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6/22/15

Regarding albatrosses and necks (from IKN 319)

This is the intro spiel for IKN319. I get the occasional nudge from subscribers to put this-or-that piece from The IKN Weekly on the public blog, but I didn't think for a second that anyone would push me to stick this thing on here. I was wrong, the third mail with the same request just landed this evening and so hey, what the Henry? The only thing that changes is the redaction of a couple of company names right at the end, the rest is as stands.

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Regarding albatrosses and necks
Down dropt the breeze, the sails dropt down,
'Twas sad as sad could be;
And we did speak only to break
The silence of the sea!

All in a hot and copper sky,
The bloody Sun, at noon,
Right up above the mast did stand,
No bigger than the Moon.

Day after day, day after day,
We stuck, nor breath nor motion;
As idle as a painted ship
Upon a painted ocean.

Water, water, everywhere,
And all the boards did shrink;
Water, water, everywhere,
Nor any drop to drink.

The Rime of the Ancient Mariner
Samuel Taylor Coleridge

There's this ongoing line of complete bullshit commentary in the metals and mining world that's so pervasive it'll even suck me in on occasion. It's sellside crap to the Nth degree.

·     If times are good buy stocks, they're going up.
·     If times are bad buy stocks because the cycle will come around.
·     If times are neutral and nothing is happening buy stocks, it's a coiled spring out there.

And for sure no, that doesn't just apply to the mining industry and its motley crew of assorted parasites, but as this whole sector smacks of the desperation of wanting SOMETHING to HAPPEN because if not, the blood will stop flowing and the parasites will have nothing left to feed upon, I'm finding it all a bit too brazen to bear easily.

We're down to promoting a "selective bull", peddling expertise in the bifurcating market, promising riches by choosing the best and forgetting the ones that will have to die. "Stick with me, I'm the smart connected writer, and for a modest monthly sum I'll lead you through the minefield of moose-pasture peddlers and show you the real deal miners". We're down to cheering any minor move made by silver against gold and ignoring in finest "LahLahLah I Can't Hear You" manner any macro market news that doesn't fit the narrative. We're down to pushing conferences "headlined" by the same abject idiots who predicted imminent hyperinflation five years ago and who'll just say the same things to their dwindling band of True Believers in this conference season, and charge them hundreds of fiat dollars for the privilege to boot. We're down to the sellside brokerages running half million dollar brokered private placements. We're down to minor exploreco pumps, to promotional BS games that are turning incestuous (witness the fun and games between the smarter and the dumber promoters around Lion Gold (LIO.v) for a good example of how the smartest ones will survive by eating the neophytes if necessary). I could continue, but the real message I want to get across is this:

A) Nothing is going to happen in the metals market until gold takes off.
B) Gold may do something in 2015, but it's unlikely to happen before the end of the Northern summer. That's post-Labor Day, that's 3q15, that's going to feel like a loooong time from today in late June.
C) Don't waste your money on mining sector commentary. Let us waste our own time, no need to join us, there's so much more out there that's better to read (for example my own muse at this time, Infinite Jest by David Foster Wallace).

So do yourself a favour and sell a few stocks, or lighten a few positions, take some cash off the table and go play with it somewhere else or save it for when things get fun again because believe me, this is not fun. Watching the desperation in freeloaders' eyes is not fun. Trying and failing to explain to junior mining company officers that the party isn't just over but it's OVER FOREVER is no fun. While you're at it, why not unsubscribe from this publication and any other that's managed to get you to part you from some of your hard-earned cash? That's money you could better spend on your spouse, your kin, your car, whatever you like that gives some pleasure. If you feel like coming back later in the year you'll be very welcome here (and I'd vouchsafe that's true for anywhere else you unsub this week) but I see no reason why you should read and keep so fixated on a sector that's showing all signs of going precisely nowhere for the time being. Meanwhile I'm going to keep ploughing on, pounding on numbers, looking at the sector, trying to find a decent trade or three, but I also know that for the time being I'm unlikely to deploy wholesale the cash that's still sidelined, any sales such as the ones announced today are moving details around the edges. My personal plans include:

1) Selling what little copper exposure I have left
2) Perhaps selling (name redacted) if a slightly higher out price shows up in the next couple of weeks.
3) Definitely buying some more (name redacted), perhaps adding to the gold producers.
4) Investigating a couple of interesting explorecos on my radar.
5) Watching the market for any move that proves my assumption of sector inertia wrong.
6) Reading non-business literature and classic novels I've wanted to catch up on.
7) Other things too.

So stick around if you like. After all, it's your money not mine. But if you unsub yourself from this and other publications, I'd bet you'd save yourself both time and money.