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Harvey G-700 dust collector review (sorta) after 3 months of use - long winded
For any Creekers considering a Harvey G700 dust processor, I thought I would offer my insights on this machine that I purchased about 3 months ago. Its not my intention to give a thorough and in-depth review of all the features and specifications of the machine. There are several Youtube videos and websites that cover those aspects. I more wanted to point out what I see as the pros and cons of the machine and some suggestions for improvement, where appropriate.
162506.1.jpg
A little background. Over the last 30 years I have owned 2 previous dust collectors. First a single stage bag unit and then a Oneida 2hp cyclone. The Oneida was certainly an upgrade and performed well, but after 20 years I finally got fed up with removing and cleaning the internal filter in the cyclone. A dusty job, likely exposing me to greater dust hazard than actual woodworking.
So, my main objective in considering a new dust collector was easier and cleaner dust disposal. When I saw the Harvey on a Youtube video, it seemed to meet this objective plus I liked the potential for some space savings in my small shop.
Low Profile: The Harvey is only 34 tall and 24 deep (and is mobile), so this design lends itself to placement under a taller bench or shelving unit. As you can see in the photo, I placed mine under a shelving unit which has made for a more efficient use of my smaller shop space.
0AD75DBD-3220-4EEA-9EDE-13821882F936.jpg
Ducting Options: An advantage of a cyclone dust collector is that the duct inlet is typically higher up on a wall and out of the way. There is only one duct inlet on the Harvey and it is low to the ground. Some forethought is required in locating the machine to avoid the duct work either creating a trip hazard or stealing real estate. Fortunately, in my situation I was placing the left side of the machine near a wall, minimizing floor space taken by the ducts. Placing the machine against the opposite wall (to the right), the inlet would be about 3 out from the wall, which could be problematic. So, this machine may or may not work for everyone, depending on individual shop layout. I have 6 and 4 duct throughout my shop and mostly run one machine at a time.
Mobility: Because the Harvey is on casters it is rather easily moved around. That said, there are only three casters on the machine, two fixed and one swivel. The machine would be much easier to move into tighter spots if there were four swivel casters.
Controls: The machine comes standard with a remote control, and I find that it is immediately responsive and works well from anywhere in my shop. I wish that the company had provided two remotes as these are easily lost items. The Harvey has a ramp start so takes 10 secs or so to come up to full speed. I dont find it to be an inconvenience, but others might.
3E455FA5-4BA4-42E7-A6CD-D7116ED7F1AF.jpg
The other machine controls are, in my opinion, a weakness with this machine. Not a game changer, but an area for improvement. There is a small control panel on the front of the machine with an on/off button, a couple of Do Not Touch buttons for technicians, a pressure dial, a speed control knob, and a digital screen. The main on/off switch is on the back of the machine (more on that).
IMO, much of the control panel could be eliminated, but I am not one enamored by gadgets and dials. Having a remote, I find the existing front panel on/off redundant. Others on Youtube have commented on the wisdom of having unprotected technician only programming buttons on the front panel. At least one owner bemoaned the fact that his young shop helper pushed the wrong button and the machine required a laborious reprogramming. I will say that I use the speed dial more than I thought I would as it is nice to dial down the suction (and the noise level) when max suction is not needed. I suppose there are those out there that want to monitor suction with a dial gauge and digital readout, but I find it unnecessary.
I am not sure why Harvey placed the main on/off switch on the back of the machine. It would seem much more sensible to place it on the front of the machine with the other controls. If one wants to slide the machine under a cabinet or shelf, how do you reach the main on/off switch at the back of the machine? I ended up buying a 220/20amp extension cord and splicing in an on/off switch. That way I could leave the main machine on/off in the on position and place the spliced in switch in a convenient location.
Noise Level: This machine is quieter than the other dust collectors I have owned. Others have measured db levels and you can find those results on Youtube.
Dust Disposal and Filter Cleaning: This is, in my mind, where the Harvey dust processor really shines. Though the machine only holds 32 gal of chips, it is easy to unload. I actually prefer this size chip capacity as at my advanced age, lugging a heavy 55 gal bag or barrel of chips is not an option for me. I am not sure why Harvey chose to deposit chips/dust in two separate containers. Perhaps the smaller fines container is supposed to fill less often. I find that both bins fill at about the same time and that there is not much of a difference in chip size, but I have mostly been collecting from my planer, jointer, and table saw. Heavy use of a drum or wide belt sander might change how the bags fill. I really dont care what goes into what bin, so I would prefer a single larger bin rather than the large/small bin design. One less step in emptying the machine.
The Harvey has a bin full light and alarm. This is a great feature of the machine. The only time I have ended up with chips on the floor from my 18 planer is when the full bin light goes off and I dont see it ..chips then start ejecting out the planer. With my old dust collection system, sweeping up chips was a regular chore. This is where bluetooth capability could come in handy. If you are wearing bluetooth capable hearing protection, getting an audible signal from the dust collector when full would avoid overfilling the dust bin.
Another great feature is the ease of cleaning of the collector filters. After separating the larger chips and fines, the collector uses 2 filters to catch the finest of the dust. Each of these filters have a 4" collection port at the end of the machine that needs emptying every so often. One can either use a shop vac or a hose from the machine to recirculate the dust back through the machine. There is a knob at the top of each filter to clean the pleats of the filters. I find that the dust collector does a good job of recirculating the filter dust back into the main bins.
To make the cleaning even easier, I used a clever idea from Next Level Carpentry on Youtube to construct a simple dust recirculation system. His design incorporated a custom made Y fitting to permanently duct from the collection ports back to the inlet of the machine. Instead of custom duct work, I used pieces of flexible 4 hose, a greenhouse Y fitting, a 90 degree dust fitting, and a blast gate to duct to the inlet of the dust collector. Works great and now I only need to open the blast gate and turn the filter knobs to clean the filters. No more air compressor or leaf blower to clean filters! It would be nice if Harvey plumbed the machine with this type of recirculator either as an option or as a standard feature.
1C614015-7C51-4C21-BD07-79A9DA02967F.jpg74FEE7A7-1538-4E42-98B9-21A9394AD704.jpg
Dust Collection Efficiency: My updated dust collection system is much more efficient than the prior system. Both were rated at the same CFM (1100). That said, I did replace my old piping (metal) with a new clamp together system at the same time as I bought the Harvey dust processor. So, it is hard to determine how much of the improvement is due to the machine or the ductwork. My guess is that both contribute to the improved performance. I have my CNC router 30+ feet from the dust collector through 6" and 4" duct and the suction is awesome.
A side note: I bought my clamp together piping and fittings from The Blastgate Company of Warren, MI. They were cheaper than the competition and pleasant and helpful to work with. The components are heavy duty, well-built, and fit together beautifully. Whomever you buy from, a clamp together duct system is a joy to work with.
1895CDB2-2935-4E99-98DC-56BF1CDDAD73.jpg
Customer Service Experience: I lost the remote to the machine and called Harvey about purchasing a replacement. They were kind enough to send out (quickly) a new remote free of charge. They were also interested to hear about my suggestions for the machine. In fact, the representative said she was going into a weekly meeting just after my call and would make sure my suggestions got to all the staff. So, my customer service experience was very positive.
Final Thoughts: Would I buy this machine again? Absolutely. So far, this has been a really great machine. If Harvey incorporates some of the above changes, I think it will be a near perfect smaller shop dust collector. Of course, YMMV. Cheers, Bob Attached Images
162506.1.jpg
A little background. Over the last 30 years I have owned 2 previous dust collectors. First a single stage bag unit and then a Oneida 2hp cyclone. The Oneida was certainly an upgrade and performed well, but after 20 years I finally got fed up with removing and cleaning the internal filter in the cyclone. A dusty job, likely exposing me to greater dust hazard than actual woodworking.
So, my main objective in considering a new dust collector was easier and cleaner dust disposal. When I saw the Harvey on a Youtube video, it seemed to meet this objective plus I liked the potential for some space savings in my small shop.
Low Profile: The Harvey is only 34 tall and 24 deep (and is mobile), so this design lends itself to placement under a taller bench or shelving unit. As you can see in the photo, I placed mine under a shelving unit which has made for a more efficient use of my smaller shop space.
0AD75DBD-3220-4EEA-9EDE-13821882F936.jpg
Ducting Options: An advantage of a cyclone dust collector is that the duct inlet is typically higher up on a wall and out of the way. There is only one duct inlet on the Harvey and it is low to the ground. Some forethought is required in locating the machine to avoid the duct work either creating a trip hazard or stealing real estate. Fortunately, in my situation I was placing the left side of the machine near a wall, minimizing floor space taken by the ducts. Placing the machine against the opposite wall (to the right), the inlet would be about 3 out from the wall, which could be problematic. So, this machine may or may not work for everyone, depending on individual shop layout. I have 6 and 4 duct throughout my shop and mostly run one machine at a time.
Mobility: Because the Harvey is on casters it is rather easily moved around. That said, there are only three casters on the machine, two fixed and one swivel. The machine would be much easier to move into tighter spots if there were four swivel casters.
Controls: The machine comes standard with a remote control, and I find that it is immediately responsive and works well from anywhere in my shop. I wish that the company had provided two remotes as these are easily lost items. The Harvey has a ramp start so takes 10 secs or so to come up to full speed. I dont find it to be an inconvenience, but others might.
3E455FA5-4BA4-42E7-A6CD-D7116ED7F1AF.jpg
The other machine controls are, in my opinion, a weakness with this machine. Not a game changer, but an area for improvement. There is a small control panel on the front of the machine with an on/off button, a couple of Do Not Touch buttons for technicians, a pressure dial, a speed control knob, and a digital screen. The main on/off switch is on the back of the machine (more on that).
IMO, much of the control panel could be eliminated, but I am not one enamored by gadgets and dials. Having a remote, I find the existing front panel on/off redundant. Others on Youtube have commented on the wisdom of having unprotected technician only programming buttons on the front panel. At least one owner bemoaned the fact that his young shop helper pushed the wrong button and the machine required a laborious reprogramming. I will say that I use the speed dial more than I thought I would as it is nice to dial down the suction (and the noise level) when max suction is not needed. I suppose there are those out there that want to monitor suction with a dial gauge and digital readout, but I find it unnecessary.
