I was hoping to pass my next comment around $2.4 but this great comment by @retrac on commodity bull market, debasement of currency, silver’s role, etc. has motivated me to share a few thoughts. I’ve probably read all comments on ADT on hotcopper and thanks to all for the great comments and especially @PamplonaTrader
I’ll first update some points of my Dec 2019 comment linked below. https://hotcopper.com.au/threads/an...ant-interest.5117332/page-38?post_id=41853352
Warning – pretty long comment coming up.
1/ Holding tight
In my earlier comments, I’ve mentioned the old quote attributed to the legendary trader, Jesse Livermore on the fact that his best returns were not due to his thinking but simply sitting. This worked well from me from 20c to $1.6 (my Dec comment), and then to the point of the all time high around $1.9. I’ve got to be honest though that it would be nice to have sold at $1.9 and then bought back twice the number of shares around @78c
2/ Mining life cycle chart (mixed - refer next point 3 too)
I’ve mentioned the mining cycle chart in many of my earlier comments
As we see, the mining life cycle chart has already affected ADT partially over the last year, with us being mostly flat. As I mentioned in December, the one thing that has kept me holding ADT is the massive exploration potential still and also the wealth of data accumulated during Yugoslav era which ADT is in its possession.
3/ Tethyan (positive)
I think this is good on so many angles. I think Daniel Earle had mentioned that with this, Cronin has reset the Lassonde curve which is very true. I think Tethyan is a great counter point to above point of mining life cycle mentioned, as it places ADT in the discovery speculation phase again.
Besides increase in size of our resources, several more benefits of famous North American investors on board, more institutional investors, exposure to Serbia where other companies already have a presence etc.
This is still positive as was the case in December, and ADT has been good in cash management. We got a little lucky last year end though as delay in capital raising could have meant a raise at a poor price with the stock market crash
5/ Macro (mixed but more negative in medium term)
I mentioned in both my July and December 2019 comments that macro was one of my big worries. IMO, a big fall like the one we had in March was always on the cards, covid or no covid.
I’m still bullish longer term but there is a strong risk of another tumble sometime this year. My primary expectation at this stageis that it won’t cause an epic scare as last time as many instos are cashed up waiting for a crash. Nevertheless, nothing goes up permanently and either we’ve already topped and are soon going to have a meaningful retracement or probably won’t exceed Jan highs if markets go up further, and even then have a meaningful retracement. So more headwinds than tailwinds on overall macro scene IMO till end of 2020 / till meaningful retracement is done with.
6/ Takeover prospects (positive)
Some more excellent analysis from Pamplona on why SFR needs ADT badly. As I mentioned in Dec, time is running out for SFR if they want to takeover ADT as ADT might get too big for them.
7/ Elliot wave and 61.8% Fibo retracement (much more positive than negative)
I’m not an Elliot wave expert but understand some basic principles.
Assuming that from inception to all time high was Wave (1), we never had a really huge correction. The covid correction is very healthy from long term and provided an approximate 61.8% retracement of the entire rally from inception – ie. a fast and furious wave (2). This then provides a great opportunity for us to be in the main mega wave 3, if at all that is the case.
It needs to be noted though than corrective waves like wave 2 could have an a (fall) -b (rise) -c (fall) pattern where the “b” wave provides a temporary bounce only to take us to a newer low – in this case 60c. This is not at all my expectation but just providing the alternative as only mentioning potential of Wave 3 might sound like ramping.
If we are in wave 3, then price could rise much higher in this phase. Wave 3 is the point of recognition by the broader market. It is a great chance for deep pocketed ADT bulls to take ADT soaring. I need to mention also that this Elliot wave works much better on overall sectors or overall macro than individual stocks and especially smaller ones like ADT.
8/ Milos (more negative than positive)
I’ve got to be honest that I was a quite disappointed that Milos left. Apart from being the main facilitator of all our government dealings in Bosnia, he is also a major shareholder. I’m hoping that Milos does not eventually sell his shares too low
However, I trust that his replacement would be handle all the government stuff as he is also experienced in that part of the world.
9/ Start of new Commodity bull market (potential longer term positive)
I’ll try to elaborate a bit on some of the points raised in the excellent comment by @retrac
One point of his was whether we are the start of a new commodity bull market.
