Jordan Roy-Byrne - Techncial Commentary – Wed 23 May, 2018

Metals vs Rising Rates and Bright Spots In The Junior Sector

Jordan Roy-Byrne from The Daily Gold shares some research he has done on the relationship between a rising interest rate environment and gold/metals reaction. We also discuss the junior gold sector and what to look for in companies as we continue in the slow market.

Click download link to listen on this device: Download Show

Click here to visit Jordan’s website for more metals commentary.


Featuring:
Jordan Roy-ByrneCory Fleck
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Comments:
  1. On May 23, 2018 at 4:59 pm,
    Mike in NM says:

    Thanks – this was excellent!

    Listen to this then go listen to today’s interview with Chris Temple. All and all this could be a game plan.

    Thanks!

  2. On May 23, 2018 at 6:30 pm,
    GuruJ says:

    Nobody flip-flops like Jordan. Feel bi-polar when listening his interviews.

  3. On May 23, 2018 at 8:44 pm,
    Chris in the Philippines says:

    The best content in this sector. thanks

  4. On May 23, 2018 at 8:48 pm,
    Chris in the Philippines says:

    Jordan is spot on. I see a lot of good analysis and long range thinking in his work.

  5. On May 23, 2018 at 10:48 pm,
    Excelsior says:

    Good discussion from Jordan and Cory today.

    Yes, stories that are hitting pay-dirt in their exploration programs will get noticed, but as we saw last year, even companies that were really hitting nice drill intercepts were ignored if they were just adding ounces to known deposits. I’m not sure there is a clear definition of “adding value” as Jordan mentioned, because those companies were adding value and nobody cared.

    Really, it was the unknown potential exploration narratives that really captured the imagination of investors and money flocked from one to the next to the next…. looking for that legendary beast “The Major Discovery.”

    The stocks that really surged like GT Gold, Novo Resources, Garibaldi resources, Arizona Silver, New Nadina, Aurion Resources, etc… all made significant new highs before they had concrete drilling results back, based on early geochem, rock chip grab samples, photos, metal detectors, and a narrative that investors could latch onto. Often when the stock did scream higher allowing the companies to raise money into the strength, it funded drill programs that came back underwhelming, and air came out of the tires…..and the stocks fell back down again.

    Not discouraged after another one bit the dust, the rabid exploration speculators just ran to the next shiny object and potential discovery of a lifetime … rinse and repeat.

    What is not discussed is how many bag holders in these stocks that were chewed up and left behind for dead…… Speculators got spanked chasing over-hyped stories that were way ahead of themselves in valuation levels, but that is what makes a market and it is the “madness of crowds.”

    ____________________________________________________________________

    Personally I’ve had a number of solid returns positioning in companies that became takeover targets and many of them were Producers or Developers (not just Exploration companies).

    Often I’d trim back a large position or even the whole position for a nice gain selling into that excitement. Many times I’d wait a while for the excitement and focus to leave during the approvals and voting periods pre-merger and then buy back into the stock again if the shareprices fell back down during the boring wait for the deal to close. Then after the takeover is finalized there are often immediate arbitrage re-ratings in the holding when the proper metrics are applied post-merger.

    So that is actually 2 other ways to make some cheddar….. 1) position in takeover targets and sell into the takeover news. 2) play the arbitrage mismatches during the wait for the takeover to complete. Sometimes there are some large disconnects in the valuations of the company being acquired that can be capitalized on.

    A third way to make money is riding out the spike in a company as they hit the final stretch going from development into production. Louis James has discussed his research a few times and he has dubbed that the “Golden Runway” but many of us have been playing that run in the development phase of a company as the excitement builds going into production.

    A fourth way to make money is to look for small to medium producers that are under-followed and that are steadily improving their throughput, recovery rates, growing annual production or delivering a solid consistent level but lowering their costs quarter over quarter. I don’t agree that investors should steer clear of producers until gold prices spike higher (although that will help all the miners of course), and there are always companies that are making strides to become more profitable, increase revenues, and some are starting to throw off free cash flows like legitimate businesses should be.

    Many resource investors lose track of the point that in business these miners are eventually supposed to stop burning through money and actually generate money. (what a novel concept).

    Lastly, there are royalty companies and streamers that are still “adding value” by generating revenues, cash flows, without sinking much money into projects as a result of having the NSR or stream in place from lending money to other miners in their time of need.

    To say the only place to make money in the miners is by chasing good exploration stories is very myopic and simply not a complete picture. The one area Jordan mentioned though that does make sense is to steer clear of optionality plays that are really far out of the money at current prices.

  6. On May 24, 2018 at 2:08 am,
    Excelsior says:

    Gold & Silver Price Update – May 23, 2018 + Silver Do or Die Time

    iGold Advisor – May 23, 2018 #VIDEO

    https://www.youtube.com/watch?v=fpRC5iySZaE

  7. On May 24, 2018 at 6:13 am,
    Chartster says:

    The GLD daily chart sure does look sick. The gap down below the 200 and the uptrend line are making a wedge. I doubt gold will go up here. And when it breaks the uptrend line, it’s going down big and hard..

    The 500 thousand gold bugs in N Amerca are about to be reduced to 50 thousand. I guess that’s good news, because there will be 50 million gold bugs in a few years.

    Bottoms up!

  8. On May 24, 2018 at 8:30 am,
    spanky says:

    I was looking at NVDA’s chart from 2010 to present. It had an initial pop in 2011 and then based out for almost 2 years in a very very similar fashion to the miners currently. Of course, NVDA went from a low in 2012 of about $11 and recently hit $260 this year.

    It didn’t take out its initial 2011 pop high for good really until late 2015/early 2016.

    It built an incredible base over 5 years, and ramped up very very slowly and steadily once the low of the consolidation was struck. I think we have to have similar expectations potentially in the miners this time.


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