I am not sure why Harvey placed the main on/off switch on the back of the machine. It would seem much more sensible to place it on the front of the machine with the other controls. If one wants to slide the machine under a cabinet or shelf, how do you reach the main on/off switch at the back of the machine? I ended up buying a 220/20amp extension cord and splicing in an on/off switch. That way I could leave the main machine on/off in the on position and place the spliced in switch in a convenient location.
Noise Level: This machine is quieter than the other dust collectors I have owned. Others have measured db levels and you can find those results on Youtube.
Dust Disposal and Filter Cleaning: This is, in my mind, where the Harvey dust processor really shines. Though the machine only holds 32 gal of chips, it is easy to unload. I actually prefer this size chip capacity as at my advanced age, lugging a heavy 55 gal bag or barrel of chips is not an option for me. I am not sure why Harvey chose to deposit chips/dust in two separate containers. Perhaps the smaller fines container is supposed to fill less often. I find that both bins fill at about the same time and that there is not much of a difference in chip size, but I have mostly been collecting from my planer, jointer, and table saw. Heavy use of a drum or wide belt sander might change how the bags fill. I really dont care what goes into what bin, so I would prefer a single larger bin rather than the large/small bin design. One less step in emptying the machine.
The Harvey has a bin full light and alarm. This is a great feature of the machine. The only time I have ended up with chips on the floor from my 18 planer is when the full bin light goes off and I dont see it ..chips then start ejecting out the planer. With my old dust collection system, sweeping up chips was a regular chore. This is where bluetooth capability could come in handy. If you are wearing bluetooth capable hearing protection, getting an audible signal from the dust collector when full would avoid overfilling the dust bin.
Another great feature is the ease of cleaning of the collector filters. After separating the larger chips and fines, the collector uses 2 filters to catch the finest of the dust. Each of these filters have a 4" collection port at the end of the machine that needs emptying every so often. One can either use a shop vac or a hose from the machine to recirculate the dust back through the machine. There is a knob at the top of each filter to clean the pleats of the filters. I find that the dust collector does a good job of recirculating the filter dust back into the main bins.
To make the cleaning even easier, I used a clever idea from Next Level Carpentry on Youtube to construct a simple dust recirculation system. His design incorporated a custom made Y fitting to permanently duct from the collection ports back to the inlet of the machine. Instead of custom duct work, I used pieces of flexible 4 hose, a greenhouse Y fitting, a 90 degree dust fitting, and a blast gate to duct to the inlet of the dust collector. Works great and now I only need to open the blast gate and turn the filter knobs to clean the filters. No more air compressor or leaf blower to clean filters! It would be nice if Harvey plumbed the machine with this type of recirculator either as an option or as a standard feature.
1C614015-7C51-4C21-BD07-79A9DA02967F.jpg74FEE7A7-1538-4E42-98B9-21A9394AD704.jpg
Dust Collection Efficiency: My updated dust collection system is much more efficient than the prior system. Both were rated at the same CFM (1100). That said, I did replace my old piping (metal) with a new clamp together system at the same time as I bought the Harvey dust processor. So, it is hard to determine how much of the improvement is due to the machine or the ductwork. My guess is that both contribute to the improved performance. I have my CNC router 30+ feet from the dust collector through 6" and 4" duct and the suction is awesome.
A side note: I bought my clamp together piping and fittings from The Blastgate Company of Warren, MI. They were cheaper than the competition and pleasant and helpful to work with. The components are heavy duty, well-built, and fit together beautifully. Whomever you buy from, a clamp together duct system is a joy to work with.
1895CDB2-2935-4E99-98DC-56BF1CDDAD73.jpg
Customer Service Experience: I lost the remote to the machine and called Harvey about purchasing a replacement. They were kind enough to send out (quickly) a new remote free of charge. They were also interested to hear about my suggestions for the machine. In fact, the representative said she was going into a weekly meeting just after my call and would make sure my suggestions got to all the staff. So, my customer service experience was very positive.
Final Thoughts: Would I buy this machine again? Absolutely. So far, this has been a really great machine. If Harvey incorporates some of the above changes, I think it will be a near perfect smaller shop dust collector. Of course, YMMV. Cheers, Bob Attached Images
- 3E455FA5-4BA4-42E7-A6CD-D7116ED7F1AF.jpg (105.5 KB)
- 0AD75DBD-3220-4EEA-9EDE-13821882F936.jpg (162.1 KB)
- 1C614015-7C51-4C21-BD07-79A9DA02967F.jpg (133.3 KB)
- 74FEE7A7-1538-4E42-98B9-21A9394AD704.jpg (143.9 KB)
- 1895CDB2-2935-4E99-98DC-56BF1CDDAD73.jpg (154.2 KB)
- 162506.1.jpg (34.4 KB)
Categorías: Blogs y foros de trabajar madera en ingles
Before Market Open…
This is a rare email and opportunity not 1 in 1000 investors get access to.
You’re about to get a first-hand account from an absolute mining legend.
He has created billions of dollars in shareholder value. And his companies have created tens of thousands of jobs.
But before this mining legend accomplished all that…
Rio Tinto was in a predicament.
There was an operating mine that produced 50% gold and 50% silver.
The problem was the mine got ZERO value for the silver production.
Rio Tinto hired a well-respected banking firm to figure out how to unlock value from the silver portion of the production that was getting no value from the market.
The bankers concluded no royalty could be made to unlock value that would be attributable to the owners.
However, the alone accountant read the banking report to Rio Tinto and came up with a novel idea in the middle of the night.
He came up with the plan to create a new entity to put a STREAM on the silver production.
- That was the inception of a $21 Billion MCAP company called Wheaton Precious Metals.
The accountant that pulled off the first streaming transaction and built an empire around that financing model eventually became very well decorated:
- The chair of the World Gold Council,
- a Canadian Hall of Fame Member, and
- The founder of GoldCorp which he merged with Newmont to become the world’s largest gold producer.
Ian Telfer is to Gold Mining what Elon Musk is to Cars
Ian telfer shared how it was no easy endeavor.
Even the biggest silver bugs in the world at the time, like Eric Sprott, didn’t quite understand the streaming model nor did they think it would work.
Fast forward 6 years from the inception of SilverWheaton, and Eric Sprott’s #1 silver stock was Silver Wheaton (Called Wheaton Precious Metals today).
For the first time ever, Ian Telfer shares why he is backing one particular gold stock…
Not just financially but with his time and effort.
Because he believes it will be the next big company in the precious metal Royalty and Streaming sector.
This time, Ian won’t have to wait 6 years to get Eric Sprott onboard…
He has already backed the deal alongside his former partner at Sprott, Rick Rule.
- In addition to those three titans, Jimmy Lee, Rob McEwen, Doug Casey, and Warren Gilman have all written large checks and backed this superb management team.
In this exclusive 1 on 1 video I just recorded with him…
Ian Telfer shares in this video the trials and tribulations in building both GoldCorp and Wheaton Precious Metals. What he thinks will happen next with the price of gold and what he is doing with his own money.
Do your portfolio a favor and watch this video, it will definitely be worth your while to learn from one of the living legends in the game, Ian Telfer.
Click here to watch the exclusive interview
Regards,
Marin Katusa
The post Before Market Open… appeared first on Katusa Research.
Categorías: Blogs y foros de trabajar madera en ingles
Commodities Rising
Getting on the right side of a bull market can change your life forever for the better.
Recently, subscribers to my premium research service, Katusa’s Resource Opportunities (KRO), had the opportunity to be part of a stock that – at its peak – was up over 1,547% last week since our entry. (More on that later).
In fact, over a dozen subscribers wrote in that they made 6 figures on that trade in less than 22 months.
Hundreds of others have sent in positive comments to us on the gains they made on just a few of our most recent recommendations. – and we’re truly grateful for all the kind words!
Fortunes like that are made making risk adjusted bets for asymmetric gains.
Risk Adjusted bets for Asymmetric Gains: doesn’t that sound good and sophisticated? Do you know what that even means? Let me explain.
Getting cocky and over leveraging can lead to financial ruin in all markets.
Before you invest, you must understand the mathematical risks associated to the position and the upside of the gain for the risk you are taking.
And then determine, does the pay off warrant the risk.
Right now, the commodity market is incredibly volatile with some sectors nearing their yearly lows.
Meanwhile, other sectors are firing on all cylinders with no signs of slowing down.
Let’s get you up to speed on what I am watching closely right now.
Gold dropped below $1,800 per ounce last week and hit as low as $1,732/oz which sent precious metal stocks abruptly lower.
- A simple indicator I like to use is the percentage of companies trading new 52-week highs and lows for the sector.
As you can see from the chart below, the number of companies near 52-week lows has jumped to nearly 50% in the span of a few months.
The gravitational pull towards the 52-week lows has caused the gold producers and developers to far surpass the declines of bullion.
I have long said that strong balance sheets, scale and margins are rewarded in the gold sector these days, which is proven by the significant underperformance of the junior producers.
Furthermore, passive funds love exposure without operating risk, which again is proven through the royalty group’s dominant outperformance.
The KRO subscribers have been positioned in both the number one performing precious metal royalty company and the number 1 performing energy royalty company in the world.
Considering gold is down 5.4% in September, our precious metal royalty company is up over 25%, and the most liquid and most traded royalty company in its peer group.
Heading in the opposite direction of the precious metals market is the energy market…
Watch For Europe’s Cold Winter: The Colder WarNatural gas, oil, coal and uranium have been on a tear.
Energy prices are soaring around the world. Underinvestment and supply bottlenecks have sent the prices of natural gas and coal skyward in rapid fashion.
- Natural gas inventories in Europe are low and in true Putin fashion, Russia has yet to play all their cards and has left Europe in a tangle.
