secret sauce...

after a few days of upside on CQT I am giddy with excitement!!!
It has indeed put me in a benevolent mood so I am now
going to reveal the "secret sauce" behind my investing
genius in CQT...

avid HC readers may recall that I was clever enough to
be buying CQT at $0.65 back in late 2007... let me
explain why...

back in late 2007 I was busy divesting myself of all my
rubbish stocks as I was sort of expecting a banking/debt
crisis (the signs were there). I was also expecting that
Gold (then around US$650/oz) would be a benefactor of a
banking/debt crisis and would rally strongly. As such I
was looking for a decent Gold stock to hedge against the
possible banking/debt crisis and to benefit from a strong
Gold price... this is how I came to research CQT, and
fundamentally it looked good with all the following
factors;

* $30m cash in the bank
* a big, low-cost, undervalued resource
* no (or at least very low) sovereign risk
* access to infrastructure & labour
* a big world class independent auditor (GoldFields)
as 10% owner & JV partner

so, the fundamentals looked good, so then I turned to my
"secret sauce" - amateur technical analysis. I
immediately spotted a big multi month trendline that was
serving as overhead resistance... CQT had three
touchpoints on it at that stage and I consider a break on
the forth touch to be a genuine reversal signal. Needless
to say, due to all the fundamental reasons above I figured
it was only a matter of time before it went through...

and indeed it was only a matter of time!!! But with
hindsight I should have waited for the actual break, which
dear readers, happened just a few days ago!!!

I liked and bought CQT at $0.65 in late 2007, and the
story has only improved since then. Interestingly despite
the global financial crisis the independent auditor
continued to like it and bought another 10% of CQT in
mid-2008. Further, despite pretending to not like it, we
now know that our independent auditor still likes it - so
much so, he doesn't want to leave! And if that isn't
enough, the price of Gold is about 50% higher today!

To quote Mr Shakespear-Fibonacci (he is a little known
lovechild of English and Italian heritage who is adept
with numbers & verse);

"How do I love thee, let me count the extension targets"

and for those of you with poor eyesight (Vic - we all
know that what you used to write about CQT was also going
to make you blind!), those extension targets are as
follows...

100.0% = $1.08
138.2% = $1.44
150.0% = $1.55
161.8% = $1.66
200.0% = $2.02
261.8% = $2.60