I've been absent. I mean really I thought Precis was just...

I've been absent. I mean really I thought Precis was just dominating the play here and addressing everything.

AMI on this website has SO MUCH DISCUSSION it's CRAZY! I've only had a little wander around the website checkin out a few other stocks and like for companies with similar market cap there is NO TALK WHATSOEVER. Bizarre. Perhaps the answer here is that AMI as a junior mining stock represents a SPECULATIVE investment. Well that's what Hartley's downgraded the stock to after Jim was gone. But no the stock was rated less risk than speculative before. I'm no HC veteran so I don't know. Should actually ping an email to the Help Desk.

Well, well, well. I am quite simply blown away at the high level commentary going on here. Have you all been to night school? Some very very very good insights which really just once again unfortunately grossly highlight that gold mining is as Warren Buffett would like to say "OUTSIDE MY CIRCLE OF COMPETENCE". Well I knew that before investing in AMI. That's why I lent on the professional fundies to help me out. Anyway, they were in the stock too so I don't hold it against them AT ALL. One of the reasons why I invested in AMI besides my initial inference that it was a great potential investment was that it would help me EXPAND MY CIRCLE OF COMPETENCE. I actually learned that trick from the folks at WAM BAM thank-you M'AAM. In the book A Bull, A Bear & A Croupier Matthew Kidman (ex-CEO) their said what they did was establish a toe poke position on a stock to create some emotional attachment to the stock and you could slide in or out as your interest grew or waned.

Someone made the point that I shouldn't have gone all in. Yeah tough one. I mean easy to say in hindsight because now the price is lower. But it went up 30% first. And I was CONFIDENT that this represented a good, no an EXCELLENT investment opportunity,. My confidence was flawed for two reasons - I OVERESTIMATED the potential for exploration success (at least thus far) and I UNDERESTIMATED the risks involved with investing in junior mining stocks.

I will also throw out there that investing in mining stocks I think IDEALLY requires one to have the ability to do a discounted cash flow analysis. I would say that this is particularly the case for DEVELOPERS. And there are so many variables involved in the calculation so IDEALLY one should perform an analysis on IDEALLY a LARGE number of SCENARIOS. Now the work involved in doing this is VERY VERY CONSIDERABLE. Furthermore, one cannot simply rely on all the information that is publicly available to satisfactorily do this I don't think. I think the sell-side analysts are having to rely on substantial input from mgt to work out their assumptions and costings and timelines,etc. I used to work at Tricom back in the day for a bit and the analysts there would get Babcock and Brown to bloody review their models!!! Those models were so bloody complicated it's not funny. And it was all a bit of a lark. But you know that's what the job was. I mean really I can see now that this investment is really speculative. So many factors with different permutations and combinations. Range of outcomes is MONSTROUS. So I have to acknowledge that I'm really flying blind here to an extent.

Interesting article in the Financial Review just the other day about the spate of M&A activity in the gold mining space. To invest profitably here one really needs to have SUPERIOR INSIGHT. Now having said that there are situations that arise from time to time when things just get THUMPED so bad that blind Freddy can work out that an investment represents AN ABSOLUTE STEAL. Now that's when you go ALL IN! In the vast majority of instances the risk/reward proposition in mining is probably not COMPELLING. Truly compelling situations are obvious. And it's like your first intuition should be right if you have applied some study to investing. Like I'll give you a scenario that is compelling. And this is interesting because the new CEO is from this very company... Stanmore Coal bought the Isaac Plains coal mine for $1 back in 2015. Now what are they key factors here that one can remember to determine if we are dealing with a potentially COMPELLING situation. I'd list the following - 1) the bottom of the cycle in a commodity denoted by record low prices or the lowest prices in quite a number of years, 2) preferably some big diversified stupid foreign insto that has got smashed in one of its operations elsewhere and the senior mgt are drastically trying to create the impression that they are going back to basics and their core line of business and 3) the acquisition price being ABSOLUTELY RIDICULOUSLY low and 4) the buyer of the assets is some very switched on mining exec who's probably worked for one of the big boys for decades and knows an absolute bargain when he sees one so teams up with a couple of other switched on fellas and forks out the $1 or whatever it is.

I've digressed here considerably. You dudes have raised a lot of very interesting points since I've been gone. They raise queries for myself that I cannot answer. I'll try and get my head around them. But this once again makes me realise how much time I've had to spend learning about investing in this space when I could on occasion spend literally I mean 1/50th of the time I've spent on reading up on AMI and gold and junior mining stocks and actually MAKE A GOOD RETURN rather than losing half my dosh. Which makes me think that you know the mining industry associations should get industry experts to write either good books or publications that comprehensively and systematically deal with this industry. This industry sees so much talent ebb and flow, ebb and flow, ebb and flow with each cycle and so much lost knowledge.

One other point I'd like to raise before I say pens down is this. I've just realised that Mitsubishi UFJ Financial bought bloody Colonial First State Global Asset Management back in late October 2018. I was bloody wondering why CBA went insubstantial and of course Mitsubishi is there now. I doubt there's been much turnover in staff so at this stage I'm not worried. Makes sense too now because I've been seeing Mitsubishi UFJ popping up substantial on a few mining stocks. Now I know CFS used to run a Global Resources Fund 20 years back or so which was quite unique I think so I was interested to see what was going on. I think the fund was shut down.

Now because I'm a novice I'm going to point out a few of the seasoned players in this space that run resources focused funds. They are Tribeca Global Natural Resources Fund, Lion Selection Group, Nero Resources, Terra Capital and Tribeca. Now I feel bad. I rung up one of these guys and the sales dude called me back really nice. To be honest I should have just got my old man to plug maybe 10% of his capital into one of these funds because I KNEW I DIDN'T HAVE THE EXPERTISE. But I was prepared to learn more. Anyway, these guys are specialists in resources. They REALLY SHOULD KNOW WHAT IS GOING ON. I can't remember their performance figures at all. I think a few were like fantastic. Perhaps one or two less than I had expected. My expectation or perhaps naive hope with the resources space is that there should be a LOT of INEFFICIENCY in the market at most times and in peak times just MASSIVE INEFFICIENCY. So really the potential should be that if you set up these funds in the right way and they're super long term focused with really BROAD RANGING and LOOSE mandates then there's the opportunity to perhaps whip up some cracking numbers. I think the problem here is that they remain fully invested most of the time. That's the bloody issue. And unfortunately the product would be difficult as hell to market because the performance would be ALL OVER THE SHOP. Yet on a total return basis measured over the long term I'd hope you could really smash it. Yet I think I'm perhaps overestimating this because I underestimate what it is to be 1) that patient and 2) that open to big bets and 3) the skill to CONSISTENTLY get those BIG BETS RIGHT.

I need to go to sleep. Selling AMI now is probably not an ideal time. Totally understand. Chester Asset Mgt did a fairly comprehensive write up on Oceana Gold Corp on Livewire. They've been exceptionally generous outlining most of their analysis. I can see that yes the market has perhaps over-reacted to the downside but I understand that there is considerable risk in this investment too. Meanwhile the stock price continues to fall....perhaps representing a more and more compelling risk/reward opportunity. In hindsight the obvious ones that I totally missed was getting in on Alacer Gold at the start of the year when it was just ridiculously cheap and the day DCN got punished when they announced that they had drastically got their recovery rates wrong and the market thought they were perhaps going to go bust. And the give me was that one of the directors with 30 years mining experience just jumped in and bought I think it was $50k or $500k? Thank-you very much!

Time to post that sucker.... ping!