Watch Gazprom very closely and you will see Putin making some strategic geopolitical moves this winter.
If it is a cold winter, this will further drain natural gas inventory levels and send the prices of natural gas and coal higher.
You can see that natural gas prices have soared in Europe in response to these low inventory levels.
Soaring gas prices mean that it can be economically viable for the socialist green Europe to burn coal to generate electricity. Which is precisely what they are doing.
The price of coal in Europe has gone up 150% this year and is now selling at a 13-year high.
Australian Newcastle coal is up 250%, flirting with 2008 highs. Low Chinese stockpiles coupled with a political fight with Australia has sent domestic prices up 100% for the year while stockpiles remain low.
This week China’s state electricity council stated they would procure coal “at any price”. You can see the price rises in coal below…
There are multiple derivative affects of high natural gas and coal prices.
For one, industries which use natural gas as an input such fertilizer producers are seeing their input costs skyrocket. CF Industries one of the world’s largest fertilizer producers even went so far as to shut down a UK production facility. Average selling prices for urea, an ammonia-based fertilizer have increased 50% since the summer.
Manufacturers will try to pass these costs on to the farmer, who will in turn pass the costs down onto you, the consumer.
Carbon Coming AliveWith more coal being burned we are seeing the price of pollution go skyward.
You can see this through the lens of the European Union Allowance permit, which is compliance market carbon credit. This year we’ve seen prices soar by 80% and by 20% just in the last month.
Note: Many people are asking where to get Carbon prices. The best free resource is www.carboncredits.com and their Carbon Pricing Dashboard.
In North America, carbon is getting more attention…
This week CIBC, one of Canada’s largest banks completed its first successful transaction facilitating a trade between the Nature Conservancy of Canada and a UK commercial bank. I do believe this is just the tip of the iceberg for the carbon market.
Net-zero targets have soared, with over 3,000 companies and over $88 trillion now committed to net-zero emissions.
Take a moment, to consider the magnitude of that dollar figure and the significance of the number of companies pledging these targets.
- KRO readers can look forward to an in-depth outlook on where the puck is going in the carbon market in the coming October issue.
The KRO was the first newsletter in the world to cover the carbon sector and subscribers are sitting on triple digit gains already.
Uranium BreatherElsewhere in the baseload power sector, life is being breathed into the uranium market. Uranium prices touched $50 a pound; a level not seen since 2012.
The Sprott Physical Uranium Trust continues to build its uranium stockpile and chew up spot market inventory.
To date the trust has raised in excess of CAD$500 million and acquired nearly 10 million pounds of uranium in the spot market.
This major move in uranium has sent the share prices of many uranium stocks ripping higher.
And KRO subscribers have been positioned in the number 1 uranium stock year- to-date…
The commodity markets are experiencing incredible volatility these days.
Markets are moving quickly and its critical to stay on the cusp of what is happening if you want to be successful. I’ve been laser focused on the natural resource sector for over 20 years. Spent millions of dollars and learned painful lessons on patience and especially what to avoid.
As a professional fund manager, I’ve had had countless big wins but I’ve learned many hard lessons along the way.
Right now, I believe I am on the cusp of some very big scores just like our big bets in uranium…
And we are very, very early in one of the most exciting sectors of my lifetime.
It all comes to ahead in exactly one month from today, where World War Zero will start.
I get it that not everybody can afford my research. I come from humble roots, was a teacher early in my career and that’s why I go out of my way to provide research for free.
Here are two very valuable research reports that paying subscribers have had access too.
- The exclusive interview between me and a gold legend – David Garofalo.
- Your Education Primer on the Royalty Business – featuring Gold Royalty Corp (GROY.NYSE)
Use them. They are valuable and they may help you make money.
Regards,
Marin Katusa
The post Commodities Rising appeared first on Katusa Research.
Categorías: Blogs y foros de trabajar madera en ingles
No Time to Die: China Banks Edition
Fifteen years ago – almost to the day – I sat in a meeting room at my London-based hedge fund, across the table from the management team behind the world’s biggest IPO. They’d come halfway across the world on a global roadshow to educate investors about their company. There was nothing fancy about this company, no cutting edge tech or innovative business model. It was a bank – the largest in China. After years of Communist party ownership, it was opening itself up to private capital.
The meeting itself was a formality. We wanted stock and they knew we wanted stock. An interpreter sat alongside the most senior executive and questions and answers were routed via her. They told us about their operational reforms, about their financial restructuring and about their strategy to grow fee income. But the investment case was simple: this was the biggest bank in China, home to almost a fifth of the deposits in the country, and an investment in it would grant exposure to the rapid growth of the …
Categorías: Blogs y foros de trabajar madera en ingles
Price Comparison Websites: Go Compare
Turn on any TV or radio in the UK and after a while you will be confronted with an advert for a price comparison website. There are four of them: Moneysupermarket, GoCompare, Confused.com and Comparethemarket. Between them, they spend over £150 million a year on traditional media advertising and a lot more on other marketing. A few years ago, Go Compare’s TV advert – featuring Welsh opera singer Gio Compario – was voted the most annoying in the UK; Comparethemarket’s ad was not far behind.
In some ways these companies are a precursor to the super app that is gaining increasing traction in financial services. This week, PayPal launched a one-stop shop allowing customers to access credit, savings accounts and other financial services from a single app. Like super apps, price comparison sites provide an interface between the customer and the market – a first port of call for customers to access financial services. But the mechanism is quite different, as are the economics.
Price comparis…
Categorías: Blogs y foros de trabajar madera en ingles
Immediate Release: Gold Royalty (GROY.NYSE) Report
This kind of news gets my alligator sense going…
And my attention and action go full throttle.
David Garofalo (CEO) and the team at GROY have pulled off one of the best royalty acquisitions I’ve seen in years in the space.
I must say this team reminds me a lot of the pace Ross Beaty moves at during his formative years.
In fact, GROY is moving a lot quicker than even I expected and things could heat up very soon.
Let me explain…
On September 7, GROY announced a 3-way merger with Golden Valley and Abitibi Royalties.
The largest players in the gold markets (Eric Sprott, Rob McEwen, Jimmy Lee) have signed lock-ups to acquire GROY shares at US$4.80 per share.
What does the share price know that Eric Sprott, Rob McEwen, and Jimmy Lee don’t know? Nothing.
- That’s the point of this alert. This is a mispriced arbitrage opportunity that I personally plan on taking advantage of.
This transaction when closed and completed makes Gold Royalty Corp (GROY.NYSE) a top 10 precious metal and royalty company.
Catalysts:
After this transaction, the new co-market cap of the company will be over $500 million.
- With that, index funds will be required to purchase more shares as per their rebalancing index rules.
In addition, other funds that are required to hold royalty companies will realize that Gold Royalty Corp (GROY.NYSE) is a vastly superior royalty and streaming company than peers with a similar market cap but nowhere near the royalties on quality assets.
- The flow of funds will come into Gold Royalty Corp (GROY.NYSE) and I believe this newly merged entity will rerate post-close.
- The risk is the transaction doesn’t close—that being a larger company is willing to pay more.
- That is possible and in that case, Gold Royalty Corp (GROY.NYSE) walks away with $15 million in break-up fees for their efforts.
There has only been one financing with this company and that was almost exclusively taken down by KRO subscribers.
I am very impressed with David Garofalo and his team thus far.
And I fully understand why the smart shareholders of Golden Valley and Abitibi like Jimmy Lee and Rob McEwen signed hard lock-ups with Gold Royalty (GROY.NYSE) because they see the re-rate potential in the share price.
Click Here to download your full report on Gold Royalty Corp (GROY.NYSE).
Regards,
Marin Katusa
Founder, Katusa Research
Details and Disclosures
Katusa Research, Marin Katusa and its directors, employees, and members of their households directly own shares of the following Companies which are described in this publication – Gold Royalty Corp (GROY.NYSE). Therefore, Katusa Research is extremely biased. All publications of Katusa Research represent only the opinion of the respective authors and not of the company. Gold Royalty Corp did not review this report or articles. The information in the publications of Katusa Research do not replace and are not to be taken as individual needs geared professional investment advice and is for informational purposes only.
This report and information are neither explicitly nor implicitly to be understood as a guarantee of a particular price development of the mentioned financial instruments or as a trading invitation. Every investment in securities mentioned in publications of Katusa Research involves risks which could lead to a total loss of the invested capital and—depending on the investment—to further obligations for example additional payment liabilities. Katusa Research does not guarantee that any of the companies mentioned in this newsletter will perform as we expect, and any comparisons we have made to other companies may not be valid or come into effect. All information published in publications from Katusa Research is based on public filings and news releases.
The post Immediate Release: Gold Royalty (GROY.NYSE) Report appeared first on Katusa Research.
Categorías: Blogs y foros de trabajar madera en ingles
BREAKING: Watch Marin’s Interview
Yesterday I broke the news to all of you… readers of Katusa’s Investment Insights.
“Marin, this is going up multiples.”
That was the line that David Garofalo, the CEO of Gold Royalty (GROY.NYSE) told me at a dinner recently.
He had my full attention from that point on.
David Garofalo (CEO) and the team at Gold Royalty (GROY.NYSE) have pulled off one of the best royalty acquisitions I’ve seen in years in the space.
Today you’re going to see one of the top managers in all of the gold mining in an exclusive 1 on 1 interview with me.
And I want everyone to pay attention to what this is about.
- First of all, I have never seen, ever in my career, a management team execute with this much precision and time.
- Secondly, they’re going after a royalty on Canada’s largest producing mine that’s already in operation, talk about de-risked.
FULL DISCLOSURE: I Marin Katusa am a severely biased, large shareholder of Gold Royalty (GROY.NYSE). If that bothers you then do not buy the stock. I continue to be a buyer of the stock. And you’ll learn more about why in my exclusive interview with David Garofalo.
