Thursday, February 2, 2012

Happy Investing in 2012

Happy New Year and Investing in 2012!

As an example of what you may expect, if you get in on my email list, here it is, a recent commentary:

Goombarh 73 - February 2, 2012
Good Morning,

It is time to get back to business folks, if you are interested in the stock market.

Since October, the general markets have recovered significantly.  The S&P500 is now at 1333, whereas the high was 1370 for last year, the highest since the 2008 crash.  That is if you were in the general markets, your portfolio should now be close to the highest since 2008, if you are an average investor.  Here is the headline from Bloomberg this morning:
This means there is a lot of big money, still on the sidelines that will come into the markets later and assist with driving things upwards.  Also, this is a presidential election year, and no, the president will not allow the economy to falter during his re-election push.

For myself, I invest in the riskier small cap resource stocks, and no I am not back to the highest since 2008.  The barometer for my portfolio may be the TSXV index which is at 1640 presently, a good distance of 33% off from the peak of 2464 achieved in February 2011, the highest since 2008.  In fact, I am a good 50% off from my own peak achieved in about March 2011.  What I hope to have learned from this latest episode of the markets gyrating downwards, is to take a portion of the winnings off the table, when the market is good.   This is a very important lesson to take to heart.  Preserve the cash, and redeploy later, when the markets are down.

Now back to business, the markets are moving upwards and the investor needs to be in and positioned to be able to reap the possible future gains.  Let me refresh myself as to my goals and market positioning guidelines.  Following are some guiding market thoughts collected over time.

Goombarh Strategy 2012
1.      Know something that will be valued higher in the future.
a.       shale oil - Bakken, Kurdistan oil (held back with politics)
b.      Folded porous carbonate structure allowing high producing level -Shoal Point Energy (SHP, SHPNF) - huge multi-billion barrel oil prospect; oil tests coming in 2012 and running right now.
2.      Track the trend of a commodity that is moving higher or may have a future shortage.
a.       oil, and metals; take a look at Zinc
b.      potash - Ethiopian Potash (FED, ETPHF) - shallow open pit capable deposit; 43-101 coming.
3.      Consider that the general markets are in uptrend before investing.
a.       S&P now moving upwards.
4.      Leverage carefully.
a.       Warrants, and such
b.      Petroamerica Warrants (PTAWF)
5.      Lower priced stocks move higher with easier gains.
a.       TSXV stocks, explorers and developers with solid management and properties
b.      Developers becoming producers - Silvermex (SLX, GGCRF) - producer growing larger, Great Basin Gold (GBG) - solid management and will come on stream with two producing gold mines, Westernzagros (WZR, WZGRF) - Sarquala producing 5000 barrels per day, Mil Qasm test and Kudimir 2 are coming in 2012.
6.      Consider marginal players, with bad news factored in and a change in outlook.
a.       Marginal stocks have the highest gains in a turnaround. - Petroamerica, (PTA, PTAXF) - turning into producer.
7.      Consider that market judges on growth prospects rather than absolute value
a.       market is not rational and will move on hype; so consider when to get out!  Already have getting out in mind, when you are getting in.

As to what is exciting recently, take a look at Shoal Point Energy.  Here is the chart from yesterday:

SHP has broken out and is now at .40 cents.  Here is a link to their latest corporate presentation:
I am sitting on my hands (not selling), and if it is not too optimistic, this stock may be a possible home run.

Petroamerica (PTA, PTAXF) may be readying themselves for a big run. 

Ethiopian Potash (FED, ETPHF) has crashed lower, possibly on the decline in sentiment about potash pricing and sentiment about Ethiopia as being safe place to invest in, but they are presently drilling and should have a 43-101 within 6 months.

Westernzagros (WZR, WZRFF) is being accumulated by persons unknown and are awaiting news from Mil Qasm and Kudamir 2 (being drilled by Talsiman Energy).  This is a good longer term stock in my opinion.

Silvermex (SLX, GGCRF) will move with Silver prices higher.  They have strong management and will be able to deliver on their promises of increased production, but it will take more capital and time.

Oh, attached is my latest take on Great Basin Gold (GBG, which I have posted on Seeking Alpha.  This would be my safest longer term play.  Great management and gold production coming on-line. 

Until next time,
Marco G.


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