Musings on Investing

China: Stumbling?

O3 Mining

I have been a big fan of China. It is the only among what were the Third World countries that has the potential to become a developed nation. But Xi’s egocentricity and rising nationalism in China might prove to be their undoing.

Xi miscalculated the trade-war with the US, which is going to harm the Chinese economy badly. He has unnecessarily interfered in Hong Kong, which has unleashed a democratic movement in Hong Kong. It is not easy to suppress Hong Kong. If he wins, he will have killed the golden goose. If he fails, he will have unleashed a democratic movement in China (and in Hong Kong).

In my view, democracy is the worst form of government. Moreover, all revolutions are taken over by bad elements, the reason why irrespective of why they initially started, they always end up worsening the political situation.

Xi has started what will leave no one better off.

My favorite society, Hong Kong, will never be the same again. I explore Hong Kong issues in the linked article.

On Investments…

I have written a couple of times about O3 Mining (OIII; C$2.25). Their last financing was at C$3.88. They are currently doing a flow-through financing at C$4.20—this is a Quebec charity flow-through and its real value in the market after the “tax-advantage” is much lower.

I have failed to find a reason for the drop in the share price. I spent time with Jose Vizquerra Benavides, CEO, while we were at the fabulously well-run Precious Metals Summit. He explained to me his strategy with the 50,000-meter drilling they are doing. Having followed the projects for many years under different ownership, I am convinced that he has a great plan for OIII.

What is obvious is that OIII is not followed by many people. Retail investors I have talked with are oblivious of it. And institutional investors are either already invested or cannot buy enough shares in the open market. Companies in such situation are exactly the ones I pay attention to, companies that have fallen with small share-volume for no good reason, have a limited following, and hence are often cheap.

Here I talk in a bit more details on OIII with Cory Fleck.

Also, while at the summit, Henry Lazenby of the Mining Journal and I discussed the trade-war and a few other companies. Linked is the discussion.

If you are an investor in the mining industry, consider participating in their next event. Here is Charlotte McLeod and I talking about it:

Warm regards,

Jayant Bhandari

Associate: Rajni Bala

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