nice move today, page-4

When TGA jumped 8 cents on Monday, I also wondered if somebody had put out a positive opinion recently, but exhaustive Googling raised nothing. Maybe more investors share my long-held enthusiasm for TGA! If one is fearful of investing in mining, mining services, banks, insurance, retail, manufacturing, real estate and whatever, and one does not understand gold, then where better can one invest than TGA? It is an odd animal, a chimera, that is a mixture of retailer, financier and debt collector with stellar investment metrics and anti-cyclical characteristics.

The SP closed at $2.27 in both February and April of 2011. Ignoring that SP as "heady", then the June 2011 capital-raising SP of $1.85 might be considered as a reasonable base line, and if we adjust by the diluted EPS metrics of 2011 and 2012 we get $1.85*19/16.7 = $2.105. A year ago, the SP at COB 12/09/2011 was $1.70, and $1.70*19/16.7 = $1.934 – about where it sits today.

When the SP collapsed to $1.35 some months ago (because of heavy selling by PPT), it was simple for me to say that below $2.00 was a no-brainer for investors (not traders), and I did not have to fine-tune my thinking. An exit price is one thing, a buying price is another. The latter can have a margin of safety (MOS), but one has to be careful not to unwittingly double accommodate safety via a high RRR, and then again via a MOS factor like 33.3%. I emphasise the "unwitting" bit - what investors wittingly do is a matter of their personal investing style.