Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
2014 the year of the miner
Old 12-31-2013, 11:23 PM   #1
Thinks s/he gets paid by the post
 
Join Date: Sep 2012
Location: Seattle
Posts: 2,906
2014 the year of the miner

At least for those mining stocks that survive.

There are some really beaten down mining stocks. I think there are some that have been thrown out with the bathwater by mistake. Will need to do a bit more research but 2014 could be a profitable year for an investment.
__________________

__________________
Fermion is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-01-2014, 12:52 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Mining is a difficult business. Environmental regulations, union contracts, geological challenges, logistical issues, the roof falling in, you name it. All of this is in an environment of highly volatile commodity prices. Ugh. I have fooled with miners in the past and they are tough to make money on. If you want to make sure you are trafficking in a name you know will survive, pick the company that is the lowest on the cost curve. If you think you can call the upward turn in the price of the commodity being mined, buy the company that will just barely survive the downturn and which everyone is convinced will die (i.e. very cheap equity).

Much luck to you. I m just happy I never put my own money into miners.
__________________

__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 01-01-2014, 09:00 AM   #3
Recycles dryer sheets
Rothman's Avatar
 
Join Date: Apr 2013
Posts: 249
In report I heard on CNBC yesterday the price of gold has fallen below mining replacement costs, that means more companies will fail in short term. Until that report I was thinking maybe this was a sure bottom to buy into. Given company specific risk now I'd lean towards commodity index funds as a play on the global recovery.
__________________
Rothman is offline   Reply With Quote
Old 01-01-2014, 09:11 AM   #4
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: The Woodlands, TX
Posts: 7,186
Since steel production is up, and so are some steel stocks, I would have a look at companies that mine and sell metallurgical coal. Also, if global demand for goods is up, and China growth is real and positive, copper may be a good place to invest. FCX (Freport) is a good candidate and they also have a recent oil & gas business, which may provide good cash flow.

Gold miners are not on my list of favorites as they are very speculative and gold may see a downtrend this year with a booming global economy.
__________________
aja8888 is offline   Reply With Quote
Old 01-17-2014, 07:45 PM   #5
Recycles dryer sheets
JacqJolie's Avatar
 
Join Date: May 2009
Posts: 159
Quote:
Originally Posted by Fermion View Post
At least for those mining stocks that survive.

There are some really beaten down mining stocks. I think there are some that have been thrown out with the bathwater by mistake. Will need to do a bit more research but 2014 could be a profitable year for an investment.
Well, I was one of the people that put quite a bunch into GDXJ, Goldcorp, Yamana and a few others around Xmas / New Years for myself and my son. Am up about 15-20% depending on the co. - any thoughts on timing on the sale side in the sector? Things are moving a little faster than I expected them to, particularly today. I usually take about 25% off the table at a 25% gain, 50% at 50% gain and then sell the rest at 100% or hitting close to the 52W high (doesn't happen very often). But usually things don't move this quickly except for takeover situations. Most stocks I buy have a dividend, so I don't mind holding for the next cycle.

I've read that if they put the brakes on QE, gold will be adversely affected. Is this correct?

Sorry for the stupid questions, but I'm not very familiar with the mining industry and its cycles. Usually stick to mostly O&G since I work in the industry.
__________________
Tell me, what is it you plan to do with your one wild and precious life? - Mary Oliver

Don’t struggle so much, the best things happen when not expected. — Gabriel García Márquez
JacqJolie is offline   Reply With Quote
Old 01-17-2014, 07:51 PM   #6
Thinks s/he gets paid by the post
 
Join Date: Sep 2012
Location: Seattle
Posts: 2,906
I am up 60% so far in 2014 on my mining stock pick, Thompson Creek metals.

I think the call for 2014 being the year of the miner is paying off.

I sold 3/4 of the position so now I have $4000 profit plus zero cost basis in the remaining shares.

That is the way I roll.
__________________
Fermion is offline   Reply With Quote
Old 01-19-2014, 11:57 AM   #7
Recycles dryer sheets
JacqJolie's Avatar
 
Join Date: May 2009
Posts: 159
Thanks for the reply Fermion and congratulations on a nice gain!

