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Matt Geiger – Thoughts on recent investments in gold, battery metals, phosphate and silver stocks

Cory
November 22, 2021

Matt Geiger, Managing Partner at MJG Capital joins us for an extended conversation focused on investing in resource stocks.

 

We start with gold and the recent run to over $1,850/oz. Matt shares the types of gold stocks he likes and the ones he is avoiding. We also have a discussion on how he views smaller development plays.

 

Next up is recapping his comments from the last interview on the phosphate sector. This ties into base metals and the disconnect we are continuing to see with the stocks lagging the metals price.

 

We wrap up the call with Matt sharing some of the new positions the fund has initiated and his strategy moving into 2022.

 

 

 

Click here to visit the MJG Capital website to learn more about Matt’s fund.

Discussion
30 Comments
    Nov 22, 2021 22:56 AM

    Monday noon here in NY and gold is down $40. Gold bugs being disappointed again and looks like this was just a big oversold bounce from year of lower gold prices and with all easy money in system stock market will be heading to a bubble top next year so expect gold and miners to head back down and grinding lower while money jumps back into stocks.

    Reply
    Nov 22, 2021 22:05 AM

    kinda looks that way alright.

    Also World’s first ‘Bitcoin City’ about to arise
    22 Nov, 2021 12:45 / Updated 4 hours ago

    https://www.rt.com/business/540933-el-salvador-first-bitcoin-city/

    Ya think maybe this will spark a little interest in cryptos?

    On the other hand, govs are beginning to see cryptos as a threat.

    Reply
    BDC
    Nov 22, 2021 22:19 AM

    SPQ(Others): https://tinyurl.com/n3usfa27
    Uranium cooling. Lithium reciprocating.
    Copper wandering. Oil slip sliding.

    Reply
    Joe
    Nov 22, 2021 22:44 AM

    Hope y’all enjoyed this recent dead-cat bounce in gold and sold your positions, because it’s OVER.
    There is still NOTHING going for gold, not one single thing.
    Nobody is buying gold for investment, all the speculative money is going into crypto, stocks and real estate.
    The miners will continue to get squeezed by rising costs and lower metal prices, the last 5 weeks of the year will be brutal. The best you can hope for is another dead-cat bounce in January that you can sell.
    2022 will be another dead year for PMs.
    Happy Holidays.

    Reply
      BDC
      Nov 22, 2021 22:35 AM

      Joe: You see the Goldbug Put; but, no one knows the future. Not even you, Joe.

      Reply
    Nov 22, 2021 22:31 AM

    weekly GDX…A close over 33.05 on this weekly may offer the stuff of bounces(TAS TOP)……Daddy long legs doji on weekly….daily OUL is 34.02…That would make a good trade…I will NOT hold over the evening BECAUSE price is below my oul which is down pointing and below its zero line…sort of like a 9ema line….this is unexpected price action as such i will not position for an over night hold…that is just me…..price is above the intra-day VWAP…so institutions seem to be putting money into the bounce here and now..
    https://tos.mx/Vm4zOvQ

    i have not been stopped out of my nat gas trade in BOIL….not sure if that is a good thing…Sure looks like bottoming action

    Reply
    Nov 22, 2021 22:34 AM

    It’s pretty amusing that the Gold bears have been MIA and in hiding for all of October and November and we didn’t hear a peep out of them about it being a dead cat bounce when the yellow metal shot up from $1721 to $1870. However, now on one of the first bigger corrective day in the PMs for 2 months, they’re all suddenly back and warning us all about impending doom in the sector. It remains a great contrarian indicator. 😉

    Reply
      Nov 22, 2021 22:43 AM

      Exactly. They’re no different than bulls who only show up on the best days.

      Reply
      Nov 22, 2021 22:28 PM

      Ex, Only consistent vocal bear is Joe. Doc very cautious and with yesterday’s post of considering a short position, others myself included mostly watching this thing go nowhere. And a whole lot of gushing bulls for weeks and months.

      Reply
        Nov 22, 2021 22:50 PM

        Joe is an obvious gold bear, but Paul likes to show up on the red days to bash the sector and those that invest in it as well, and they were some of the first ones to post today, just waiting to pounce on any bad news, just like they did during other weak periods before more rallies earlier in the year.
        .
        Jonsyl, you had even mentioned a number of times that you didn’t think Gold was going to break above $1800, and that would keep a lid on things, and it just broke out above not just the $1836 resistance, but all the way up to $1870, which put that topic to rest.
        .
        I’d hardly call what we’ve seen on the blog over the last year (or even the last few weeks or months) “gushing bulls”; not even close. Yes, things have been encouraging since the bear-trap reversal at the end of September that then got up over dangerous and oversold levels right before the monthly and quarterly close. That did kick off a rally in the PMs and miners for all of October and November, and people listening to the perma-bears would have completely missed those recent rallies. Usually investors do get a bit more optimistic when they are seeing double-digit gains, and those that were not buying into the weakness in the late summer missed another opportunity for gains once again.
        .
        Despite that rally the last 6- weeks in the PM sector, people are right back to negative sentiment, despair, and only seeing more downside or a perpetually sideways market… all on the back of just 1 bad day. This negative sentiment and guarded mistrust of rallies is a good contrarian signal, and it is a good place for the sector to base while so many still don’t trust the moves higher. Overall there has been much more reservation and bearishness on here and other chat forums for some time now, which I find encouraging.