In this interview you’ll learn:
- Why I believe this project is severely de-risked
- Why billionaire mining legends like Eric Sprott, Rob McEwen, and Jimmy Lee have acquired more stock and have agreed to a share lockup (hint: they’re bullish)
- The significance of the Malartic Mine transaction
- The potential of a “Double Bump” and what that means for anyone that owns shares of Gold Royalty (GROY.NYSE)
It’s not often that I release an exclusive report behind our $3500 paywall.
Or a full-out member-only conversational video for KRO subscribers that features someone of David Garofalo’s pedigree.
But you’re getting a seat at the table, so you can see the kind of depth and opportunities we uncover at Katusa Research.
Click here to watch the interview with David Garofalo.
Best,
Marin Katusa
Founder, Katusa Research
Details and Disclosures
Katusa Research, Marin Katusa and its directors, employees, and members of their households directly own shares of the following Companies which are described in this publication – Gold Royalty Corp (GROY.NYSE). Therefore, Katusa Research is extremely biased. All publications of Katusa Research represent only the opinion of the respective authors and not of the company. Gold Royalty Corp did not review this report or articles. The information in the publications of Katusa Research do not replace and are not to be taken as individual needs geared professional investment advice and is for informational purposes only.
This report and information are neither explicitly nor implicitly to be understood as a guarantee of a particular price development of the mentioned financial instruments or as a trading invitation. Every investment in securities mentioned in publications of Katusa Research involves risks which could lead to a total loss of the invested capital and—depending on the investment—to further obligations for example additional payment liabilities. Katusa Research does not guarantee that any of the companies mentioned in this newsletter will perform as we expect, and any comparisons we have made to other companies may not be valid or come into effect. All information published in publications from Katusa Research is based on public filings and news releases.
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Categorías: Blogs y foros de trabajar madera en ingles
[ALERT] Gold Royalty Corp
David Garofalo (CEO) and the team at Gold Royalty (GROY.NYSE) are pulling off one of the best royalty acquisitions I’ve seen in years in the space.
The pace at which this team move reminds me of mining legends like Ross Beaty, Lukas Lundin, and Robert Friedland.
This is exactly how those guys ran their massive scores during the early years—only faster.
In fact, Gold Royalty (GROY.NYSE) is moving a lot quicker than even I expected. And I don’t expect anything less than lightspeed with companies I’m involved with.
The details get a little complex, but trust me—it’s worth it…
FULL DISCLOSURE: I, Marin Katusa, am a large shareholder of Gold Royalty Corp. Thus, I am extremely biased. And that’s why I’m buying more shares.
So, let’s get right to it…
KATUSA ALERT:The is the single best assembly of gold mining legends I have ever seen
Here’s how it went down…
On September 7, Gold Royalty Corp (GROY.NYSE) announced a 3-way merger with Golden Valley and Abitibi Royalties.
Why?
Canada’s largest producing gold mine at 700,000 ounces a year is called Malartic, which is located in the province of Quebec and is ranked as the #1 mining jurisdiction in the world.
It’s owned and operated by Agnico Eagle and Yamana.
- Agnico is a top 5 gold producer in the world and David Garofalo was the CFO at Agnico while it created its first few gold mines in this region.
Abitibi owns a 3% NSR over the Odyssey Underground Portion which is the next portion of the Malartic gold mine.
Currently, the mine is an open pit. Phase two is underground.
The grades are incredible, and it will be the largest underground mine in Canada when in operation.
Now we want you to connect the dots of the billionaire investors in the gold space…
The two companies merging with Gold Royalty are majority-owned by some of the largest players in the gold markets: Eric Sprott, Rob McEwen, and Jimmy Lee.
If you’re not familiar with them, let me put faces to these names…
- Eric Sprott was the largest shareholder of Kirkland Lake, the best performing major gold producer since 2015.
- Rob McEwen is the founder and CEO of Goldcorp, which got a $10 billion buyout. He backed New Found Gold at $0.50 two years ago… and it hit a recent high of $13.50.
- Then there’s Jimmy Lee, a brilliant billionaire investor you’ve probably never heard of. When silent, self-made billionaires like him make huge bets, watch closely.
Each of these men has signed up for hard lock-ups with their Gold Royalty shares.
In other words, instead of cashing in, they’re doubling down.
They clearly see the “double bump” re-rate potential in the share price.
This is Better than Our First Entry
When GROY went public, we had a lot of emails of subscribers asking when they could buy stock.
We said to be patient.
- Now the largest shareholder of Gold Royalty (GROY.NYSE), Eric Sprott has acquired more stock just under the current trading price of $5 per share.
The shares are very liquid and list on the New York Stock Exchange (NYSE).
Patterns To Success
There are certain things the ultra-successful do that the rest don’t. When it comes to investing, the ultra-successful always start with the management team.
Second, is a world-class portfolio of projects that they can buy below its true value.
That is exactly why Eric Sprott, Rob McEwen, Rick Rule, Doug Casey, Jimmy Lee, Ian Telfer, Warren Gillman, and many other incredibly successful and rich gold investors are not only shareholders but also acquiring shares now.
- This transaction, when closed and completed, makes Gold Royalty Corp a top 10 Global precious metal and royalty company.
That is just the start, the company has only been public for less than 6 months.
Other than the Big 4, no other royalty or streaming company have a tier 1 asset like a 3% NSR on a portion of the largest operating gold mine in Canada.
- With this transaction, Gold Royalty (GROY.NYSE) has 72% of their NPV coming from the two best jurisdictions globally in mining (Quebec and Nevada).
The rest in Alaska (3), Idaho(3), Oregon(3), New Mexico(2), Ontario(19), North West Territories(5), Brazil(4), Peru(1), and Columbia(3).
Post this transaction, the company will have 6 royalties on producing assets, 7 royalties in development with near-term cash flow.
This puts it at the top with MCAPs under $1B.
Size Matters
After this transaction, the new co-market cap of Gold Royalty (GROY.NYSE) will be about $500million.
- With that, index funds will be required to purchase more shares as per their rebalancing index rules.
In addition, other funds that are required to hold royalty companies will realize that Gold Royalty Corp (GROY.NYSE) is a vastly superior royalty and streaming company than peers with a similar market cap but nowhere near the royalties on quality assets.
The flow of funds will come into Gold Royalty (GROY.NYSE) and I believe this newly merged entity will rerate post-close.
The risk is the transaction doesn’t close: That being a larger company is willing to pay more.
That is possible and in that case, Gold Royalty (GROY.NYSE) walks away with $15million in break-up fees for their efforts.
There has only been one financing with this company and that was almost exclusively taken down by KRO subscribers and was extremely oversubscribed.
I am very impressed with David Garofalo and his team thus far.
Tomorrow morning pre-market open, I will send you an exclusive interview I just put together with David.
You will want to make time for this interview.
I show up representing the shareholders asking tough questions and David Garofalo delivers big time.
I fully understand why the smart shareholders of Golden Valley and Abitibi like Jimmy Lee, Eric Sprott, and Rob McEwen signed hard lock-ups with Gold Royalty (GROY.NYSE) because they see the re-rate potential in the share price.
FULL DISCLOSURE: I, Marin Katusa, am biased. I believe in the management team and have bought stock in the open market on the NYSE. I am a significant shareholder of the stock and thus very biased. I’m doing this because not everyone can afford my premium research reports and I believe in David Garofalo and the team at Gold Royalty (GROY.NYSE). Go GROY Go.We will prepare a full report on the company and the breaking news for you.
Regards,
Marin KatusaFounder, Katusa Research Details and Disclosures
Katusa Research, Marin Katusa and its directors, employees, and members of their households directly own shares of the following Companies which are described in this publication – Gold Royalty Corp (GROY.NYSE). Therefore, Katusa Research is extremely biased. All publications of Katusa Research represent only the opinion of the respective authors and not of the company. Gold Royalty Corp did not review this report or articles. The information in the publications of Katusa Research do not replace and are not to be taken as individual needs geared professional investment advice and is for informational purposes only.
This report and information are neither explicitly nor implicitly to be understood as a guarantee of a particular price development of the mentioned financial instruments or as a trading invitation. Every investment in securities mentioned in publications of Katusa Research involves risks which could lead to a total loss of the invested capital and—depending on the investment—to further obligations for example additional payment liabilities. Katusa Research does not guarantee that any of the companies mentioned in this newsletter will perform as we expect, and any comparisons we have made to other companies may not be valid or come into effect. All information published in publications from Katusa Research is based on public filings and news releases.
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Categorías: Blogs y foros de trabajar madera en ingles
Gold Stock DOUBLE BUMP Coming
A couple of weeks ago, I went out for dinner with the CEO of a gold royalty company.
He lowered his voice, leaned across the table…
…and told me something you almost never hear from someone in his position:
“Marin, this is going up multiples.”
There are no guarantees, but I think he’s right…
The ink wasn’t even dry on their last deal before they put out more news.
In short, they are a commando team…
I have never seen, ever in my career, a management team execute with this much precision and efficiency.
But that’s what happens when the best executives in mining, who have skin in the game…
Are backed by the most successful and experienced billionaires in the sector execute their business plan.
Second, they are nowhere near done with their business plan. This is getting exciting as a shareholder.
Thirdly, this one gold stock (that I will reveal tomorrow)… Is going to experience what is called the “Double Bump”.
That is when the big index funds must buy the stock and the shares of the company get re-rated to its inherent and peer valuations.
And everyone has a chance to become an investor at the same price as the richest gold investors in the world who have signed 3-year lock-ups on their shares.
Why would the billionaires sign such a contract?
Because they see the share price going a lot higher and it’s a move to show management their commitment to the deal. Talk about de-risked.
- The biggest names in the gold sector (which I’ll reveal tomorrow) have done the due diligence and have made large financial investments.
Now you get a chance to see what the best in the business get to see.
The “Double Bump”
There are the two words this one gold stock has that NO ONE ELSE has.
Here’s how the double bump works…
It implies the stock will get a re-rating, meaning the share price is expected to go higher, as explained to me by a billionaire investor and shareholder in the company.
One gold titan who is a shareholder revealed something incredible…
- “I want a double bump. I don’t want to cash out. I’ve got enough money. I want to see the potential for a re-rate.”