I had some time to do some further reading yesterday (eg.):
Goldcorp, Yamana Gold Offer Less Risk, Barclays Says - Stocks To Watch - Barrons.com

I will be holding and possibly adding as well. I think I picked up some good companies (have owned most of them before) and just got lucky in the timing on the purchase price. Had a look at Thompson and can see why you would make the sell/hold decision you did. This isn't a very good article on Thompson but the comments are interesting:
Thompson Creek Metals Company Inc (USA) (TC): Thompson Creek Appears Destined To Fail - Seeking Alpha
__________________
Tell me, what is it you plan to do with your one wild and precious life? - Mary Oliver

Don’t struggle so much, the best things happen when not expected. — Gabriel García Márquez
JacqJolie is offline   Reply With Quote
Old 01-21-2014, 07:43 AM   #8
Thinks s/he gets paid by the post
 
Join Date: Sep 2012
Location: Seattle
Posts: 2,906
Quote:
Originally Posted by JacqJolie View Post
Thanks for the reply Fermion and congratulations on a nice gain!

I had some time to do some further reading yesterday (eg.):
Goldcorp, Yamana Gold Offer Less Risk, Barclays Says - Stocks To Watch - Barrons.com

I will be holding and possibly adding as well. I think I picked up some good companies (have owned most of them before) and just got lucky in the timing on the purchase price. Had a look at Thompson and can see why you would make the sell/hold decision you did. This isn't a very good article on Thompson but the comments are interesting:
Thompson Creek Metals Company Inc (USA) (TC): Thompson Creek Appears Destined To Fail - Seeking Alpha
Yeah we tore that article to pieces on the yahoo message board for TC. It had so many things wrong, but it was great for driving the stock down below $2 where a lot of us who knew the real story loaded up. Then a few days ago Thompson Creek announced they just shipped $50 million of copper gold and silver during the *startup* of the mine. The revenues in 2014/2015 are going to be up 60 or 70 percent YoY. Guess what happens to a stock price when the revenue goes up 70%?

But I still sold because you never know. Gold could drop to $600 and copper to $1.50. I don't think it would happen but I like to hedge and lock in some profits. If TC falls back below $2 on another fake article, I will probably rebuy.
__________________
Fermion is offline   Reply With Quote
Old 01-21-2014, 11:30 AM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,449
I have been interested in mining companies, but companies like TC are too small and under my radar. When thinking mining, I have in mind big guys like Freeport McMoran, Vale, Rio, BHP, etc... These guys still have not done that well the last 2-3 years, but are showing sign of life, now that the world economy is predicted to continue to recover. I do not care for the price of gold, but copper price has been inching up while aluminum looks to be stabilizing.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 01-21-2014, 11:47 AM   #10
Full time employment: Posting here.
NYEXPAT's Avatar
 
Join Date: Jul 2009
Location: Miraflores,Peru
Posts: 887
Like others here, I got burned when I went bottom fishing last year and sold most for the tax loss. What I have left is almost at break even (in a tax advantaged account) so if they continue to recover in 2014, I will be sure to get out at the earliest possible moment!
__________________
NYEXPAT is offline   Reply With Quote
Old 01-21-2014, 12:02 PM   #11
Thinks s/he gets paid by the post
 
Join Date: Sep 2012
Location: Seattle
Posts: 2,906
I lost a bit in FCX (that is a really big boy) but I managed to grab some for $30 last year and then sell my $45 shares for a nice tax loss while holding the lower cost shares. They also paid me a few thousand in dividends so I should count that.
__________________
Fermion is offline   Reply With Quote
Old 01-21-2014, 12:42 PM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,449
FCX is actually small compared to BHP, Vale, and RIO. The latter have sales of 2X and 3X that of FCX!
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 01-21-2014, 06:50 PM   #13
Thinks s/he gets paid by the post
 
Join Date: Sep 2009
Location: Hong Kong
Posts: 1,577
Mining shares are pretty beaten down and I have been looking at them as a contrarian investment.

I pulled the trigger earlier this week and purchased shares in a mid-cap Australian iron ore producer (it would probably be viewed as a small cap in the US) and am currently reading up on some of the large cap mining companies like Rio Tinto.
__________________
Budgeting is a skill practised by people who are bad at politics.
traineeinvestor is offline   Reply With Quote
Old 01-21-2014, 07:47 PM   #14
Recycles dryer sheets
JacqJolie's Avatar
 
Join Date: May 2009
Posts: 159
I've been catching a bit of a falling knife on Vale. Fortunately haven't lost too many fingers, but might make another grab for it or one of its peers. Also own some Teck that's been so-so (but the MA is bullish so I might pick up some more) and still have some SID - that surprisingly turned out to be a double +, except I sold most of it before then. Pretty sweet dividend on that one too - or it was when I first bought it anyway. I wouldn't buy it now at this price.

