World Of Wallstreet

"Silver Resource Corp" (GORO) NI43-101 Report

Gold Resource Corp did a press release of their NI43-101 report yesterday. GORO is my single biggest stock holding. Its also my single biggest investment winner since I bought in big somewhere in the $4/share range (more than a six-bagger).

I would say the numbers came out about as expected. Here's a quick analysis of the numbers. Italicised numbers are straight from the press release. All other values are calculated from those numbers, current metals prices and a market cap of 1.46B$.

I looked at the 7% g/tonne cutoff grade numbers because they claim to be a high-grade gold miner. Here's my observations (based on numbers in the spreadsheet)

• Cell F7 - Silver Resource Corp - GORO is much more (roughly 2 to 1) of a Silver Miner than a gold miner at current prices. 
• Cells L6, M6 - Either GORO is going to actually mine a lot more metals than is in this report or GORO is quite overvalued. Maintaining and increasing market value depends on exploration results. The deposit is open along strike and at depth and they have been drilling for months and found a third vein which will, over time, increase the amount of metals to be mined. In addition, GORO has other prospective properties nearby. Still, with GORO doing quite well recently on increasing production my main concern has been the lack of specific, individual drill-hole type exploration results. I expect that there is more metal to be mined and I remain an admirer of GORO's stockholder friendliness, mining and exploration competency, and the rocks on their properties. I expect I'll hold my current out-sized position.

MontyHigh, www.worldofwallstreet.us

Gold Price Manipulated Down By Bankster-Controlled Corporate Media

Is it a conspiracy or just a screwup? :) I vote screwup.

MontyHigh, www.worldofwallstreet.us

Bernanke Speaks: The Stick That Beats Gold Down

Lately, the excuse for a gold bear raid has been "Bernanke Speaks". This has been used effectively the last two months to spank me and my "go long the day after gold options expiration" trade. This month is different: Bernanke speaks on Gold Options Expiration day. So, the damage may be done prior to my usual entry point.

MontyHigh, www.worldofwallstreet.us

What To Do If S&P 500 April Is A Down Month?

It looks like the general stock market may have a its first down month in a while this month. I don't own any of this, but I thought it worth taking a look at. What happens after the first down month after one or more up months?

Well, here's what's happened lately:

Even including the 2008 crash months the average is a gain if you hold on tight for two months. Post-crash (6/1/2009 on) the results have been quite satisfying with only one trade for a loss out of seven. Think this might be worth a twirl? Maybe worth a twirl as long as you don't think this is the start of another 2008-like situation.

MontyHigh, www.worldofwallstreet.us

Peak Oil Trade: Suncor vs S&P500 Ratio

I haven't made much real money on the Peak Oil investing theme, but I'm on the lookout for a good opportunity. I think Peak Oil is real and significant, but that every time it starts to bite it takes out the whole world economy. So, the question is, how should one trade it?

If Peak Oil is real, then eventually high-cost oil producers (such as SU aka Suncor Energy) should out-perform the general stock market ($SPX). As you can see in the above chart that was definitely the case from around 1999 to mid-2008, but since then Suncor has lagged the general stock market.

The chart uses a 15% envelope around the 52-week (one year average) of the relative performance of SU to the SPX. As you can see, for the last year Suncor has been underperforming the SPX by more than 15%. This has occurred twice before (1999 and late 2008 green boxes) with two other cases where it almost underperformed by that much (2000 and 2007 gray boxes).

Here's a trading system:

• Enter on the first weekly uptick of the ratio from a touch or below the lower envelope and exit the trade on a touch or piercing of the upper envelope. You can enter either long SU or a pair trade long SU / short S&P 500.
• Exit on the weekly close of a touch or piercing of the upper envelope.

The four previous occasions for this yielded nicely positive results with trades of 6 months duration or less. The current situation had an enter signal around the end of Oct 2011. It looks like there is still time to enter this trade even though Suncor is around 16% off its lows.

I expect I'll watch this to see if Suncor dives into the "unexpected" zone (e.g. sub $25) and try to accumulate some down there.

Think I'll get a fill? Think this way of trading Peak Oil and finding underperforming energy stocks has any merit? Is it different this time? Is the current situation significantly different from all four preceding situations?

MontyHigh, www.worldofwallstreet.us

P.S., Here's my defense regarding the idea that I am crass and self-centered trying to figure out how "trade" something like Peak Oil:

• I'm just a feeble little guy beyond his prime. I don't expect I can change the world.
• Trading Peak Oil is one thing I can do to accumulate resources to help others when times get tougher.
• Putting more attention / resources on Peak Oil related enterprises should do something to increase the supply of liquid fuels. The current situation where SUNCOR is undervalued is depriving it and other enterprises of the capital needed to create solutions to mitigate Peak Oil.

Gold Stocks Ready For A Pop?

Here's a variation on a chart I've been following. This time we include a gold stocks index.

Looks to me like for the four prior occasions where the S&P 500 became overbought relative to commodities ($SPX:$CCI RSI > 75) that not only did gold pop, but also gold stocks.

Here's a table with some details of the four prior events:

I consider these results to be reasonably bullish for gold stocks.

MontyHigh, www.worldofwallstreet.us