% of the shares.
Now he doesn't want any dilution does he!
Nor do the other directors with large or substantial [and growing for some] share holdings.
THE PI SHAREHOLDER AND CEO-DIRECTORS INTERESTS ARE VERY ALLIGNED.
Not only this, but now AAZ is all set to pay dividend, later this year.
Better still, they intend for the dividend to be SUSTAINABLE over years ahead and all they are doing is geared to a long term resource growth and future mining it.
In short, they are going to RETURN ££ value to their investors, especially the long term ones, rather than fleece them for capital raisings as par for the small Gold miner course.

What is AAZ worth today:
Not quite $50-mn capitalisation.
About the next 2 years projected net cashflow.

Now I'm not say it cannot all go pear shaped.
Yes it can, however implausible that looks just now.
Yet for sure, if you are looking for a play on ALPHA, with good forward odds, imho you have a very good prospect with AAZ.
And that v any reasonably relevant benchmark you want to choose.
It will be ALPHA big time if their $18-mn exploration programme reveals resources in line with what the Soviets found, let alone another Ugur or 3 on top.

[2sporrans] 07/8/2018 13:35

Good series of posts Celeritas.

Taking your observations on fear:

"its amazing what fear makes you do"
and
"It seems you are a bit of a worrier [Wanobi] so maybe give the lot to the fund managers."

This is sound advice, especially as I'd be amazed to learn, as a fact, that more than a few - 10% at very most - individual, private investors consistently, over decades, outperform benchmarks such as related indices or "The funds" - whatever those are.

After all, even the most able fund managers [+teams] rarely manage unbroken records of outperformance of their benchmarks and peers over decade plus or even 5 yr+ periods.
Anthony Bolton was generally rated as the most successful UK fund manager, in terms of consistent, ongoing, outperformance going back maybe the past 50 years.
His record extended well over 20 years; with Fidelity mostly was it?
Anyway, he couldn't resist a comeback [was it 2010 or thereabouts]; tried to replicate similar success with a China fund, using similar value investing strategies and techniques as he has so successfully in UK orientated shares.
While he was doing OK after a couple of poor years 'initiation', AB never made the top ratings in Chinese or Far East funds. He quietly entered permanent retirement a few years back; his successor[s] did a little better I think.
Or what about Neil Woodford ?
His outperformance with Perpetual garnered a huge PI following.
Indeed, even most of his team followed him after he departed Perpetual to set up his own much trumpeted fund.
Then he promptly fell flat on his face!
In 2016 and 2017, the fund returned just 3.2% and 0.8%.
And when I looked in February, things had gotten worse.

My point about Bolton and Woodford is that if even they can end up blotting their erstwhile outstanding records, the 'average' Private Investor has no hope of beating the same benchmarks consistently over many years.

Having said, Terrapol is spot on when he advises you Wanobi that you will learn a lot and fast by having skin in the game.
You will learn a lot about yourself - not least your emotions and hopefully to curb them, fear, greed and hubris alike - by playing a game, one where YOU do the research, decide on strategems at so forth.
What you learn will assist you in your selection of funds that you have sensibly allotted 75% weight for in your portfolio build.
But maybe that should - for you - be as much as 90%?

Another basic facet of Investment Assets.
There is always a trade-off between risk and reward.
This fact coupled up with the very cyclical nature of markets and the assets therin lends itself to some deceptions where [out]performance is concerned.
If you are fortunate and buy a load of assets at the beginning of a multi-year bull cycle [or a new product/service phase - can be obsolesence!] - e.g. one where the assets are underpinned by rapid growth for their relevant companies products/services will be great for growth stocks - there will, by their very nature be those companies/shares that will tend to outperform their peers by a considerable margin in this rising market. Like in this example, smaller tend to grow faster than bigger....ditto more highly geared [with debt, capital or leverage}
In the investment world, such outperformance is known as "Beta" and isn't that hard to seek out.
There is a trap for the naive:
Beta works the same, inversely, on the downside.
High Beta funds crash the worst during corrections and bear markets.
Though, over a series of full cycles they MAY still outperform benchmarks and more staid, lower risk plays, this is a matter of probabilities not certainties.

What investors seek most is the holy grail of sustained "Alpha", where the asset outperforms in ALL market conditions; i.e. it rises faster when the general market is rising and falls less - or even keeps rising but slower - when the market reverses.

So, let's try and make these observations relate to AAZ here:

What I see, for what it's worth:

1 The Gold market pretty much going sideways past 2+half years; not expecting much change this/next year; copper in ascendancy looking 5 yr ahead.

2. Gold miners continuing to underperform the Gold market.
They had over-invested in duff ventures the past decade [2a], also loads of new shares issued, diluting the pool for existing holders [2b].
Investors, once bitten remain shy.

