Medusa Share Discussion Threads

[eintracht] 04/2/2016 22:15

Andover was the pits of the earth, I miss it like a hole in the head. Bargara on the other hand is paradise. 500M from the Beach, 300M from the first tee of the golf club. 365 days a year shorts weather. What more could you want.

[justinjjbuk] 04/2/2016 21:35

Queensland boy now :) It's a long way from Andover (and a lot better weather).

[eintracht] 04/2/2016 19:40

Chip, I come from Hampshire. Born and bred in Andover !!! Now I'm near Bundaberg, QLD.

[tightfist] 04/2/2016 16:33

Thanks for that Chip; maybe I am getting confused with deka?

Cheers, tightfist

[chipperfrd] 04/2/2016 14:06

Just for clarity - I am in Hampshire.
Chip

[tightfist] 04/2/2016 12:24

Hi Justin,

I am based in East Midlands UK, I sense that Chip is based North of here. eintract is in Oz, I am not sure which other posters expressed interest in the visit.

My main objective in a visit would be renew my belief in MML. I take great store by meeting people, listening and watching carefully, and consistent follow-through afterwards - RG (and GD before him) passed that test with flying colours.

The events of the last three months have unsettled me. For example, you mention the ongoing mining review; I noted that in last week's Q2 report a caveat that 2016 production guidance is "subject to a review of operations, currently underway". With only five months left that certainly doesn't inspire confidence in me. Hopefully I would want to coincide with a CEO visit to the Co-O site, and ideally Gary Powell too.

From your fund background can you speculate on the Ruffer announcement. On the face of it MML now seems an obscure company for Ruffer to take a position in? Hopefully others will take note and encourage the new CEO to visit London, which must be a good thing.

Cheers, tightfist

[justinjjbuk] 04/2/2016 10:49

tightfist

Thanks for the kind comments. As regards the mine visit, I guess that they wouldn't want to do this until the mining review is done and the CEO nailed down.

Perhaps, to start with, I could drop them a line and float the idea. I am curious to know where all the regular posters on this board are based. I am based in the UK, but I sense that some others are in Aus or elsewhere?

Justin

[tightfist] 04/2/2016 10:39

Hi Justin,

Many thanks for all your great posts over the past few days - most thought provoking stuff I have seen for quite a while.

In the short-term the share price is moving ahead and has broken the 41c level on reasonable (nowadays!) volume. Let's not forget the mine visit idea, we need to build confidence and assess how long MML's legs are!

Cheers, tightfist

[chipperfrd] 04/2/2016 08:57

Ditto with DGO back then Niels!

Are you considering adding any O&G stocks? I was planning to review a few before the end of 2016.
Chip

[nielsc] 04/2/2016 08:44

justin,

I liked the insight into "institutional puking".

This is exactly what happened with Dragon Oil(DGO) back in 2008. Forced redemptions caused the price to drop from £5 to £1 at which point the company was holding cash worth round 70% of the company.
It led to a very profitable investment with my final batch being sold at £8 :-)

With MML I have been accumulating at these levels and I don't think it too far fetched to see MML doing something similar to DGO over the next couple of years with a firming gold price.

Cheers,
Niels

[atlantic57] 03/2/2016 18:41

The obvious catalyst that could ignite gold is the fact that stovk markets have been falling sharply across the globe since1 January .

Also the bank if Japan move provided just a 24 hour sugar feed for markets.
This suggests that central banks are indeed running out of ammunition and judgement day us looming.

With geo political risk Also in the mix perhaps this is giving gold a boost.
We will need more time to assess.

[justinjjbuk] 03/2/2016 17:47

Big question is how gold responds to US non-farm payrolls on Friday. A big payroll number would buttress the likelihood of further Fed hikes and put pressure on gold. I think it unlikely, but NFP is a very volatile data series, so you never know. Obviously, a weak number should support gold above the 200 day moving average.

That said, I like to observe price action when there is no positive catalyst. So if NFP is inline with consensus but gold still remains firm, that would be uber-bullish to me. Would show underlying buying exists that is not reliant on any kind of supportive news catalyst.

[roguetreader] 03/2/2016 17:10

Justin
Yes, we've been here before the question is can it stay above the 200mda or will it get pushed back down yet again; the $64k question
RT

[justinjjbuk] 03/2/2016 15:46

RT

Gold acting very strong. Looks like it has decisively broken through resistance at $1,130. And has gone through its 200 day moving average. Let's hope it holds above it, which would then suck in all the technical traders on to the buy side.