        Reply
          Nov 22, 2021 22:10 PM

          not to be in any competition, never said gold would never get over 1800, in fact felt and said repeatedly that gold should at least have some pop over that and the potential hook was more likely 1840 or so. Actually bought some long in time hail mary calls which i posted, and which are taking a bath in here and may repeat in the near future.
          Point being, other than pop ups, gold has done little to nothing in spite of all the reasons with fundamentals and happy talk about drilling results, etc etc.

          Reply
            Nov 22, 2021 22:38 PM

            You had stated a number of times that Gold couldn’t seem to get over $1800 and were far from bullish on the set up. The point being was that Gold did decisively close over $1800 for 2 weekly closes, and broke above the first level of resistance at $1836 (which was the most recent peak, and a level it had failed to breach on 3 prior attempts), and gold made a 5 month high up to $1879. Those are bullish developments, not bearish ones.

            There were only a few people on here expecting higher levels, with many still waiting for the other shoe to drop and for Gold to head down and test $1675 for a 4th time.
            .
            The other point being is that there have been a few different tradable rallies this year in the PM sector and the miners, and most people failed to buy and low, or to trim high into the rallies. This is perpetually the case with investors unable to buy into weakness, nor sell into strength, and it’s not just in Gold & Silver, but also in Copper, Palladium/Nickel, Lithium, and Uranium.
            .
            Trimming back profits into the first quarter in most of commodities was an easy trade, after they’d have nice runs, including many gold and silver stocks. Remember the #Silversqueeze was in February and there were plenty of nice gains to harvest on that surge higher, but I wonder how many investors were positioned correctly or sold at least some into that surge?
            .
            Next, there was the March double bottom in gold at $1673 and $1677 where it was another key support area that held and was a good place to have been buying… I sure was and mentioned so repeatedly at that time. There was a Spring rally from there at the March lows into early June with nice double digit gains. The high-water mark ever in my portfolio was on June 1st because of taking advantage of that rally for a few months and trimming back earlier into the Q1 strength in many sectors.
            .
            Then we had another good setup in late September to buy cheap, and just saw 6 1/2 week rally from there with more double-digit gains (many companies returns were more in a few weeks than having been in the general markets all year long). Personally I didn’t nail the bottom perfectly as I bought about 2 dozen stocks from late August into late September, and was a bit early by 2-3 weeks in a few names, but still bought pretty low, and watched those positions go green the last 2 months, so nobody had to be exact, but they should have been buying into the weakness. To say that PM haven’t done anything this year isn’t really accurate, but it has been a whipsaw, and it needed to be traded, like the commodities sector and especially the miners should be. These mining stocks are not blue chip FAANG stocks or Tesla, where one “buys right and sits tight” watching it climb to all times highs for the last 12 years.
            .
            The commodities sector, monetary metals, and related resource stocks have presented investors with a whipsaw back and forth market for much of this year (and really every year). This whipsaw action needs to be embraced, and anyone that did some buying low and some selling high did pretty good even during a more sideways year, and there have still been periods of time to make money this year… it just wasn’t as easy as it is in a raging bull leg higher. This year was more reminiscent of trading in 2015 or 2017/2018 where it was more corrective market trading, where things didn’t get quite as overbought, and where they stayed more oversold on the technical indicators, but it was able to be traded as such.
            .
            Granted, the larger backdrop has been a corrective move in the PMs since the summer of 2020, but there are always opportunities and trade setups for those with the eyes to see them, and conviction to act on them. At each of those lows, people were dogpiling on with comments about the terrible washouts we’d still see down the low $1600s or even mid $1500s, or that Silver was going to head to $18.50-$19 (neither of which ever happened). If people listened to those voices, then they’d have missed buying into the weakness in each of the rallies outlined up above.
            .
            Sure, we may still have some more downward pressure in the PM sector, and this may trigger one more round of tax loss selling, but it will be a buying opportunity. With all the fundamental drivers heading into 2022, this corrective move down may be one of the last times we see prices this low again for quite some time. If we get down into the $1700’s in Gold and $22-$23 in Silver, then I’ll be deploying the rest of my dry powder into that weakness. If we break down below $1673 in Gold, or $21.50 in Silver and plunge down even further, then that would be a back-up-the-truck moment, and I’d pull money out of deep savings to take advantage of that environment. I remain steadfast that we are going to see a much better year in the PMs in 2022, especially when the Fed is faced with hiking rates to fight inflation, and I believe that will kick off a massive rally in Gold and Silver and the mining stocks, and will be aggressively adding on any more weakness we see.

      Nov 23, 2021 23:06 AM

      The satanist elites/bankers/moneychangers do not want us/plebs to own any gold. It’s as simple as that. They can drive the price in any direction they want whenever they want. TA doesn’t matter, not at least. All markets including the PM markets are just an Illusion where price has long been distorted

      Reply
    Joe
    Nov 22, 2021 22:54 AM

    You goldbugs are gluttons for punishment.
    You’re worse than people who always vote Democrat, you just can’t get enough abuse.