When insiders don’t want to cash out… and they tell you it’s going up multiples… and they’re executing with lightning speed… pay very close attention.
They know exactly what’s going on.
You should too.
It will be your first-ever opportunity to see the full details of a company behind the KRO paywall.
So, watch your inbox first thing tomorrow morning.
And fasten your seatbelts.
Regards,
Marin Katusa
Founder, Katusa Research
Details and Disclosures
Katusa Research, Marin Katusa and its directors, employees and members of their households directly own shares of the following Companies which are described in this publication – Gold Royalty Corp (GROY.NYSE). Therefore, Katusa Research is extremely biased. All publications of Katusa Research represent only the opinion of the respective authors and not of the company. Gold Royalty Corp did not review this report or articles. The information in the publications of Katusa Research do not replace and are not to be taken as individual needs geared professional investment advice and is for informational purposes only.
This report and information is neither explicitly nor implicitly to be understood as guarantee of a particular price development of the mentioned financial instruments or as a trading invitation. Every investment in securities mentioned in publications of Katusa Research involve risks which could lead to a total loss of the invested capital and—depending on the investment—to further obligations for example additional payment liabilities.Katusa Research does not guarantee that any of the companies mentioned in this newsletter will perform as we expect, and any comparisons we have made to other companies may not be valid or come into effect. All information published in publications from Katusa Research is based on public filings and news releases.
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Categorías: Blogs y foros de trabajar madera en ingles
Banking the Poor
There’s a disconnect that sits at the heart of banking: the people with the highest demand for loans aren’t the ones banks want to lend to. More often than not, it’s because they don’t have collateral – and there’s nothing a bank likes more than collateral. A private bank will lend you as much as you want against the value of your stock portfolio; a mortgage bank will do the same against the value of a house. It’s more difficult if you haven’t got a brokerage account, or any real assets, or even a bank account. Globally, around 1.7 billion adults didn’t have a bank account when the World Bank last did a survey, in 2017.
One of the ways round this, if you want to avoid usurious interest rates, is to find a guarantor.
Jonathan Swift – the author of Gulliver’s Travels – took up a sideline doing this form of lending in his home town of Dublin in the eighteenth century. He set up a small fund to lend to poor but creditworthy tradesmen who had projects that promised high returns on investmen…
Categorías: Blogs y foros de trabajar madera en ingles
Boom Signal
Ultra-low interest rates and non-stop money supply growth are fueling the race to the bottom for global currency devaluation.
Frightening StatsFor instance, did you know that the global money supply has grown by over 5x in the past 20 years?
Here’s a chart that shows global money supply growth over the last two decades:
Massive amounts of government stimulus, negative interest rates, and ultra-low bond yields around the world have paved the way for soaring gold prices these past two years… setting investors up for a run at another long bull market.
The exciting part is that there’s still a lot of room left to run…
A major bull market can make any investor feel like an expert because a rising tide usually lifts all boats.
That said, there are always a few boats that rise much higher and faster than the others.
These are the investments that professional investors, fund managers, and billionaire resource speculators target for big wins.
A License to Print MoneyIn this crazy world we live in, there are few certainties.
Frankly, anyone peddling you a “sure thing” investment should be treated with extreme caution and skepticism.
But there’s one small corner of the market that’s created an incredible margin of safety for their operations, based around their profit margins.
It’s a unique business model that’s been copied by some of the world’s leading companies.
- Recently, Bill Ackman – one of the world’s leading hedge fund managers – raised billions of dollars trying to break into the sector.
What’s this mysterious line of business, you ask?
It’s the royalty business, and it’s applicable across many different industries.
Music, mining, oil and gas, TV shows and movies, and even oil change businesses are just a few of the many industries where you can find royalties at work.
Happy Birthday, Now Pay UpHave you ever heard the song “Happy Birthday?”
Of course, you have.
But what you probably didn’t know is that the royalties on the song brought in over $50 million to its owners, most recently Warner Music, just from it being used in movies and T.V.
Yes, the Happy Birthday song, the same one you’ve been singing since you were a kid, used to actually be under copyright owned by Warner Music and cost $25,000 each time it was used.
Songwriting brothers George and Ira Gershwin wrote an entire catalog of hits between 1920 and 1937.
- Today, their heirs make around $8 million per year in royalties from songs written nearly a hundred years ago.
More recently, Michael Jackson’s estate was paid $750 million to buy out 50% of his collection of music royalties.
Here’s the strange part of that story: the bulk of the song royalties weren’t even his. Michael Jackson bought the rights to over 4,000 songs, including 250 Beatles songs.
The Royalty Blueprint & Case StudyPioneered in the 1980s by two Canadians, Pierre Lassonde and Seymour Schulich started the first gold royalty company in the world, the original Franco Nevada.
They built the company on the simple framework of “exchange cash today, for a share of tomorrow’s production”.
Below is a chart which shows the “old” Franco Nevada’s incredible rise from CAD$0.21 per share and a market capitalization of CAD$2 million…
To the eventual buy-out by Newmont for CAD$2.5 billion at over CAD$33 per share.
That’s an incredible 15,614% return…
Following the exact same blueprint as the original Franco Nevada, a “new” Franco Nevada went public in 2007.
- Over the last 14 years, the stock has appreciated over 1,100% while gold has gone up 130%.
This should help further highlight the tremendous potential offered by investing in world-class royalty and streaming businesses.
By now, it should be very clear that gold royalty companies make for excellent investment opportunities.
The only question left is: which one to invest in?
Royalties and Streams Are Best Made in Hated MarketsTwo years ago, I was pounding the table on a company I was buying a lot of.
It was in a sector (uranium) that was cheap… it was hated… and no investor or media company wanted to go near it.
That’s when alligator investors like me spend MONTHS doing our due diligence. Except there were hardly any other investors.
This worked to my advantage.
Subscribers and I were able to position ourselves in a royalty company that was a first mover in the uranium industry.
- Fast forward 20 months later and my subscribers and I are up over 701% on that investment as of this writing.
Most importantly, this isn’t some illiquid nano-cap—it’s listed on the BIG U.S. exchanges. Primetime.
And the party’s just getting started. That was one corner of the resource sector where there was NO competition.
I get a real kick out of the poser gurus on social media who would send out messages in 2019 saying “Katusa failed” with his uranium play.
To all the haters, just look at the score—and nobody is doing better than the Katusa subscribers. Nobody.
Was it high risk and was patience required, yes. Nothing is ever guaranteed.
But if you’re not a subscriber to my premium research letter, you’re probably wondering what the next big score will be…
Well, you’re in luck.
Imagine if Bill Gates, Jeff Bezos and Elon Musk all backed a company in the tech sector.
How badly would you want to be an early investor? – I know I would.
Setups like this don’t happen often. And they’re definitely not like clockwork, but when you spot them, be prepared to act.
Because – if I’m right again – I’m convinced it will be another big score.
Regards,
Marin
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Categorías: Blogs y foros de trabajar madera en ingles
The Uranium Frenzy is On
Nuclear energy is carbon neutral, powers 1 in 5 homes in America, and is the cheapest operating source of baseload power in America.
After 10 years in a brutal bear market, uranium prices have roared to 6-year highs.
Bloomberg headlines are rolling and YouTube and Twitter algos are blasting uranium stories on everyone’s feeds. Even WallStreetBets (of AMC and GameStop fame) is in on the action, having alerted their members.
Here’s the deal, uranium stocks are at multi-year highs.
So pop quiz: What has changed in the uranium market to jumpstart this frenzy?- Are utilities finally waking up and buying physical uranium in the market again?
- Are nuclear reactors finally going to get the credit for being the only net-zero baseload power option?
- Or is someone trying to corner the market?
If you answered C, you’re right.
But I’ll add that it’s C with a radioactive twist.
I’ll explain all the details from the perspective of the largest financier of uranium from 2017-2019. And from someone with a Rolodex of the largest players in the uranium sector, globally.
The New Player in Town: Cornering The Uranium MarketThe company formerly known as Uranium Participation Corp was renamed and repurposed as an investment trust.
Its name today is the Sprott Physical Uranium Trust and it has now become the largest buyer of physical uranium.
How are they doing it?
It’s a technique called the ATM or At The Market financing.
- An At The Market (ATM) facility allows the company to conduct financings on demand. This capital then is used to buy up physical uranium in the spot market.
Below is a chart which shows the cumulative ATM financing during the last ten days of August via the Sprott ATM facility.
The spot market price traded at $40.25 per pound earlier this week. These levels haven’t been seen in 6 years. Investors are taking notice and it’s become the hottest commodity and dominating the news cycle.
Going back to the ATM money available to Sprott … all the cash raised is then used to buy uranium in the spot market.
The relationship is very clear…
Uranium Stocks are Spiking Higher
I don’t think there is a single uranium stock that has not appreciated in the last 2 weeks.
Out of the 50+ uranium names I follow, none have negative returns since August 2021.
So, What Comes Next?
The initial size of the Sprott ATM is CAD$300 million.
This means they can issue up to CAD$300 million worth of the trust’s stock, which in turn represents CAD$300 million of physical uranium buying power.
Sprott has tapped into $230M thus far of the $300M facility.
- Given the rapid success, my guess is the team at Sprott will likely try to size up the ATM to CAD$500M or the maximum amount allowable without a shareholder meeting (time is of the essence). This could mean hundreds of millions of dollars worth of uranium buying.
- But, how long will it take for Sprott to get approvals from the regulators to reload their ATM financing?
- In addition, for Sprott to go “Prime Time”—they will need to list on a major US exchange (something I’ve been talking about for years). And I’ll bet my old partner, Rick Rule (who is the brainchild of this at Sprott) that a major U.S. Listing doesn’t happen before U.S. Thanksgiving. Regardless, I applaud the Sprott team for their efforts, strategy, and execution—well done!
It’s a significant tailwind for the uranium market.
The goal is to get the uranium trust listed in the US where it can go after the really big money. The catch there is getting listed is not a flip of the switch, this will take months to sort out.
