"The trick is picking the right stocks to hitch your wagon too. "
The trick is picking the right stocks to hitch your wagon too... AND buying (and selling) them at the right price at the right time.
"The right stocks"... are the ones that DO pass your DD screening.
My value investors DD checklist is only three steps:
1. Can you trust management ?
2. Is the value that exists solidly attached to the shares ?
3. Is the value real, and realizable for shareholders ?
Those used to be "yes, yes and yes" for USSIF.
Now, they are "no, no, and yes/maybe" for USGIF.
1. On the trust front, management have a lot of improvement required. In my own DD, when the first answer is no, that's all you need to do... you've reached the end of the effort required.
"If no, exit and find another prospect"...
FWIW, the new guys seem to missing quite a lot of the easy things in the "attention to detail" department. MARK THAT. If you think the worst that can come of that is an oversight on the U.S. listing... a website saying they have resources in X % gold instead of X grams per ton... or a PR saying you have access to things you don't ? USSIF's former professionalism is GONE along with former management (by which I mean Parker, not subsequent shills).
2. The value here USED TO BE well attached to the shares... but, seeing serial reverse splits, dilutive deals, increasing transfers of value from shareholders to management... and increasing debt risk, posing bigger dilution risks, now makes that answer no, no, no and no. That's what they mean when they say that the new company is a "growth oriented" outfit. It means they're going to be wheeling and dealing with "the value" that used to be attached to the shares... rather than holding and growing it over time for your benefit. Risk is going up... "value attachment" is going down... and they're going to be playing poker using your chips...
"If no, exit and find another prospect"...
3. The silver values from USSIF were and are real. The gold values from the Drumlummon... aren't nearly as real. The value is now much less realizable for shareholders than it was before... as you see your interest shrinking through the PURE dilution of transfers occurring without exchange of value in return.
FWIW, the fact of "the value in the rocks" never matters... if it isn't SOLIDLY attached to a share... so, "real" isn't important without the proof of the attachment... that being the reason that "real" comes after "attachment" in the checklist. A massive value being stolen from you... isn't a reason to own the bag that used to hold the value. There are "degrees" that apply... but, really, there are also choices to make, that apply, and you don't need to choose the lesser values or the lesser degrees.
"If no, exit and find another prospect"...
As far as timing...
Looks like silver may have peaked already in what is looking like the latest suckers rally... ? MACD rolling over on the daily charts... the weekly showing "fair value" in the trade dynamic closer to $25 than $30, but the contest between the MACD on the daily and weekly charts may not have played out fully yet... Monthly charts show silver may drop to and below $20 yet before there is a dynamic that supports more than rallies in a decline. Trading patterns the last two years include these pops to the next higher resistance level prior to rolling over and moving down below the former lows. That's both a normal feature of bear market rallies... and, in the case of silver, pretty apparently reflective of an interest in fostering increased volatility as a function of price manipulation. It's great for traders. Not so great for holders who buy too soon, on optimism with evidence of rising prices, instead of at the lows for a trade...
Still, the price of the commodity doesn't fully dominate the trade in the shares of miners, since not all ARE fully slaved to the metals prices... but, producers will tend to move in sympathy with the metals price more, if not in synch with them, and more than explorers might anyway, since that price isn't generating income anyway. FWIW, as USSIF this company was 85% production and maybe 15% or 20% exploration and development... that at a level handily funded by cash income, debt free... now, as USGIF, it's more like 60% production and 40% exploration... with debt... and the risk we'll get a lot more.
That should mean shares will trade lower and less sympathetically with metals prices, from a lower base level... as the "price support" from the production that ties share price to metals is being diluted... along with other things. Metals prices are significantly outperforming shares now... still... so, that "attachment" issue is a big factor in figuring out how you should value the shift in focus from "producer" back to "explorer".
I do have to thank USGIF management for getting right on that U.S. listing issue, though... so that a mere TWO WEEKS after trading resumed in Canada... U.S. holders were finally able to begin selling off a few shares to unwind positions at the end of this week... while silver was already back in decline, the USGIF buying rally over, with the shares also having coming off the recent highs, but, at least, both silver and shares not yet fully correcting lower.
Thanks guys...
/s
Need MORE proof these guys are in this to benefit themselves at your expense... not in it to benefit from succeeding with you ?
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