[roguetreader] 03/2/2016 15:18

Looks like gold is making a determined effort to get above $1130, could see volatility increasing in the next few days.
RT

[justinjjbuk] 03/2/2016 13:08

Nothing like MML, but I am looking. Will let you know if I find any more diamonds in the rough :}

[abacus23] 03/2/2016 12:59

Justinjjbuk,

On another note, do you have any other super stocks that are currently unloved?

[abacus23] 03/2/2016 12:57

roguetreader 3 Feb'16 - 12:37 - 35652 of 35652 0 0

Justin, fascinating insight, great post
RT

Second that, great post, 35651, Justinjjbuk.

[roguetreader] 03/2/2016 12:37

Justin, fascinating insight, great post
RT

[justinjjbuk] 03/2/2016 12:20

The substantial holding announcement by Ruffer is quite intriguing. If you look at their acquisition sheet, they were aggressively accumulating over a period when MML's share price has been lagging the general rebound in many gold miners.

Take, for example, Ruffer's last entry: a purchase of 214k shares on 1 Feb. On that day, according to ASX, 580k share were traded and the stock price FELL from 38 cents to 36.5 cents. Note that Ruffer's purchase was equivalent to just under 40% of that day's volume. In my experience as an ex-fund manager, you generally are very wary over moving above 20% of average daily volume when accumulating a position as this pushes the price. So Ruffer was double this but the stock price still went down.

What this means is that we are very likely still seeing what we used to charmingly call in the trade "institutional puking". Institutions "puke" when they are forced to sell regardless of what their view is on a particular stock. They do this for two main reasons: 1) to raise proceeds to meet redemption requests and 2) to remove names from their holdings list so as to avoid getting beaten up by their investors at their regular investor meetings.

As you can imagine, taking an institutional investor meeting with MML in your portfolio will be a very painful experience. Your investor will one by one go through all your main losers for the period and ask you to justify each investment thesis. On a percentage basis, MML will probably be a the top of the percentage loser lists and will elicit a barrage of hostile questioning.

So even if you love a stock, you must always calculate whether having to defend that stock to an investor is a good tactical move. Even if you think a particular investment is the best opportunity in a life time, if your investor thinks you are a moron for investing in it, the day after the meeting they will file a redemption notice, and a month or two later you will have to sell the stock anyway to raise proceeds to meet the redemption.

What's more, your boss will likely invite you into the corner office and ask you to justify why you just lost the firm a major account. So your heroic defence of, say, MML in the meeting will have turned out to be a complete waste of time, caused an investment outflow and hurt your career within the firm.

That's why being a fund manager is just as much about managing your investors' perceptions of your portfolio (and your boss' perception of your portfolio) as much as managing the portfolio itself (and this is one reason why institutions generally underperform their index benchmarks).

The good news is that, just like in real life, if you keep 'puking' eventually there will be nothing left to puke. I thought all the institutions that had wanted to get out of MML would have done so by now, but the Ruffer buying pattern suggests that is not the case.

So a little more patience may be required for MML with respect to matters completely separate from management, operations and so on.

BTW, this institutional behaviour is one of the few things that works in favour of retail investors. Obviously, the institutions will usually have a lot more information than us. However, their decision to sell is often out of their hands for the reasons above. For a retail investor, the buy or sell decision is his or hers alone. For contrarian investing, this is a huge advantage.

[chipperfrd] 03/2/2016 11:17

No problem guys. I have every intention of trying to keep this thread and my input into it, just the way it has always been.

It is really difficult being a contrarian. Basically one is always 'wrong' until the tide turns. But this down-turn in gold/silver and the far worse drops in the miners has been particularly hard on everyone. So not surprising that the resulting pain gets reflected in both the flagging optimism and posting activity on boards such as this.

All the best
Chip

[speedsgh] 03/2/2016 10:31

I second the atlantic's/eintracht's comments above. Chip/steve - you're both respected posters; this thread has been a rare shining example amongst a sea of far less shining examples (and that's being polite) on advfn. Respectful with much research shared by several contributors. Can't we keep it that way?

[eintracht] 03/2/2016 06:05

Crack the champagne - we finished above 40c !!!

[eintracht] 02/2/2016 23:19

New substantial share holder just announced here in Oz. Ruffer LLP have been accumulating since early October and have just over 5% of shares. Got to be a positive ?

[eintracht] 02/2/2016 20:50

Last day of the month, last week of the month, does it really matter? There are more important things to debate here than that.