This isn't getting much love at the moment. So I thought I might give it some... This little free carry has a negative cost base in the portfolio thanks to the dividends. I probably need to buy some more just to give something back to the company.
Long term:
1. H&S pattern now resolved and the SP is at the bottom of it. Good time to top up on a bounce from here or closer to the green trend line below.
2. In the absence of any other input which I doubt (McPhillamys, Rosemount UG, Ben Hur positives etc are in the pipeline), then the terminating wedge below will constrain the SP with a breakout/breakdown due before June 2022.
In a closer view:
3. The earnings miss on 25/08/2020 started an absolute bloodbath. Which is unfortunate as we were is a cusp of the right hand shoulder of a H&S pattern forming.
4. Not only that, the right hand shoulder was actually the support line (lower red line) of a smaller terminating wedge and started acting as resistance once broken. She tried for a month (mid Sept to mid Oct 2020) to break above this support turned resistance. To no avail...
5. A Death cross soon happened on the EMAs and it was down hill from there. One of the worse Death Crosses I've seen on a goldie thus far.
So where to from here:
a. Buying after a H&S pattern have formed is always nice.
b. The SP is trying hard for a Golden Cross against the 20 Day EMA and is bottoming out. We will need something positive on the FA to get the SP to level. Some good earning later this month (23/02/2021) should be a good start. Bad earnings and we will challenge the next support line (green) below.
c. McPhillamys, this is taking way too long and the FS is on the conservative side. Whilst some here have voiced their frustration on this. It is better the err on the conservative side than get expectations too high. If you want to see what happens in such an event go check out DCN. If you want a conservative FS and over deliver... check out GOR Gruyere build.
Whilst I have not been following RRL very closely, apart from skimming through quarterlies and ANNs, a small free carry is sitting in the portfolio quietly giving out dividends. What will it take for me to go big on this again.. .well something fundamental needs to change with management and I outlined that in the Open letter at the beginning of this thread. I had a choice in going big on RRL (cornerstone holding) since SAR left the portfolio with the NST merger, I ended up choosing GOR instead. Because RRL is, for lack of a better word...
Average in every way except dividends and maybe at the end of 2022/23 when McPhillamys start to pull it's weight in production. See below:
Maybe it is time I accepted that RRL is a good goldie but not really a star player that I once hoped it would become. Not one that pulls the gold portfolio through the cycles but a good support player and allrounder nonetheless. In that sense RRL will have a place in the portfolio.
(20min delay)