Musings on Investing

India: Gold Find and the Economy

Minaurum Gold, etc.

At the recently held PDAC, Sunny Pannu and I talked about the news of India’s major gold find, why such propaganda is accepted, Indians’ inability to let rein in on their emotions and to act rationally, India’s economy, China, the next Q.E., why I prefer the developed world over the so-called developing world, and of course, corona-virus. Are people buying more gold as a result?

On Investments…

A lot has been happening in the stock market over the last two weeks. Here is a discussion I recently had with Bill Powers on how I am deploying my cash:

Given the turmoil in the market, I recently prepared two lists of companies that I believe offer a great upside. Those companies are listed here and here. Here are some more:

  • Minaurum Gold (MGG; C$0.24): This company is run by among the most astute people in the industry.
  • Otis Gold (OOO; C$0.08): There is an arbitrage upside of 30% in owning OOO. All you have do is to check the price of Excellon Resources (EXN) and multiply it by 0.23 to get the value of OOO. I would divide this value by 1.3 to get my bid price for OOO. This would position me for a 30% arbitrage upside.
  • Balmoral Resources (BAR; C$0.22): This is also an arbitrage opportunity. Try the same math as above but by using 0.71 instead of 0.23.
  • Aurion Resources (AU; C$0.45): This is another company run by a very astute management. I have for a long time waited to buy it.
  • Adriatic Metals (ADT.ASX: A$0.78): They have a high-margin project in Bosnia, although I am unsure about the jurisdiction. But at the current price, my view is that all risks have been discounted.
  • Acacia Communications (ACIA:NASDAQ, US$60.62): ACIA is being acquired. If government approvals comes through, which are expected in the last quarter of this year, each share will convert to US$70. Of course, there are a few risks regarding approvals, but those who prefer to sit on cash in these tumultuous times might find ACIA a productive home at low risk for some of their cash.

Warm regards,

Jayant Bhandari

Associate: Rajni Bala

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