1 is roughly neutral for AAZ; 2 a decided discounter/drag .

AAZ an exception to both these 2 Cardinal sins as 2a+b:

2a. They invested very heavily in ~$100-mn plant + infrastructure, especially 2013-15, after which carried ~$50-mn debt, av. 12% interest, tight repayment schedule, during and up to some time in 2016, after when the debt got progressively paid down.
Now there is less than $10mn debt @7%, unsecured [!] and at least that much cash in the bank; so a tad in SURPLUS today.
+ They have kept the mine life at several year and even turned around a newly discovered one - Ugur - in about a year to highly profitable production.
AND their gold production is efficient, low cost now - thanks to their investments - with an AISC of $600/oz. That Wanobi means they are not only producing an oz of gold for $600-oz and selling it for over $1200/oz, they are finding another oz of gold in the ground to replace it.

2b. There has been a token amount of new share issuance over all the years since IPO.
This is almost unheard of for small gold miners!
It helps that the CEO owns 29% of the shares.
Now he doesn't want any dilution does he!
Nor do the other directors with large or substantial [and growing for some] share holdings.
THE PI SHAREHOLDER AND CEO-DIRECTORS INTERESTS ARE VERY ALLIGNED.
Not only this, but now AAZ is all set to pay dividend, later this year.
Better still, they intend for the dividend to be SUSTAINABLE over years ahead and all they are doing is geared to a long term resource growth and future mining it.
In short, they are going to RETURN ££ value to their investors, especially the long term ones, rather than fleece them for capital raisings as par for the small Gold miner course.

What is AAZ worth today:
Not quite $50-mn capitalisation.
About the next 2 years projected net cashflow.

Now I'm not say it cannot all go pear shaped.
Yes it can, however implausible that looks just now.
Yet for sure, if you are looking for a play on ALPHA, with good forward odds, imho you have a very good prospect with AAZ.
And that v any reasonably relevant benchmark you want to choose.
It will be ALPHA big time if their $18-mn exploration programme reveals resources in line with what the Soviets found, let alone another Ugur or 3 on top.

[mattjos] 07/8/2018 13:28

CNYUSD up 0.5% today .. gold up identical 0.5%.Good may be officially priced in US$ but, the relative price of Yuan seems to be having a greater effect on price of gold recently .... is that because the Chinese want the physical whilst the USA markets more paper oriented?

[s0lis] 07/8/2018 12:31

celeritas/wanobi

The normal attitude to risk is to reduce it as you near retirement. However, there is a train of thought that you can ignore that as it depends on the size of your pot but also on your confirmed pension. If you are fortunate enough to have an annuity or a defined benefit pension that is inflation proofed (wholly or to some extent) that covers all your requirements and your have an emergency fund for unforseen hiccups, then I would say that you can continue with a more risky portfolio (with some in AIM stocks as they do not fall into the IHT trap).

[celeritas] 07/8/2018 11:08

Also hold your ground, dont worry when the price falls below your avg, try not to be scared out. I was with Kenz in the 08 crash, sold circa 110 as I thought the financial world was done for, its amazing what fear makes you do. It eventually sold for over 900p.

[celeritas] 07/8/2018 11:02

Strategy, I cant say I have one as I tend to go with the flow. I try to hunt out what I think are undervalued stocks like AAZ. I've had many over the years, wcc was probably the best one but I think aaz could very easily do similar. I suppose that is a stategy.

I moved my pension from a managed pension to a sipp, I've certainty beaten the old managed pension by at least double.

It also depends on you age for risk, as you get closer to retirement then dividend paying stocks are preferential.

How old are you wanobi, decade will do? I'd say 20s 30s and 40s have more risk, 50s then probably look a little to cut it down. 60s,70s, take income with the odd risk for a bit of fun.

[wanobi] 07/8/2018 10:47

Hi Cel, you're right, I won't know till I try and initially I will buy 1 or 2 stocks only and see how it goes for a year or so... if I lose everything on those it won't cause me a problem and hopefully I won't be worrying about things for that reason.. I'd like to ask you so many questions; however, I don't want to irritate you so please feel free to tell me not to ask etc... I'm also aware that I do not understand the unwritten rules on this thread and others,, as to what can be asked and what shouldn't be asked etc,,, so,,, please excuse me if I overstep the mark so to speak...

1 - what's your top line risk strategy?

2 - what's been your overall % return on your chosen stocks since you've been doing this?

I'm presuming you've beaten the funds else why would you be doing this, unless its just for fun etc.

Cheers W

[celeritas] 07/8/2018 10:30

wanobi

I would also see the 75% vs 25% as a challenge, can I beat the funds.
You have a handle on your risk profile, 5% each, but you'll never know until you buy your first stock if you are cut out for it. It seems you are a bit of a worrier so maybe give the lot to the fund managers.