Also looking at adding to Terra Nitrogen and Rentech right now though and don't have a lot of cash left to buy anything anyway after the gold miner binge. Maybe that's a good thing.
__________________
Tell me, what is it you plan to do with your one wild and precious life? - Mary Oliver

Don’t struggle so much, the best things happen when not expected. — Gabriel García Márquez
JacqJolie is offline   Reply With Quote
Old 01-21-2014, 10:37 PM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,387
Quote:
Originally Posted by Fermion View Post
Yeah we tore that article to pieces on the yahoo message board for TC. It had so many things wrong, but it was great for driving the stock down below $2 where a lot of us who knew the real story loaded up. Then a few days ago Thompson Creek announced they just shipped $50 million of copper gold and silver during the *startup* of the mine. The revenues in 2014/2015 are going to be up 60 or 70 percent YoY. Guess what happens to a stock price when the revenue goes up 70%?

But I still sold because you never know. Gold could drop to $600 and copper to $1.50. I don't think it would happen but I like to hedge and lock in some profits. If TC falls back below $2 on another fake article, I will probably rebuy.
Not going to hazard a guess on gold miners, but I do think that if someone plays in this field he has to hold for a reasonable gain. It doesn't pay to run these large risks, then take off at the first signs of success. I have always looked at these as options, or lottery tickets. Once you are in, you stay in until you get a reward commensurate with the risks you take or you sell for a loss and immediately take another horse tick to ETFs so the bets won't vaporize and eventually you will be a winner. (Actually, you are winning now, which is better than my gold experience of late. You are likely taking my money!

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 01-21-2014, 10:40 PM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,449
For what it's worth, Goldman Sachs just issued an advisory saying the price of iron ore will stay depressed, and it does not bode well for some miners.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 01-22-2014, 08:18 AM   #17
Thinks s/he gets paid by the post
 
Join Date: Sep 2012
Location: Seattle
Posts: 2,906
FCX posted earnings this morning, a beat on profit but a miss on revenue. The revenue miss doesn't seem that bad. If they didn't have the problem with the Indonesia mine I could see the stock being $40, but it looks like it will drop to $34 today. I might pick up a few shares...maybe use a buy-write and try to get them at $32 and collect the nice dividend.
__________________
Fermion is offline   Reply With Quote
Old 02-03-2014, 07:06 PM   #18
Recycles dryer sheets
JacqJolie's Avatar
 
Join Date: May 2009
Posts: 159
Sold some of the Goldcorp that I bought in December on Friday just short of a 25% gain. Had read the 13F filing that Seth Klarman (Baupost) dumped all of the gold miners he'd bought in Q2 in Q3 2013 and it spooked me into taking some profits. And I had to make room in my RRSP for US purchases so had to move a CAD stock out. Still think most are fairly cheap and would buy even now except I'm still too heavily weighted in them now with the gains. They sure were a big help with keeping it green for January results anyway.
__________________
Tell me, what is it you plan to do with your one wild and precious life? - Mary Oliver

Don’t struggle so much, the best things happen when not expected. — Gabriel García Márquez
JacqJolie is offline   Reply With Quote
Old 02-04-2014, 05:46 AM   #19
Thinks s/he gets paid by the post
 
Join Date: Sep 2009
Location: Hong Kong
Posts: 1,577
Quote:
Originally Posted by NW-Bound View Post
For what it's worth, Goldman Sachs just issued an advisory saying the price of iron ore will stay depressed, and it does not bode well for some miners.
FWIW, the premium for pellets over fines is widening as China cracks down on pollution.
__________________
Budgeting is a skill practised by people who are bad at politics.
traineeinvestor is offline   Reply With Quote
Old 02-22-2014, 08:08 PM   #20
Recycles dryer sheets
JacqJolie's Avatar
 
Join Date: May 2009
Posts: 159
Sold son out of Vale for son at a quick (1 mo) 10% gain. Sticking with the gold miners for both of us for the meantime with a stop-drop price of ~ 10%. I sold a bit of GDXJ and G at about where I thought they were fully valued. Will be happy to be pleasantly surprised.
Since the miners are about 15% of my total port and I'm up 9.1% NW YTD, am happy to be a dirty stock timer.

Disclosure - did not make 30+% in 2013.
__________________

__________________
Tell me, what is it you plan to do with your one wild and precious life? - Mary Oliver

Don’t struggle so much, the best things happen when not expected. — Gabriel García Márquez
JacqJolie is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 05:16 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.