I Love Cheap Commodities
Oct 3, 2011
I'll admit it. I'm a contrarian. I love it when the "GURUs"
and CHEERLEADERS have led their sheep to slaughter one more time
and all they can bleat is "Manipulation, manipulation."
Somebody told me once that making money was easy. You buy cheap
and you sell dear. I worked out the math on my Bomar
Brain and it
worked. If you buy silver at say, $4, and sell it for $40 you
make $36 or 900% on your investment. How wonderful is that? How
could life get any better?
It can, actually. Because all the self-proclaimed GURUs and CHEERLEADERs
were screaming BUY-BUY when silver was $50. Of course, it had
nothing to do with the fact most of them make a living selling
silver; they weren't really talking up their book because that's
how they make money. They were looking out for the best financial
interests of their flock, I mean followers.
They should have been saying BYE-BYE because all those guys who
believed in buying at the highest prices in history because silver
was moving into "STRONG HANDS" can now wave bye-bye
to their money.
Strong hands? Huh? How does that work? I thought the strong hands
were the guys who wanted it when you couldn't give it away. The
guys who want to listen to cheerleaders and want to buy at market
highs are the weakest of weak hands. You can guarantee a profit
by selling to them anything they want.
If you want the most beautiful sell signal I have ever seen on
silver, use the premium
paid on the Sprott Paper Silver. It was 26% on April 25 and that was a profit
opportunity of a lifetime followed by 25% premium on the 22nd
of September, just before the monster crash.
Anyone dumb enough to pay a 26% premium over spot is so dumb
that you can safely use it as a sell signal. I am sure there
will be a premium that will mark a great place to be buying silver
but there haven't been any great places to buy silver since the
Sprott Paper Silver started so there is no pattern yet.
The top in silver in April was predictible and was predicted. The dead cat bounce was predictible
and was predicted. Getting into cash to safely
avoid a market crash was predictible and was predicted. Guys and girls, investing is
simple. Buy cheap and sell dear. That's all there is to it. And
stop listening to the fools who claim to be gurus, there are
none. If you buy at the bottom, you get the cream. If you buy
at the top, you are going to get creamed.
Silver and gold are going to get cheap. When it's cheap you should
buy some. When it gets expensive, you should sell. The difference
is called profit. You will be buying it from the same guys who
wanted to buy at $50 silver and $1920 gold knowing there was
a bigger fool around the corner waiting to buy it from them.
Guys who buy expensive and sell cheap can subtract the difference,
it's called losses. But of course that won't apply to my readers,
they know better.
We are in a monster crash. It was predictible and was predicted. For all purposes Greece has
defaulted. The Clowns running the EU want to pretend they can
ring-fence the banks of Europe who were left holding now worthless
paper but it ain't gonna happen.
A lot of writers are using the word, contagion, but this isn't
contagion. It's $600 trillion in derivatives blowing up. How
are you going to protect banks from their own stupidity when
every depositor has the choice of sticking around because they
sincerely believe politicians are looking out for the depositor's
best interests? Yea, right. Well, good luck with that. When depositors
pull all their cash out, the banks have to close their doors.
It's happening right now.
We are in a very dangerous time to invest. The only thing that
I can see that is dead cheap is platinum and that's only cheap
if you are trading gold or silver for it. Even platinum will
probably get cheaper. But if you have ever listened to anything
I have said, you are going to have a really wonderful opportunity
to buy cheap soon. Maybe as little as a month. When the cheerleaders
are whining the loudest, that's when you should buy. When they
are crowing about how smart they are, you should sell.
I visited an interesting company in Alaska that has
done an incredible job in executing a project
JV model. It's a model that lots of companies try but few execute
successfully. Basically the company picks up good projects and
then finds good JV partners to explore them at their expense.
The company is called Millrock Resources. (MRO-V) and
has a market cap of about $28 million.
Gauging the quality and value of a project generation model company
can be difficult. Currently Millrock has a total of 14 projects
with 9 in Alaska, their main focus, and another 4 in Arizona.
By spreading out the projects into different locations, Millrock
is assured of a constant flow of news to investors.
I've dealt with a lot of companies with a large portfolio of
projects over the past ten years. Rarely do they get full value
for anything over a project or two. It was true of Novagold with
a handful of company making projects and just as true of Eagle
Plains with over 30 projects.
With Millrock, I didn't have to judge the value of the individual
projects and neither do you. Such companies as Teck, Vale, Kinross,
Inmet, Altius and Ryan Gold have already done the heavy lifting.
Millrock has eight partners, some of the biggest names in the
This year alone, Millrock will be the operator, spending some
$15.1 million dollars of their partner's money while only spending
$1.5 million of their own. Millrock management and projects have
the AAA seal of approval by their partners. There is almost $50
million in total future commitments from Millrock's partners.
Greg Beischer as President and CEO runs the company and with
14 projects and dozens of people to manage he has his hands full.
Phil St. George, of Novagold fame, is the VP of Exploration and
Dr Adrienne Ross is VP of Operations.
For the year, MRO is down almost 66%. Without having any homerun
drill results, it's quite impossible to directly measure any
project generation company. But we know Millrock's partners are
first class, among the best in the business and we know that
relative to where investors were valuing the company a year ago,
Millrock is cheap. When mining shares take off, I believe Millrock
will be one of the early leaders. You can rarely go wrong by
buying cheap and selling dear.
And with the drilling season being almost over in chilly Alaska,
we can look for a flurry of drill results. I'd be hard pressed
to see how you can spend $16 million in a season and not come
up with something pretty hot.
Millrock is not an advertiser but I wish they were. I think investors
can do very well investing in companies with management this
qualified. I don't own shares but at a price I would certainly
consider buying MRO. I'm still biased; Phil St. George is one
of my heroes. He was a giant part of the success of Novagold
almost ten years ago.
MRO-V $.385 (Sep 30, 2011)
MLRKF-PK 70 million shares
Millrock Resources website