The Intelligent Investor and XAU.TSX

GrandpaBrianGrandpaBrian Posts: 679 Silver ✭✭✭✭
When I was three years old, Benjamin Graham wrote his widely acclaimed guide to long term investing, "The Intelligent Investor". When I took up my first job after university, my stockboker employer gave me a copy of that book and urged me to take Ben's wisdom to heart. And fifty years on, I find myself revisiting it to help me make sense of the recent price action in Goldmoney stock.

It is always easier to hold a stock when it's on its way up. But when it gets beaten down by hedge fund shorts, it's not so much fun. Ben and his most successful disciple Warren Buffet would ask you "why did you buy it in the first place?'. If the fundamentals are intact, and you bought it for the longer term, ignore the price of the moment.

Back in the day, we used to look up yesterday's price in the morning newspaper. Now we check the price every ten minutes on our iphones. It's up 10 cents! It's down 30 cents! What's happening? No, it's up again. Then down - the sky is falling.

It's like a collective case of Attention Deficit.

I was happy to own XAU at these levels two years ago. The company has made a great deal of progress since then. As management and staff have gained operating experience, risks have been reduced. The balance sheet is much stronger. New opportunities, like Goldmoney China, are being pursued.

I like being an investor in this business so wake me up when the market cap hits a billion. Until then, Benjiman and I will be thinkering with other matters.

Comments

  • RocketDogRocketDog Posts: 621 Silver ✭✭✭✭
    Agreed @GrandpaBrian. I bought most of my XAUMF at levels lower than this. But just bought more yesterday because I am confident that in the long run these prices will seem like a bargain. Heck, they seem like a bargain when compared to 6 months ago.
  • GoldmattersGoldmatters Posts: 3,784 Admin
    @GrandpaBrian @RocketDog happy to have both of you here :)
  • GrandpaBrianGrandpaBrian Posts: 679 Silver ✭✭✭✭
    edited February 28
    Yes @RocketDog , like you I too am tempted to buy more everytime the price gets beaten up. But then I ask myself "is my portfolio in balance with the amount I already have?" Would I have to pass on something else, like that cobalt stock I like, to add to my Goldmoney position?

    No need to be greedy I suppose. Try to stay in balance I remind myself. Still, it's so darn tempting...
  • RocketDogRocketDog Posts: 621 Silver ✭✭✭✭
    That is good advice @GrandpaBrian. I do somewhat lack balance. I'll keep working on that.
  • PowerlunchmoneyPowerlunchmoney Posts: 274 Bronze ✭✭✭
    edited March 1
    Personally, I'm not one to ignore price movements, especially when a stock is oversold as it is. Though, I've never claimed to be an intelligent investor! I'll worry about rebalancing my portfolio later B) :# Doubled my position over the past week of trading. Onward and upward I say :)
  • BancersBancers Posts: 23 Tin ✭
    I save in Gold, but invest in Silver, Platinum, Palladium and Goldmoney’s shares.
  • OhtoretireOhtoretire Posts: 10 Tin ✭
    If im not mistaken the orical of omaha said he invests when price is on sale, turns on music, and dances around the house.
  • tamayoktamayok Posts: 21 Tin ✭
    I am perplexed at the relentless dropping of the share price and the null effect of the NCIB.
  • powslayerpowslayer Posts: 102 Bronze ✭✭✭
    Last NCIB they did no shares where purchased. I doubt this time they will either. It is a nice gesture but I don't think they can purchase while large undisclosed plans are going on behind the scenes. This needs Coldblocks and Goldmoney China to be up and running.
  • GoldIsCurrencyGoldIsCurrency Posts: 1,773 Gold ✭✭✭✭✭
    @powslayer is correct about blackout periods. I am not sure if Coldblocks or Goldmoney China need to be running or not as we have read News Releases on both but maybe there is some additional undisclosed information. There is a way to be able to buy back shares during blackout periods through an ASPP but I honestly don't think that is required nor am I recommending that. I think the market just needs to see some buyback activity.

    Everyone has different views on the value of an NCIB. I know some think it is a waste of money but I disagree and think they offer good value for shareholders and the company in various aspects. We were trading close to $5 in October when the Bought Deal was announced. Trading at that level is what made it possible for Goldmoney to be able to issue a block of roughly 7 million shares at $4.30 for $30 million. At the level XAU is trading at now Goldmoney has an opportunity to buy back some $4.30 issued paper at roughly a 30% discount at this level. That is a decent ROI for 6 months time and should be looked at it in that fashion. It is a good use of capital which Goldmoney has plenty of. The books are fantastic.

    The shares were trading between $6-$8 and then with a sudden dive from $6 to the mid $3's has some investors a little spooked. I know as a few people have contacted me. The fundamentals of Goldmoney are fantastic which is the reason why some people question how we could experience a 50% pullback with no bad news to speak of? If Goldmoney were to take some action on the NCIB and start buying back some shares it will remove that "is there something I don't know about panic" and provide investors with an ease of mind while also inspiring potential new investors. Buying back these cheap shares also acts as a form of Marketing the stock. I see that as the additional perk to an existing eased investors mind.

    If it was up to me taking action on the NCIB I wouldn't be doing any big volume purchases as I don't think that works as well. I would just make small weekly purchases. As the Buy transactions and retraction/cancellation transactions start appearing regularly on the Insider Buy report it will grab some new investor attention and ease the minds of existing shareholders. Such a small amount of money can have a significant positive impact and get the stock moving in the proper direction.

    Goldmoney is close to the launch of Goldmoney China which in the last quarterly earnings it referenced an expected launch by March 31st. I am excited about that along with my excitement for Mene. The last Financials are looking fantastic with plenty of growth so there is no reason for the Market Cap to be at this level.

  • powslayerpowslayer Posts: 102 Bronze ✭✭✭
    @GoldIsCurrency just to be clear I think Goldmoney China and Coldblocks are needed for the share price to gain traction not for the company to buy back shares. I think there is more going on behind the scenes that has not been disclosed that will prevent the company from buying shares at this time.
  • GoldIsCurrencyGoldIsCurrency Posts: 1,773 Gold ✭✭✭✭✭
    @powslayer My apologies I had read that comment wrong. You are probably also correct that Goldmoney has lots going on behind the scenes.
  • GoldIsCurrencyGoldIsCurrency Posts: 1,773 Gold ✭✭✭✭✭
    NCIB. Get on it.
  • RocketDogRocketDog Posts: 621 Silver ✭✭✭✭
    I think that if the economy(ies) / currencies start to weaken and people run to gold (with gold prices rising more than can be supressed by paper), then Goldmoney stock should go up, even if the stock market in general is going down. Plus, if Goldmoney is getting caught up on their validation process (which it seems they may be) that should help too. Of course, the loss of ACH transfers is going to slow down the rate at which some of us are willing to transact with Goldmoney. (At least by causing larger, less frequent, transfers by wire at $30 each instead of smaller, free transactions).
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