Whenever you have lawyers involved, you can expect a process of over-promise, overcharge, and under-deliver.
Expect time delays, as it’s part of the training lawyers get during their articling (Billing Success 101). To all the overzealous lawyers, I’m kidding, but seriously, your industry needs a serious wakeup.
In the meantime…
Options Watch: The YOLO traders are comingKnown as WallStreetBets on Reddit, this group of traders infamously created chaos in the markets earlier this year with their Gamestop (GME) and AMC Inc (AMC) short squeezes.
It brought hedge funds to their knees.
It looks like some of them have begun to buy deep out of the money call options.
Call options for September 17th which expire in 10 days with an exercise price of $35 now have an Open Interest of 139,163 contracts.
- Over 50,000 contracts were purchased in the past few days. Making it the largest open interest of any Cameco option contract.
Each option contract represents the right to buy 100 shares of Cameco at $35 per share. Contracts were bought for pennies, rendering it the exact type of trade the WSB crew makes.
Someone has to sell these traders the call options, banks or option dealers will “hedge” their risk through buying Cameco stock in the open market.
Once this WSB engine gets going it is hard to stop, as proved in GME and AMC.
The one Achilles heel of the WSB group is most trade on retail platforms which won’t have access to the Canadian exchanges which is where most uranium stocks trade.
In addition, only a few uranium stocks have options available for the YOLO trade.
How High Can Uranium Prices Go?The unique part of the uranium market is that demand is virtually inelastic.
Utility companies need to buy uranium to fuel their reactors, regardless of cost.
- Whether uranium is $45 per pound or $450 per pound the cost per kilowatt-hour difference is a rounding error compared to a similar price pop in natural gas or coal.
- For example, a 1000% increase in uranium price will result in a 24% increase in electricity generation from a nuclear reactor.
A similar 1000% increase in natural gas will result in a 720% increase in electricity generation on average for the utility.
The Utilities know this, and so do you now. Team Sprott and WallStreetBets Crew, feel free to quote our math.
Now, uranium has seen some incredible swings over the last 90+ years.
Both major bull markets in uranium saw prices for yellowcake skyrocket by over 10-fold.
You would think the mega booms and busts would attract enormous amounts of capital to the uranium market. Not to mention the fact that close to 20% of America’s electricity comes from uranium.
But in fact, it’s nearly the opposite.
The uranium market is tiny. It’s a mere fraction of its precious metal or base metal miner peer groups and is dwarfed by its older cousin oil and gas.
Enter The Passive Funds
In the last Uranium cycles, the Passive funds (which were a fraction of the amount today) had no way to play the general uranium price with Liquidity.
The uranium ETF option was a joke and wasn’t a true proxy to the uranium price, and didn’t have the liquidity required to meet the passive funds’ criteria.
The miners were debt-heavy and not an ideal option.
But Sprott provides a platform for Passive funds.
And today, Passive funds exceed the amount of capital managed than Active Funds.
That means, algos and computers manage the buying and selling. And when those algos start buying, watch out.
Uranium Returns Can Be ExplosiveWhen uranium heats up the moves in uranium stocks become extremely explosive because there are so few ways to play the space.
In the bull run from January 2004 through June 2007, many uranium stocks soared hundreds of percent.
Cameco, the world’s largest publicly traded producer went up over 300%. While smaller speculative plays soared thousands of percent.
Year to date, myself and subscribers have been strategically rotating in and out of uranium names.
We’ve locked in several good “base hits” and are sitting on a year-to-date gain of over 150% on our largest position.
The uranium market is one of the most hated and loved sectors out there. ’ve made my share of thousand percent gainers.
In fact…
- One of the uranium stocks I and my subscribers to Katusa’s Resource Opportunities had, was up as much as 860% here in 2021.
And we got those shares FOR FREE.
“Impossible” you might think.
But hundreds of people had the same opportunity with this uranium stock (and even a copper stock that’s gone up over 1000% they got for free, too!).
Here’s a sample of what a few of our subscribers wrote to us after their winning uranium profits…
From Ken M.,
“Very pleased with this one and your overall service. Up 250% to date!!
And Bobby M.,
“I believe the bull market in Uranium is still in its early innings. Subscribing to Katusa Research…has been one of the best financial decisions I ever made.”
And Kevin B.,
“I got a little squeamish when this stock had tripled, and so I sold enough to cover my initial cost (a free ride) and kept the rest. I did this just before you sent your subscriber alert about the stock…next time, I might wait a little longer before I lose my nerve and start to sell… It paid for my subscription, and then some!”
And from Calvin W.,
“Thank you! Not only because you help me make a lot of money, most importantly, Marin and every one of you set up a role model for us – what a decent person should be. It’s truly my honor to (be) a member of the Katusa Research family.”
I’ve been to all the major projects around the world and have contacts at the highest levels of the market.
I am the only resource analyst and investor who was asked by the ‘World Nuclear Fuel Market’ to give the keynote speech at the Paris 2015 Conference, where the utilities meet with the producers and traders to lock in their purchases.
While on stage, my joke was that the conference reminded me of a high school dance…
But rather than the boys on one side of the hall and the girls on the other side, we had the Americans on one side and the Former Soviet Union members on the other. The Russians found my comment funny.
Previously, I laid out the absolute worst case for uranium and proceeded to make significant bets and investments accordingly.
We even did an interview with an executive of the world’s largest uranium producer and a major player in the uranium markets (who never does interviews with people in the west) – back when NO ONE was talking about uranium.
You can watch it right here, for free.
Our patience and bets are being rewarded in real-time.
Because this squeeze is unlike any other I’ve seen in my career.
Fasten your seat belts.
And thank you to all the alligators for believing in me, you deserve every profit you will make, well done, and stay safe.
Marin
P.S. if you’re not a member of Katusa’s Resource Opportunities, click here to learn all about what we do.
The post The Uranium Frenzy is On appeared first on Katusa Research.
Categorías: Blogs y foros de trabajar madera en ingles
Next Steps for Net Interest
Welcome back to Net Interest, my newsletter on financial sector themes. I hope you had a good summer; I spent time in the Scottish Highlands walking hills and sampling whiskies. It gave me time to ponder the next steps for Net Interest, and I’ve decided to introduce a paid tier. Read on and I’ll explain...
About a year ago, I wrote a piece on the equity research industry. It was a big industry once, but it’s been in decline. This year, asset managers will spend around $13.7 billion on traditional investment research globally, down from the $17 billion or so they spent in 2015. The era of the rock star equity research analyst passed a long time ago, yet revenues continue to fall.
The reasons for the decline in the industry lie in its economics. It isn’t that demand for research product is waning; the amount of money active in seeking out investment returns around the world only goes up and the leverage such money can extract from a good piece of research is immense. Rather, the value chain that supported the traditional model is being rebuilt.
One catalyst for this was regulation. At the beginning of 2018, a new regulation – MiFID II – took effect in Europe. Among other things, it forced asset managers to cover the cost of research themselves rather than pass it on to their clients inside trading fees. Unsurprisingly, this led to a reassessment of the value they place on research; it’s easy to try the lobster when someone else is paying.
Many independent research-led brokers were hit hard. One of them was Redburn, a London-based firm with 200 employees. Revenues are down 25% from their pre-MiFID II peak and in its recently filed accounts for 2020, the company complains that “the aggregate equity research market wallet…remains under pressure… [I]t is proving challenging for the core business to generate meaningful growth in this market, given the market size headwinds.”
Yet while equity research providers gnash their teeth at the unbundling of research from trading, another unbundling has been taking place within equity research itself. Just as in related sectors like media, equity research offers a range of services which are increasingly being picked off by specialist providers. It’s this unbundling that explains the continued decline in investment research revenue. Services include:
sharing industry knowledge
facilitating access to company management and to industry experts
publishing summaries and analyses of company filings like S-1s and earnings reports
lending a sounding board for investors to bounce ideas off
hosting company earnings models
feeding consensus earnings estimates
making stock calls
maintaining oversight on company management
building networks for institutional investors
promoting their firm’s brand
and much more, depending on research analysts’ entrepreneurial flair.
Take access to company management. Equity research providers used to host grand conferences, taking over entire hotels to intermediate meetings between investors and corporate executives. As an investor I would routinely fly to New York or Florida to meet with CEOs in airless hotel rooms, paying Goldman Sachs or Credit Suisse for the privilege. Now, a lot of that can be done online at lower cost. Earlier this year, OpenExchange, a provider of virtual event solutions, raised $23 million in series D funding to fuel its growth. The company managed 4,000 meetings in 2019 but that jumped to over 100,000 in 2020 and 84,000 in the first half of 2021.
Or take access to experts. Firms focussed on introducing investors to industry experts have been around for a while; indeed some of them became embroiled in an insider trading probe in 2010. But they’ve been showing strong growth recently, earning over $3 billion of revenues in 2020, with investment managers comprising some of their best customers. Gerson Lehrman Group (GLG) is the market leader [disclosure: I’m one of their experts] – they earned over $600 million in revenue last year – but lots of new entrants have come to the market, including Tegus, which retains a library of transcripted calls. The leading provider in China, Capvision, recently filed to go public in Hong Kong; it’s grown its revenues by 29% per annum over the past two years and now does close to $100 million in sales.
Across the whole spectrum of jobs to be done in equity research, new entrants are pecking away. Canalyst raised $20 million of series B funding in 2019 to do earnings models. Companies like Procensus offer a platform for institutional investors to share opinions and forecasts directly. Traditional data providers like Bloomberg are pushing up into research to secure positioning in their core market. And although not a startup, the Financial Times did more to bring Wirecard management to account than most research analysts. One analyst highlighted the conflicts that can arise from bundling when she told a German parliamentary inquiry: “It is an analyst’s job to sell ideas. Wirecard was one of my strongest recommendations.”
