Goldbugs, TA and Stragglers

I do believe the safe route to profit from the gold exploration cycle is Franco-Nevada.  FNV has a deep portfolio of royalty rights and the cash to invest in additional juniors prospects at favorable prices.  Junior Gold Exploration at Zeal.  Seven arguments for gold stocks:  Casey Research.

Fed heads Lockhart and Dudley are open to more easing.  As for Friday’s face ripper, I have not even tried to understand the European news:  Sober Look.  What I do know is policy makers will actively choose to debase or society will default.  Bill gross seems to be thinking inflate or default at Pimco.  More irreverent is Jim Willie.

Bottom calling:  The CRB Just Formed A Final Three Year Cycle LowToby Connor.  Treasury’s vs CRB:  Stockcharts.  I see The Classic Failed Breakdown Trap in copper too:  Stock Sage.  Transports look good:  All Star Charts.  Long term price/earnings ratio:  Chart of the Day.

Meanwhile, US Global Trade Forecast to Grow 4.7 Percent at JOC.  And this decade will be the most innovative in history at VB.

Book: Get Smarter

All serious investors are avid readers.  You, after all, found Independent Stock Analysis while poking around the internet.  But don’t forget the books!

  • Get Smarter by Seymour Schulich.  As a Canadian self-made billionaire, Mr. Schulich has a long history in the investment, mining and oil industries.  The forty-nine bite-sized self contained chapters give insight on relationships, business and values.  As a co-founder of the original Franco-Nevada, Schulich’s seventeen page appendix on the life of the business was especially interesting to me.

Independent Stock Analysis is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for ISA to earn a few dollars in advertising fees.  Happy reading!

Precious Fix

Ridiculousness continues:  Multi-trillion plan to save the eurozone being prepared at The Telegraph.  State pensions will be papered over imo:  Financial Sense.

Fleckenstein – Fed Takes Half Step, Will Be Forced to Act Again at King World NewsA visible slowdown in global economic activity at Sober Look.

Prepare for the Pivot Point in the Gold Exploration Cycle The Gold Report.  If so, Franco-Nevada would be the bluest of blue chips with their perpetual call option upside.  The occasional junior would explode, senior producers would do fine, SLW and RGLD would be good, but FNV would be best.  If the thesis is correct.

The trader goldbugs love to hate, Dennis Gartman:  “Buy Miners, Not the Metal” at Money News.  Today doesn’t look so good, but are Gold Miners Poised to Rally?  Stock Sage.

But which way?  Gold and Silver on the Verge of Something Huge! – Are You Ready?  Safe Haven

Investment Income Idea

Twice recently we’ve warned against chasing yield.  On Tuesday Forbes pumped a high yielding energy name, which promptly cut their dividend in half later that day.  Oops.

Here is a name to consider:  Natural Resource Partners (NRP).  NRP operates a favorite business model of mine:  Royalties.  NRP does not get their hands dirty, they just take a cut off the top line.  The asset base is predominately coal, of which we’ve noted the bloodbath.  NRP’s business model, met coal production and Illinois assets have softened the blow.  And NRP is moving into other businesses.

As an MLP, the yield on NRP is 9.60%.  The market cap is $2.4 billion, year end 2011 long term debt was $836 million with cash on hand for growth of $215 million.  Revenue expectations for 2012 are from $335-380 million, a range expected to be tightened up mid-year.  The EBITDA margin in 2011 was 87.5%.

Moreover, with the security bumbling along at a 52 week low, risk management for a position would be easy to define.  Good luck!

Further research:  Latest annual report and 10/kLatest presentation; and a recent piece on Seeking Alpha.