Here’s one article last year where actually illustrates the ratio of S&P500 to commodities.
These things are cyclical. 2016 gave us a good glimpse of a sharp rise in commodities. So in effect, we are now invested at the bottom of the commodity cycle with plenty of scope to rise further
Take a look at the 5 year zinc chart. We are again towards the bottom of the cycle. As I mentioned in earlier comment, these things are often cyclical and 2016 gave us a good example (I’ll elaborate more with precious metals in next comment) of how fast commodities can turn to the other end.
11/ Precious metals (potential longer term very positive)
While many here might already be familiar with some of gold’s dynamics, above might explain a few points on the matter for those not. From memory, gold actually went on to bottom around July-Aug 2015 at around USD 1050 while gold stocks bottomed by the end of the end of the year.
I suggested there that gold has the fundamentals to form the final bubble. Gold has seen a steady rise ever since. So is the gold bull market ending. Well actually, IMHO it could just be in the process of starting. Important to note that there could be several deep corrections along the way.
12/ Silver (potential longer term MEGA positive)
Several hard core gold fans refer to silver as gold on steroids. While my analysis was on gold, needless to say that if gold goes ballistic, silver inevitably follows. Research what silver did in the late 1970s and the start of this decade and you’ll see what I mean
13/ Silver vs Bitcoin – Potential eventual mega bubble - Holy rampa mania Batman!
This part of my comment is going to sound like pure ramping. I assure you that is not the purpose and I’ll try to give several disclaimers. Nevertheless, I have to be honest that precious metals and especially silver has the POTENTIAL to form a mega bubble and rise much more than anyone can comprehend.
You have to read my 2015 gold analysis in its entirety to see what I’m talking about. I mentioned there how gold has the potential to form the final bubble. A closer look at my analysis and I’m mainly talking about how gold will rise mainly as a “currency”. 2 years later, it was actually a currency (bitcoin) which went on to form one of the biggest bubbles of all times. As I mentioned earlier, silver generally does what gold does.
I’m not saying silver will rise to 20,000. I’m saying that silver is one of the great candidates if you had to choose a sector which could form a bubble / rise 500-100%
Take a look at this chart of All of the World’s Money and Markets in One Visualization
Compare silver to other money and markets and see how little money has actually gone into silver and how much can go into it. Much of this depends on what gold will actually do.
As @retrac mentioned, NPV could skyrocket if ADT actually makes it to production
14/ Adriatic Silver
There are several interesting comments by many holders as to whether ADT should rebrand itself as a silver play and maybe even change its name. You’d think that having just said that silver could form a mega bubble, I’d be rushing to push for a rebranding. I’ll leave that to the Paul, the company management and other shareholders to decide. Just some pros and cons of rebranding -
a/ Pros
i/ Silver is currently hot.
ii/ As explained, silver has great longer term potential.
iii/ Should already trade much higher as compared to many international silver stocks
b/ Cons
i/ Silver and precious metals can tumble very hard.
ii/ A correction could be due sometime this year itself
iii/ ADT could lose its acyclical and polymetallic edge if silver falls hard
It is a gamble and I hope the right decisions are taken. I respect everyone’s opinion on this matter.
15/ Conclusions
Nothing in this comment should be taken to suggest a “buy”. Indeed, I might myself sell my shares tomorrow, and this is main reason I’ve not commented much till date. I’ve just mentioned some points above explaining why I’ve been holding till now and never found the courage to sell any ADT all the way from 20c, as I’ve been trying to see a bigger picture. Several great commenters here have helped me in my decision, for sure.
I don’t know where this is going. There are plenty of companies with great fundamentals which have some bad luck along the way. The most common resaon I’ve seen is poor cash management. Cash management has been great so far but we were lucky to have our raise prior to the covid crash. From above, though on pure fundamentals, ADT has heaps of good stuff going for it. If it really makes it big and strikes some luck with Kizevak, Sastavci, existing Bosnian exploration, etc. combined with rising precious metals, then this could surpass all our expectations.
Taking it 1 day at a time for now – as I’ve done for 26 months. Cheers
of those still holding from the start.
(20min delay)