Finally, there’s industry knowledge. Traditionally this was sold at a very high price to a small number of clients. Redburn, for example, has no more than a thousand clients. But the low cost of internet distribution opens up a much larger potential market at a lower price point. A pioneer here is Ben Thompson, who offers tech industry knowledge and strategic insight via his Stratechery newsletter. He is estimated to have between 25,000 and 30,000 customers. His ideas have even been repackaged by traditional equity research houses and passed off as their own:
Ben Thompson @benthompsonIdeas are free but “Source: Credit Suisse” is a bit muchAlex Persson @PerssonAC
@benthompson Credit Suisse blatantly copying your work and not providing credit where credit is due. https://t.co/Wnplsl3gEzAugust 8th 2018
89 Retweets880 LikesAll of which brings me to Net Interest.
When I launched Net Interest in May 2020, I never really grasped the power of the internet. I had spent over 20 years in public markets, first in equity research and then as a partner of one of Europe’s premier hedge fund firms, analysing and investing in financial services firms throughout. At peak, my team and I managed $4 billion of assets in the sector, which we deployed, long and short, around the world. Although I’ve given up managing other people’s money, I maintain a keen interest, particularly in fintech, and thought it would be fun to write down what I was thinking about each week.
Over 60 issues later, we are at more than 23,000 subscribers. Readers include CEOs and CFOs of some of the biggest financial institutions in the world, founders of some of the most exciting startups, and investors at some of the highest performing funds across venture and public markets. The email open rate is around 45%, which I’m told is quite good, and top posts are read by up to 50,000 people.
a.image2.image-link.image2-410-738 { padding-bottom: 55.55555555555556%; padding-bottom: min(55.55555555555556%, 410px); width: 100%; height: 0; } a.image2.image-link.image2-410-738 img { max-width: 738px; max-height: 410px; } Net Interest subscribersThe content isn’t equity research in the fully bundled sense. I don’t make stock calls nor do I publish earnings models. In addition, I write a lot about private companies whose securities don’t trade. But the industry knowledge is there, built on 25 years of experience. In fact, as an investor, I often observed a gap in the market for historical, contextual research – simple explanations for why an industry came to be and the longer term dynamics at play. Net Interest is my contribution to filling that gap in the financial services sector.
From today, I’m adding a paid tier. The weekly long form piece will remain free, but paid subscribers will have access to three supplementary features:
More Net Interest, in which we highlight breaking themes in the industry
Instant access to the full Net Interest archive, complete with comprehensive search functionality
Invitations to conference calls I’ll host on topical issues
I’m excited by what Net Interest has accomplished over the past year and I’m ready to take it to the next level. I’m emboldened by some of the great endorsements I’ve received from some very demanding readers:
After I wrote about Jamie Dimon in one of my first pieces, Inside the Mind of Jamie Dimon, I received a surprising email: “You did a very good job and I was impressed with your effort. It was fun for me to read...”
After I wrote about Blackstone, the man who knows the company better than anyone wrote to say: “Your domain knowledge and specific knowledge about our firm is remarkable. You really understand how the business works and what the drivers are for our growth and profits.”
And after I wrote about Indian fintech giant Paytm, its founder and CEO tweeted: “Super interesting read, even for me … It’s pleasure to read an article so well detailed and balanced, when we have never talked or interacted ever before!”
In addition, plenty more executives, founders, hedge fund managers and venture capitalists have written to say how much they enjoy Net Interest. One reader tweeted: “Very insightful, thought provoking, informative and his experience shows up in every one of his posts. @MarcRuby is part historian, part finance professor & 100% awesome.”
That’s nice, but where’s the value for me?Net Interest provides three services to help operators and investors navigate the evolving financial services sector:
Frameworks. For beginners to the financial services sector and experienced professionals alike, Net Interest provides a series of frameworks to help analyse what’s going on. As well as looking at ways to think about traditional banking, we’ve explored the economics of fund management, how investment banking works and the shifting power dynamics between Wall Street brokers and global exchange groups.
Teardowns. S-1 teardowns are great. I’ve contributed to a couple (Coinbase, Affirm) and I’ve written up a few here too (eToro, Wise) but pre S-1 primers of private companies on the path to going public are a step ahead of the crowd. Net Interest has published several: on Ant Group of China and on Paytm of India months before either filed their prospectuses; and on Revolut and Klarna which have yet to file.
Calls. OK, I don’t make stock calls; I prefer to leave the last mile up to you. But I can get you close. On the long side, I’ve written up Square, Tinkoff and Irish banks. The stand out is Tinkoff, up 120% since publishing at the beginning of the year. It doesn’t always go as planned of course. I wrote up Galaxy Digital Holdings, the Goldman Sachs of crypto, in April, and its stock hasn’t recovered since.
On the short side, the standout is Greensill. Steve Clapham and I laid out all the red flags nine months before the company’s collapse. Our piece was even highlighted at a UK Parliamentary hearing into the matter. As a private company, there’s not much most readers could have done with our analysis on the investing side. But we hope that some of the VCs out there took note when Greensill tried to raise fresh capital later in the year. More actionable may have been Evergrande, which we discussed in July; it’s down a lot since then. Again, though, it’s not all one way traffic. I was pretty sceptical of Robinhood’s prospects at IPO and that stock is up almost 20% since.
What will it cost?The subscription price is $250 per year, or $25 per month.
In addition, I am opening up just 25 slots for institutional members. These members will receive a more personalised service, where I will be available for quarterly one-on-one calls. The price for an institutional membership is $5,000 per year.
Compared to the tens of thousands of dollars that asset managers pay for bundled equity research, either of these subscription plans represents a very good offer. My pitch to you is that if this newsletter can help you make one better decision each year, it’ll pay for itself. And if it doesn’t, you can cancel anytime.
When will this change happen?The first subscriber-only post will go out next week, 10 September.
There’s plenty in store for the months ahead. Coming soon is a write-up of M-Pesa, the original ‘digital wallet’ born in Africa. There’s a piece on the art market in the pipeline and also something on Chinese banks as well as continued explorations in decentralised finance.
If you’ve gained any valuable insights from what you’ve read in Net Interest so far, I hope you’ll join me on the next leg of the journey and sign up as a paid subscriber. We won’t be breaking the equity research model, but if it’s financial industry knowledge you’re after, in an accessible format, then Net Interest is the place for you.
In the meantime, whether you’re celebrating Labor Day, Jewish New Year or a birthday (I am!) have a great week ahead,
Marc
Categorías: Blogs y foros de trabajar madera en ingles
Every Last Molecule – Oil Market Update
He’s arguably the most powerful man in oil, and made a colossal declaration…
Recently, Saudi Arabian Energy Minister, Prince Abdulaziz bin Salman, vowed to drill “every last molecule” and be the last man standing in the oil world.
It’s a bold statement in a world that has become fascinated with hydrocarbon reduction.
Calling consensus building amongst his OPEC counterparts and Russia a “state secret and art” Abdulaziz has orchestrated an impressive return of oil prices since the 2020 pandemic with prices gaining nearly 40% year to date.
This sent the shares of oil producers rocketing higher, many of which are up 50% or more this year.
- KRO subscribers took double digit profits on one oil stock earlier this year. Click here to learn how to become a member.
Global oil production growth has remained muted, while global oil consumption has continued to improve.
This has led to a tighter oil market which has strengthened prices while stabilizing national and corporate balance sheets.
Designed by Abdulaziz, last year OPEC and Russia implemented a massive 9.7 million barrel per day production cut in an effort to thwart massive declines in oil demand and to support crumbling oil prices.
Below is a chart which shows the historical production of OPEC and Russia.
The production cut worked and upon the initiation of global vaccine rollouts, oil demand increased while oil inventories around the world began to decline.
- Today the world is undersupplied by approximately 1 million barrels per day.
It’s a far cry from pandemic demand levels in March-April 2020 when the market was oversupplied by 20 million barrels per day. The chart below shows this dramatic shift in imbalances.
Let’s Look at Oil Inventory…Inventory levels fall when demand is greater than supply.
Barrels normally held in inventory are released to the market to soak up the excess demand.
- Global crude oil inventory levels have declined by over 200 million barrels, and it is forecast that over the next 3-4 months an additional 100 million barrels could leave storage tanks.
Below is a chart which shows this mega build up in global crude oil inventories followed by the subsequent decline after the production cut.
You’ll notice in 2022+ inventory levels are forecast to rise and likely peaking between 2.9 and 3 billion barrels.
Inventory levels in this range indicate a normalized market when compared against demand considerations.
This can be shown through the Days of Demand indicator which is the ratio of crude oil inventory levels to crude oil demand.
Peak Demand + Peak Supply = Peak NonsenseYou will find a lot of extreme sentiment in the oil market these days. It seems that every day there is both “peak demand” and “peak supply” hysteria.
So, who’s right? Probably neither side.
Simply put, if we removed all fossil fuel consumption today, the global economy would crash to a halt. Will we eventually wean ourselves off hydrocarbons?
Absolutely, but it requires slow methodical change, not flipping a light switch. Electric vehicle adoption continues to improve and that is a key driver for future oil consumption.
Though for the next 5-10 years, EVs won’t displace more than a few million barrels per day of demand globally (1-2%).
Don’t Forget: The US Shale FactorThe concept of peak supply is heard just as often. Many questions whether the US shale revolution can continue, or can the Saudi’s really produce enough oil to supply the market? For years I’ve said to never underestimate US shale.
- It takes roughly 6 months to bring a US shale well from initial spud to commercial production.
This creates an incredibly flexible production environment and allows producers to make decisions over much shorter time frames than offshore oil producers or state-owned national oil companies.
Shale is a mature industry now, which means the focus has changed from a “grow at all costs” approach to one of disciplined capital spending and free cash flow generation.
As a mature industry, the years of 20%+ production growth are gone, likely to be replaced with 1-7% annual production growth.
Other segments of US crude oil production will likely tread water.
Alaskan production has not grown in 5 years, while the Gulf of Mexico (GoM) is only up a smidge.
Current oil prices do make economic sense for increased shallow water production in the GoM… but most of this production is controlled by the mega oil corps (Exxon, Chevron, BP, Shell).
