Musings on Investing

The Third World will stay the Third World

Novo Resources (NVO.V), FPX Nickel (FPX.V), and Thunderstruck Resources (AWE.V)

Since the end of the USSR, there has been a huge amount of euphoria about the Third World, now known as Emerging Markets. The euphoria is not only unfounded, the Third World is getting worse by the day.

Looking closely at the Third World—Brazil, Venezuela, Central America, Bolivia, Peru, the Middle East, India, Myanmar, etc.—one sees that all these countries are imploding. I struggle to think of a Third World country, with the exception of China, that is not getting worse. South Africa, Turkey, and Malaysia were once seen as among the best in the Third World. No more.

As democracy (read, mob-rule) has sunk its roots deeper in these countries, the psyche of the masses–who care for nothing more than bread and circuses–is increasingly getting reflected in their institutions.

I explore the above in details in my latest article, “the Future of the Third World.”

Following is an interview I did with Maurice Jackson about the above article:

On investments:

  • Novo Resources (NVO): Today after the close of the stock market, shareholders of NVO were treated to a confusing news release. As per the linked news, Newmont sold 11.8 million shares of Novo Resources at a price of C$1.60. Why did Newmont sell NVO for only C$1.60 when it was trading in the range of C$4?
    While a fuller truth will come out in a few days time, my view is—based also on some rumors I have heard—that Newmont had entered into a contract to sell NVO in July 2017, when NVO was in the range of C$1.60. When they finally concluded the deal yesterday they likely simply did not have the choice to sell in the open market. Even if by yesterday they no longer wanted to sell, their contract with the buyers likely forced them to conclude and sell. I am tempted to go with this version of the story, for it looks like a fuller response to the situation. It, for now, connects all the dots for me.
    I am sure there is more to the story, but I thought that the above might be of help to those who are mulling over Newmont’s sale of Novo shares.
  • FPX Nickel (FPX; C$0.09) has a very large Nickel project in Canada. They are currently drilling in an area that will likely improve the grade of the resources. FPX has a very tight share-structure, excellent management and a project that can make this company a ten-bagger. (From my ten-bagger list, NVO has made as much as 1,200%. IRV and AU have made more than 50%. I am now hoping for FPX to do the same.)
  • Thunderstruck Resources (AWE) is doing a financing at C$0.08 per unit. They have a large land-holding in Fiji. Their share-structure is very tight and the company is backed by some very well-connected people in the industry. This is an early stage company and hence very risky. I am participating in the financing. (Disclaimer: I intend to do a small financial consulting project for AWE, so take this information with a grain of salt).

Warm regards,

Jayant Bhandari

Associate: Rajni Bala

 

Disclaimer: All information found here, including any ideas, opinions, views, predictions, forecasts, commentaries, suggestions, or stock picks, expressed or implied herein, are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. While the information provided is believed to be accurate, it may include errors or inaccuracies. The sole purpose of these musings is to show my thinking process when analyzing a stock, not to provide any recommendation. I will not and cannot be held liable for any actions you take as a result of anything you read here. Conduct your own due diligence, or consult a licensed financial advisor or broker before making any and all investment decisions. Any investments, trades, speculations, or decisions made on the basis of any information found on this site, expressed or implied herein, are committed at your own risk, financial or otherwise.

2 Comments on "Musings on Investing"

  1. re. your comment about 3rd world countries, wow! you condemn a lot of places with such a broad generalisation of negativity.
    I have been visiting these places for a long time and mostly I am always impressed by their vibrancy – sure they have had their ups and downs.
    anyway I could name one country in SE Asia which seems to be doing fine – Laos, with the fastest growing economy in the region. I first went there in 1999 and I got 20000 Lao Kip for my one English pound, now I get less than half that. the place is booming! ok, this may also say something about the state of the UK.

  2. Hi Jayant,

    I also think you are being too negative especially if the benchmark is the West. Economically speaking I feel that Asia is doing better….less debt and still a work ethic that is improving.

    The real issues that need thinking are the advent of robots and automization of all work related tasks and its impact on Asian countries. Asia has very good demographics but not sure apart from Facebook and other mind numbing social media how open these societies are to this new technology. Will it be harnessed or will it cause havoc ?

    The other issue is of course what kind of democracy one can expect globally and in Asia in particular. We have a perfect storm set up – the dumbing of our youth through social media outlets, lack of critical thinking abilities , poor reading skills coupled with the desire of governments to control everything.

    India is at the forefront of this parade……cashless society, govt propaganda , religious hatred increasing, destruction of local indigenous groups and culture.

    These negative trends are occurring very smoothly and are being embraced by everyone…..how people can believe that a cashless society is good for privacy or freedom is shocking. Also our toleration for corruption and deceit has grown exponentially …….

    Think that Huxley has been proven right and that Orwell’s scenario was very 2000’s….we have now learnt to embrace our slavery to materialism, consumerism and willing abandoned our philosophical heritage that defined natural law, rights and leisure.

    Again thank you for all your work and lonely battle . India is the favourite destination of capital these days….and Modi despite all that is self evidently wrong with his policies, remains the darling of the West.

    Kind regards,

    Aamer

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