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6/27/16

Sell Dalradian Resources (DNA.to) (from IKN372)

A segment from IKN372, out last night:



Dalradian (DNA.to) and Brexit
Fallout from the UK’s decision to vote Leave last week will come in all shapes and sizes. In the great scheme of things what follows here is a tinysmall consequence compared to the massive issues now on the table such as EU membership, the new political leaders of parties in the UK, et cetera and so forth. But it is our focus subject and we’re also talking about a company we’ve covered on these pages as well as traded (with reasonable success too), Dalradian Resources (DNA.to). Though small, this is a practical consequence of the Brexit vote and our field of interest, so here goes.

It's way too early to be dramatic about the future of Northern Ireland and the ramifications from the Brexit vote result are only starting to show. Therefore I am not talking about clear negatives such as a return to hard borders between North and South, the vote for a reunification of Ireland (though Sinn Fein will push that agenda as from tomorrow in the Irish parliament, it's the party's basic raison d'etre after all), a split from the UK nor even more stressful things such as troops on the ground to quell any resumption of sectarianism (the Catholic/Protestant issues of the country aren't counted in decades but in centuries, yes things are much better now but multi-generational conflicts can be tough to extinguish completely).

I am not considering any of the potential bad cases, for Northern Ireland in general or Dalradian specifically as they are too far in the future to consider seriously for a junior mining company investment. However we must be clear, what this does do is add a significant amount of political uncertainly to business investment in Northern Ireland and that includes DNA. In our focus company's case it's worse, as right now DNA is on the permitting track and in the period when it wants political and authority certainty, from which it goes to market to raise capital (or sells to the highest bidder). Who will be governing the land in two years' time? In five? That's the timescale a mining project such as Curraghinalt needs. What will the laws be? Will previously awarded permits be recognized? Will local grievances become louder? What will the exchange rate be for the pay of workers at the mine? How much tax will the company pay? A hundred other unknowns have suddenly shown their head above the parapet. The Curraghinalt deposit and project is one thing, but its political situation has suddenly taken a turn for the worse. The IKN Weekly's recommendation is to avoid exposure to Dalradian Resources (DNA.to) until such time as the political future of Northern Ireland is better understood. Yes, that means sell if you still own shares and as a post-script, that call goes for other Northern Ireland exposed companies such as Galantas Gold (GAL.v). Even in a best case situation DNA (and GAL and others) aren’t going to benefit as much from the safe haven interest in gold as other juniors, transferring any cash from these to other similar stocks working other countries is a simple and practical call.


Regarding political risk

You may be interested to learn that on this bright and pleasant Monday morning, the biggest story in South America is not Brexit, or the EU's trails, or the UK's political crisis, or the market's slump. It's that Leo Messi has announced he won't play for Argentina any more. And it's top story by mile in all countries, not just Argentina. So, splain me again how South America is such a risk-laden place to invest and the North is the place for investment peace of mind and low political risk, will you?

Past performance does not guarantee future results, but...

...I don't care, HudBay's (HBM) going under U$4:



I've even heard some crazy talk about HBM being a buyout target. The only people who could think that are numbskulls who've never bothered to open this dog's balance sheet.

Pet Rock update

Jason Zweig still getting paid for writing in the WSJ, is he?


6/26/16

The IKN Weekly, out now




IKN372 has just been sent to subscribers. A new trade is the main event, plus laughing at the stupid Brits. Because they're very stupid and there comes a time when all you can do is laugh.

And well done Chile.

Your Sunday evening British Pound update

Another BOHICA* moment for the GBP coming your way.






The waste of space Osborne is due to speak to the world before the LSE opens tomorrow morning, though anything he says apart from "I resign" will be empty words. The man who tried to scare Brits into voting Remain by threatening an emergency budget cannot apply that now, he'd be laughed out the room.

IKN's prediction for Monday: The world gets used to the idea of a UK out of the EU, no panic in the big stage, no crash, but London will start to sink all by itself. If isolation is what they want, isolation is what they will get.

*bend over here it comes again





6/25/16

The second UK referendum vote to come

Things to consider:
  • Establishment will fight tooth and nail for the status quo, be in no doubt. That goes for the UK as well as the EU, both sets of damnfool idiots are now crapping themselves.
  • The UK looks set to disintegrate if Brexit happens, Scotland will want out and probably Northern Ireland too.
  • As nobody knows exactly how Article 50 works, it gives those in charge licence to make it up as they go along.
  • There's a whole wave of "oh no what have we done?" washing through the UK now, like a bad hangover.
  • A petition for a second referendum is already out there and picking up steam. 
  • Also, this.

Therefore it can work something like this:
1) UK triggers article 50
2) EU and UK thrash out a deal.
3) Deal includes referendum and waiver of article 50
4) UK puts it to the people, kinda "OK folks, this is the exit deal they've offered us, up to you to decide".
5) Bingo! A de-facto Brexit Part Deux. If it's rejected, UK stays.

For sure there are plenty of alternatives, you can probably improve the framework but it works as a starting point. It would also have the effect of keeping Scotland (and N.I.) in the UK until the vote is done, the thing that most scares the Brits today. Everyone gets to buy time, including President Boris who would be able to get the big job, trigger Article 50, get  a deal with the EU and offer it to a population who will not vote to break up their own country, no way José.

Your weekend math break

This is unmissable.



Promise me you'll watch just the first minute. From here.

The top three most visited IKN posts this week are...

...in reverse order:

Second Place: "Tweet of the day (UPDATED with UK Referendum news)". I wasn't planning on doing one of those liveblog things, it's all very old fashioned anyway in this thrusting age of social media, but that's how it turned out as the initial pro-Remain sentiment and polls were turned on their heads by the initial hard results, then my personal fascination on how the markets were being moved kicked in. Now we all know the result and Friday shifted the markets around, it's all past history.

First Place: "To clear up the Kirkland Lake (KGI.to) mystery..." in which IKN revealed that KGI is after Wesdome (WDO.to). Subbers knew WDO was being targeted en days ago, then who the suitor was last weekend. This was the public blog heads up and it got the suitable mountain of hits.

Dear Itinerant

Look, I know imitation is the sincerest form of flattery and all that. And you have a good turn of phrase, which I appreciate and it certainly helps sweeten the pill. And it's not direct lifting, you're adding your own thoughts. But all the same, it's starting to wear a little thin. 

That's enough for this time, I think. Feel free to mail.

UPDATE: Itinerant speaks, with the impressive count of seven first person subject pronouns in one short mail.

Dear Otto,
I read your blog most days and I like it for what it is. I also read and like a lot of other stuff, so don't feel too flattered.
In actual fact, I have sourced bits and pieces from your blog and have linked to it on those occasions; and I have recommended your blog to my readers on others.
However, if you think I am imitating you, then you are over-estimating your powers; rest assured I am happiest doing my own thing.
Keep up the good work & regards
Itinerant


Saucer of milk for table nine.

6/24/16

The Friday OT double bill: Monty Python and The Clash

This from the Holy Grail:



This live version of the Combat Rock track:



I dunno....just kinda thought it might be fun...nothing topical here...move along now...


(deep thanks to reader R)

Can only assume Andrew Kaip is shorting Sandstorm today...

...what with his 12 month U$4.50 target on the stock blown out the water so quickly:



Awaiting confirmation.