Home » Drill Play » Portfolio update

A few thoughts:

An anecdote on Bay Area real estate

People I am close with have been looking to sell their 3 bed/3 bath home in San Jose. This is newish construction (2007), 2 miles from downtown San Jose, 2 miles from Apple and Google’s new campuses. The market started to soften beginning of September in my eyes. This is a neighborhood where houses would routinely get sniped day of listing for above asking, with multiple competing offers same day. They listed the house 3 weeks ago, in late September 2018 for $1.13MM. ZERO offers came in the first three weeks. Finally got an offer this week, $6k below asking, then another offer a day later at asking.

The average mortgage rate just reached a 7.5 year high at 5%.

In my estimation, the market hasn’t really digested the rising rates. The difference between a $1MM  30-year fixed note at 3% vs 5% is ~$1,200/month. This is real money. The entry level housing market should take a hit.

I think what’s happening now is the millennial full stack dev making $250k/yr who has never worked through a recession and has only ever seen prices rise has taken this temporary lull in the market as a buying opportunity. Most of the would be buyers have wisened up and backed off in the face of rising rates and the late cycle reality.

I suspect long term, today’s buyers will be fine, but you won’t catch me buying an illiquid, fee laden asset at today’s prices.

 

General Markets

All I know is this: I don’t really know jack about the general stock market. I’ve been expecting a crash since late 2014. I’ve traded hyper-growth tech names like Roku, Spotify and Amazon but have since gotten out and added to index funds like SCHD and XLP in my retirement accounts. Also added to my Franco Nevada position as a long term hold. These are the types of plays I add quarterly and legitimately forget about. Yes I know it’s an everything bubble, but longterm I think I’ll regret it if I don’t just stick to a plan and buy and hold these things in a retirement account. I’ve been holding a lot of cash all around for several years now and I’m getting to the point where I feel like I need to start buying into these things even if I don’t necessarily think they’re great buys for the next couple years. Need to think longer term in these accounts.

Junior Miners

The wacky world of junior miners. Home to gems like this and unprosecuted bullshit like this (h/t IKN).   I’ve made a bit of money here (read: not much – I consider it a win I haven’t lost anything) since I started mid-2016, but in all honesty, I’m addicted. It’s fun. If I can learn along the way and become a better investor/trader that’s a win.

BOUGHT 7,000 shares of $CGP.v at $0.165, SOLD 7,000 shares at $0.25. BOUGHT 10,000 at $0.24, SOLD 10,000 at $0.27. BOUGHT 10,000 at $0.335, SOLD 10,000 at $0.38.

This has been one hell of a ride with BHP getting on board. Looks like a bidding war for CGP is imminent.  I’ve been skeptical of the economic viability of Alpala but BHP and NCM clearly think otherwise. I’ve been spooked for a variety of reasons (general market weakness being one of them), hence the quick ins and outs.

SOLD 40,000 shares of $HVG.v at $0.09

Lightening up my load, de-risking, whatever you want to call it. Been burned on enough drill plays (looking at you, BTT and BAY) to get the itch to de-risk when I get the chance. Holding a measly 20k shares and planning to let that ride through drill results.

BOUGHT 10,000 shares of $MUN.v at $0.13

Wish I had added more at this price. After chatting extensively with MiningBookGuy, my conviction in MUN has grown. Strong management and multiple upcoming catalysts. Prospect generator with multiple highly prospective properties and a major onboard. Currently at $0.20, not chasing it up here. Will let it ride.

Drill Plays

I held both WHN.v (bought $0.33, sold $0.41) and GTT.v (bought $0.68, sold $0.75) pre-news, but sold out of both completely a couple days before their respective NR’s. Also bought GBR.v post-news at $1.25 and sold at $1.38. My strategy going into this season was to hold a handful of drill plays and hope for at least 1 big winner. Well, I held into news on BTT.v without de-risking, got smoked there. Took some profits on BAY.v but still have largely gotten smoked there. Was eager to take profits (and not get smoked due to disappointing news) on GTT.v and WHN.v and missed huge moves. Could have easily worked out differently, as some of this is luck, but this has been a good learning experience. Point is this – I’ve been risk-averse after a few early misses. Everyone’s got a plan until you get punched in the mouth, or something like that.

Had a bid in for WHN.v during halt at .48 this morning, missed by a penny. At dentist when trading resumed. Got back in at .64. Yep, I’m a newbie, I know.

My biggest position in the junior space is still ADT.ax. 40k shares at $0.33. Still believe a re-rate is a matter of time.

That’s it for now.

Cheers,

J