Musings on Investing

Democracy: The Worst System

NewCastle Gold (NCA)

The weed of democracy has spread around the world. I can think of no society that has improved socially or culturally after it accepted democracy. As democracy matures, the character of the masses—their naivety, and obsession with bread and circuses—starts to reflect in the institutions.

The movie actors (including those so-called raped by Harvey Weinstein) who are elevated to the celebrity status exemplify the kind of people the masses like and fall in love with. These celebrities are empty-headed and reflect the personalities of the morally adrift masses.

The same masses are behind who gets the power in democratic systems. Those the masses elect have absolutely no moral or rational anchors. Politicians elected this way are populists and are forever looking for whatever is the latest “intellectual” fashion in the minds of the masses.

What is the solution? Democracy for sure is the worst problem, for under it social decay is absolutely certain. Here is an interview I recently did on the subject:

On investments…

NewCastle Gold (NCA; C$0.76) is being acquired by Trek Mining. Also, being acquired is Anfield Gold.

I am no fan of Trek. It is a hotchpotch of difficult projects in difficult jurisdictions. My guess is that the company was structured not to generate wealth, but for promotional purposes. Also, I don’t like how Trek did their last financing. The way it was done helped them raise a lot of money, but it did not bring them investors. It brought them greedy traders.

Trek has suffered hugely for not having been focused on value-creation. Now that Ross Beaty is joining the board, I would expect him to clean up Trek’s project portfolio.

There is currently an arbitrage upside of 15% in owning NCA. If the merged entity cleans up its portfolio, I will stay around, otherwise, I will act like a greedy trader and get out after booking my 15% profit from arbitrage.

If you decide to buy NCA, make sure not to chase it. Shares from their last financing will come free-trading next week, which should create a better opportunity to buy NCA.

On  29th November 2017, I will be speaking at Mines & Money, London.

Warm regards,

Jayant Bhandari

Associate: Rajni Bala


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