    Reply
      Nov 22, 2021 22:58 AM

      Most would agree with you since most only lose at this game. I hope that’s comforting.

      Reply
    Nov 22, 2021 22:57 AM

    Today’s impressive declines have given the likes of Hecla and SILJ a chance to build H&S bottoms that look as good as those that already formed among the gold stocks/ETFs.
    https://stockcharts.com/h-sc/ui?s=HL&p=W&yr=3&mn=0&dy=0&id=p23797472845&a=1068475069

    Reply
    Nov 22, 2021 22:11 PM

    The low for GDX today happened precisely at its own important weekly pivot…
    https://stockcharts.com/h-sc/ui?s=GDX&p=W&yr=3&mn=0&dy=0&id=p80210423847&a=988301549

    Reply
    Nov 22, 2021 22:05 PM

    Earlier this month with a move up in gold I mentioned that we were finally in the beginnings of a bottoming or consolidation for the PMs and stocks—this is just one verification of that and we will continue to see an up and down pattern for some time. We moved down below the 20 month MA of the monthly BBs today but we’ll probably attempt to move over that again in the near future. My plan is to over the next 6 months to increase my positions in the sector; in fact I added a little today again on this beautiful pull back.

    Reply
      Nov 23, 2021 23:21 AM

      I nibbled at a few gold & silver stocks into today’s weakness, and also did a tiny bit of adding to my uranium stocks, today, taking them up to 75% positions. However in both the PMs and U stocks, I’d like to see 10%-15%+ more corrective moves down in the mining stocks to start adding more. We may see one final round of tax loss selling here, so if there are any exaggerated moves on low volume where a stock really tanks, then I’ll jump on those kinds of trade setups.

      Reply
    Nov 22, 2021 22:08 PM

    I might mention how encouraging it was that a lot of PM stocks were not taken to the woodshed in a meaningful manner today—-that is characteristic in a consolidation or bottoming pattern—the same thing will happen with big moves up where stocks will respond tentatively to the upside.

    Reply
      Nov 23, 2021 23:25 AM

      Agreed Doc. I was surprised that some miners didn’t sell off harder than what we saw on Monday, and it does seem like consolidation and accumulation by value buyers. If we see an outsized move to the downside in the mining stocks in the weeks to come, then I’ll be looking to do final holiday shopping in the resource sector, in preparation for a better 2022.

      Reply
    Nov 22, 2021 22:30 PM

    doc, the reversal in tech heavy nasdaq today likely to foster the conventional market pullback in here you mentioned couple days ago. Took a flyer and bought some puts on techs myself earlier today. All things bitcoin are also in an interesting point in here, but will leave that one alone.
    Playing golds with long dated calls into next year and will add some with this pullback. Not interested in putting a lot of capital into anything right now.

    Reply
      Nov 22, 2021 22:45 PM

      Jonsyl, looking forward to January with interest as it relates to the conventional market—-2022 might be the year of difficulty for those markets.

      Reply
    Nov 22, 2021 22:08 PM

    Yes indeed Ex, had reservations as gold did have problems getting over 1800 in early October, also stated if it did you could expect it to get to a former top at 1840 +/-, it did and bought in with calls. In fact managed intraday high last tuesday of 1879 . And here we are basically back where we started just above 1800 again as in early October.
    It will mostly likely bounce from here again, as producers didn’t have the drubbing you would expect. Unless that continues where we make a higher high there is little to crow about.
    No doom and gloom, as gold has fundamentals in its favour which will restrict a washout. Just a lot of apathy as it’s been like watching paint dry LOL

    Reply
      Nov 22, 2021 22:16 PM

      Agreed Jonsyl, gold has made a return trip back down near $1800 again, but having taken out that first resistance, as you mentioned was significant. Yes, there have been many days along the journey that were like watching paint dry, but no doom and gloom, just digesting the huge moves of last year where the all time high was reached. Gold has been gradually building out of the triple-tested $1673-$1677 support zone since March and basing for most of 2021 for the next leg higher in 2022.

      Reply
        Nov 22, 2021 22:17 PM

        well stated summary Ex.
        Let’s see how soon the next resistance take out takes.

        Reply
    Nov 22, 2021 22:01 PM

    Adriatic Metals(ADT.AX) mentioned by MJG is listed in Australia. That’s the Aussie silver miner I’ve been looking for.

    Reply
      Nov 22, 2021 22:37 PM

      Yeah, Adriatic has been a solid success story the last 2-3 years with fantastic polymetallic drill hits with very good grades of gold, silver, zinc, lead, and copper. Then last year they took over Tethyan Resource and added all their properties under their umbrella.
      .
      It’s been one of those stocks I’ve watched keep trucking higher and higher from the sideline for the last 3 years, always thinking it may eventually correct down hard and then I’ll grab it, but normally when it did start to correct, so was everything else in the mining sector, and just missed the ride in Adriatic. Congratulations to all those that are in or caught part of the ride higher in Adriatic, as it has been a solid performer.

      Reply

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