As you may know, those companies are under so much environmental scrutiny and forced changes that it is unrealistic to expect large growth in offshore oil.
Thus, it’s unlikely to see the GoM oil production rise significantly.
- Most if not all US oil production growth will come from shale, rather than conventional sources.
OPEC and Russia have considerable excess production capacity which can and will begin to flow back into the markets.
Starting in August 2021, the group will collectively increase production by 400,000 barrels per day. Each month for the rest of the year, the group will add an additional 400,000 barrels per day to the market.
The goal of this slow, disciplined approach is to try to keep oil prices sustained near the $70 per barrel range.
How Much Oil Can OPEC and Russia Bring to the Market?The current OPEC excess capacity is over 8 million barrels.
The largest contributors to future oil supply are Saudi Arabia, Iraq, UAE, and Kuwait. Iran has the capability to also add 2+ million barrels per day of supply but this hinges on their Nuclear deal with the US. Furthermore, Russia has at minimum 1 million barrels of additional capacity available.
Even if you exclude any of the smaller OPEC nations citing poor infrastructure, just the core group of Saudi Arabia, Russia, U.A.E, Iraq and Kuwait provides nearly 6.5 million barrels of spare capacity.
This is enough to satisfy the incremental global demand growth for several years.
Huff & PuffYou will hear a lot about ‘Huff & Puff’ technology in the coming years in the oil patch. Contrary to what many may try to sell you on, it’s not new technology.
In the U.S. you will start to see more oil produced through Enhance Oil Recovery techniques. Specifically, this “Huff & Puff” technology which uses CO2 injection to pressurize the formation and bring oil to the surface.
- This CO2 injection is eligible for a tax credit under the 45Q tax code.
I’ve done a lot of number crunching this and I don’t see (barring some new breakthrough that is many years away) the carbon credit cost being less than USD$40/t in the most optimistic model in oil patch.
That gives us some framework at what price oil companies will be forced to pay for offsets.
And if you’re not factoring that into your investment portfolio yet… you’re going to fall behind.
Subscribers to the KRO – my premium research service know the oil companies I’m targeting and how I’m playing the Net Zero world in a big way.
- I’ve actually found a company that where the CO2 used to produce its oil is equivalent to taking 8 million cars off the road for a year.
Members have the ticker and all the info – click here to get on the list.
Regards,
Marin
The post Every Last Molecule – Oil Market Update appeared first on Katusa Research.
Categorías: Blogs y foros de trabajar madera en ingles
Band saw rehab
Just got this ancient Grizzly 16" band saw for fairly cheap with the idea I need to replace just about everything to get it up to speed again. Right now I'm trying to get the wobble out of the machine (seen when running) and the first thing I'm gonna replace are the 2 drive belts. I've heard about a new (to me) type of replacement belt that is supposed to turn more smoothly and is adjustable with links in it. Not sure what they're called but would they be an appropriate replacement part for this saw?
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Categorías: Blogs y foros de trabajar madera en ingles
WST05 Makita Miter Saw Stand Won't Collapse
This is a nice stand but I can't get it to collapse. Hoping someone might have an insight on why it won't. I pull the handle, slightly lift, but it just stays put. https://www.makitatools.com/products/details/WST05
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I'm suspecting it has something to do with the red piece under the stand.
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Maybe it's becuse of these two threaded bolts I ended up with after assembly?
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I'm suspecting it has something to do with the red piece under the stand.
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Maybe it's becuse of these two threaded bolts I ended up with after assembly?
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Categorías: Blogs y foros de trabajar madera en ingles
Is this Tormek worth it?
I have the opportunity to buy this for $300. It includes what is shown in the pictures. Most of my sharpening would be wood lathe related. Can someone tell me what the jigs in the last picture are for?
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Categorías: Blogs y foros de trabajar madera en ingles
Eoast me Father,foe I have sinned.
In my hubris, I thought I had thought of everything and was really feeling myself. So I left this project in the vacuum bag over night for the last pressing in a multistep veneering process. My last thought out the door was, maybe I should hang out and keep an eye on this thing. It was the final step in a month long project, after all. Nah, it'll be alright. Well, something malfunctioned and the vacuum climbed a bit too high.
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Categorías: Blogs y foros de trabajar madera en ingles
Gold: Are You Scared?
It was a stunning Sunday selloff that got my attention…
Within minutes, I sent an email to my team at Katusa Research to standby on alert.
Gold bullion cratered in overnight trading on Sunday, falling over $60 per ounce in a matter of minutes, breaching $1,700 per ounce.
Some are blaming it on thin overnight trading due to the Asian holiday, while others are justifying it with recent economic data.
Regardless it’s an uncomfortable feeling for gold bugs…
Watching gold and gold stocks fall while the rest of the market roars higher.
Many of you have seen this song and dance before. Trudged through trenches and held on through bleak times.
A large number of investors are new to the sector…
And it’s the first time you’ve got that white towel firmly in your grips.
This investor was drawn in by last summer’s rapid gold price ascent and the incredible gains gold stocks returned in that rally.
That was then. This is now…While it can change in the blink of an eye, out of all the major asset classes (many bitcoin enthusiasts will remind you), gold is the worst year to date performer.
Weak: What is Causing the Gold Price Decline?One major seller in thin holiday trading aside…
The real driver of gold prices right now is the state of the US economy and the outlook for growth and inflation.
Strong U.S. employment data released Friday played a pivotal role in the recent price action for gold.
- The labour statistics point to improving conditions, which indicate a stronger and healthier economy.
In theory, a stronger economy should require less financial heroine, meaning less stimulus and money printing from the government and central bank.
For the record, I don’t think the Fed intends on changing its key accommodative policy stance anytime soon.
However, as an economy strengthens it incentivizes investors to buy growth over protection.
Eventually a stronger economy could provide a catalyst for real interest rates to move closer to 0%, rather than -1.15% today.
If you’re in the camp that one should earn a positive rate of return after inflation on bond investments or at least break even, then you’d be hard pressed to think gold is undervalued at these prices.
It’s not what you might want to hear…But the numbers speak for themselves.
The chart below shows every weekly gold price relative to US bond yields adjusted for inflation (Real Yields) since 2006.
By this metric, even if you wanted to break even on your debt investments and earn a 0% rate of return after inflation, gold is overvalued by over $200 per ounce.
How Well Does This Gold Price vs Real Yields Model Work?Very well…
For the mathletes, an R2 of 0.86 indicates strong explanatory power between gold and real yields. Below is a chart which shows actual weekly gold prices since 2008 and the predicted price from the model.
I took a lot of hate from the Twitter crowd a few weeks ago when I said we may not like the current price action in gold, but we must respect it. As it looked like it would go lower from our analysis.
That was exactly what happened.
The gold market is a multi-trillion dollar a year industry. One seller for a few billion dollars on a Sunday is not going to make or break the sector in the long term.
But, the fact that 1 seller can influence the price that significantly is a sign of short-term weakness.
- Again, respect the price action and use the information the price action provides to make investment decisions.
While the recent price action doesn’t look promising, these drops don’t even make the top 20 worst monthly declines for gold.
Below is a table which shows the largest monthly declines for gold, and the subsequent returns 3 months and 12 months later.
Back in June, gold retreated 7.7% for the month when it fell from $1906 to $1770 per ounce.
It was the worst performing month since November 2016.
Given the current price action, buying the dip in June likely won’t prove to be a winning strategy over the short run. Meanwhile, if August continues its trajectory, it’s shaping up to be just as bad as June or worse.
That’s definitely not a stat gold bugs will want to brag about. But the scabs, cuts and open wounds are starting to pour some blood into the streets.
Buy the Dip in Silver?Silver prices have struggled as well, -11% on the year and so far -9% for the month.
Again, similar to gold, silver’s worst months trounce the current price action.
In the next table, you’ll see the top 20 month over month declines, and the “buy the dip” model results for 3 and 12 month returns.
In the short run…
Like Birds of a Feather: August and Gold
From Nixon closing the gold window on August 15, 1971 to the Fed injecting billions to plug the sub prime crisis on August 9, 2007; decisions by the U.S. fed in the month of August has had profound effects on gold.
- A town with a population of 10,500 holds the keys to golds future success or failure…
In late August the annual Federal Reserve Jackson Hole symposium will take place.
It is often the place of major policy discussions and unquestionably the hot topic will be how to keep the economy running without sending it into an inflationary crisis.
With the coronavirus recession behind us, it is hard to see nominal policy rates getting more accommodative rather than less.
Gold Stocks
A simple indicator I like to use is to see how many precious metal stocks above $100M market cap with over $5M in cash are at 52 week lows Vs how many are at 52-week highs and the ones in neither category.
You can see that there the percentage of companies within 10% of their 52-week lows is rocketing higher.
And that’s where alligators start to come out of hibernation…
- I’m happy if gold goes down because it means I get to increase my positions in my favorite gold stocks at half NAV. That’s smart investing.
To give yourself the most upside with least risk, you have to be a contrarian. Sell when others are manic buying.
And buy when others are heading for the exits and throwing in the towel.
I took cash off the table late in the summer and fall last year. I took a lot of flack for it because “gold was going to the moon”.
The hate doesn’t bother me and neither does the confirmation bias. Cash is king and my subscribers and I are cashed up now and can buy when others who are overleveraged are forced to sell.
Subscribers and I recently began nibbling on my favorite gold stocks again…
Slowly and methodically, we’re building positions over weeks and months. And that is the key in this marathon to building wealth.
It’s all detailed in my premium research service – Katusa’s Resource Opportunities.
In fact, there are 3 gold positions at my buy target price right now. How long they’ll stay at these price levels is anyone’s guess.
But I’m buying using my tranche strategy – and you can learn it too.
Going all in and buying your entire position on the first dip is a recipe for disaster and financial ruin.
It may not be as exciting as going all in, but it sure allows you to sleep better at night.
Regards,
Marin Katusa
The post Gold: Are You Scared? appeared first on Katusa Research.
Categorías: Blogs y foros de trabajar madera en ingles
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