Equinox Gold – New High – What’s Next?

by JDH on February 15, 2020

Back on January 11, 2020 I published Equinox Gold Corp – A Deep Dive, where I explained why I thought EQX.TO – Equinox Gold Corp., my largest gold holding, would go much higher.

This three year chart looks good.  Very good, actually.

Equinox Gold traded at $9.62 on January 3, and closed on February 14 at $11.87, so that’s a nice 23% pop so far on the year.  Not bad.

My reasons for expecting a good performance from EQX:

First, favorable gold market.  Money printing, uncertainty in the world, etc.  Gold is up about 4.4% on the year, so that assumption has so far been proven correct.

Second, the company is doing well.  The merger with Leagold will increase production, and that’s good.

Finally, and most importantly, increasing size leads to inclusion in indexes.  We live in the world of ETFs.  The passive investor is king.  So, if you want to invest in gold, you buy a gold ETF.

As I said last month:

…post merger Equinox is easily large enough to be included in the MVIS Global Junior Miners Index, which is the basis for GDXJ – VanEck Vectors Junior Gold Miners ETF, which trades on the big board.

As of today EQX is not part of GDXJ, but I expect it to be added over the next month or two.  When that happens a new wave of buying is required to include it in the index, and up goes the share price.

Of course everyone knows this.  It’s not like I’ve got insider knowledge.  So, I assume the smart fund manager are already buying, so they are positioned when the inclusion happens.

As I also said last month:

There is also the GDX – VanEck Vectors Gold Miners ETF, which tracks the performance of the NYSE Arca Gold Miners Index, which tracks gold mining shares, including the big companies, not just the juniors.

It’s not just one fund that will be buying EQX; there are many.

Equinox should easily be a $15 stock by the summer, and perhaps $20 by the end of the year, so I’m holding.

So far, so good.

More next week.

 

 

Out of Apple

by JDH on February 8, 2020

Last week I described my Apple Experiment; this week I ended the experiment.  You will recall that I bought Apple shares, and sold covered writes against them.  That worked out fine, most of the transactions were profitable, but in the end I decided the risk was not worth the reward.  Yes, making 1% each week is nice, but we live in a world of volatility. Apple traded under $302 and over $324 last week.  That’s a 7% swing in one week.  In other words, my profit of 1% can be destroyed and take 7 weeks to get back.

That’s not a great risk.

So, On February 5, I sold Apple for $321.75.

That worked out fine, since I bought those shares on January 13 I bought those shares for $311.87.

I’ll take it.

What’s up next?

I don’t know.

My assumption is that the stock market will continue to make new highs for the next few months.  Trump’s re-election is now guaranteed.  The economy is booming, unemployment is low, and the Democrats don’t have a candidate to run against him, so with that uncertainty gone, speculators can focus on an up market.

I’m not saying the economy is actually doing well.  Unemployment is low because many people have short term contract jobs, or work in the even more uncertain gig economy (like driving for Uber), but it’s perceived to be doing well, so that’s all that matters.

Gold has paused, by is still looking good, so I’ll continue to focus on gold in the coming weeks.

That’s the update, thanks for reading, more next week.

Apple – AAPL – My Experiment

February 1, 2020

We all know the Feds are printing money like crazy, and the stock market will keep rising until the US election in November, so it’s prudent to take a position in the stock or stocks that will benefit from a rising market. Most of my portfolio is in gold, but you’ve got to diversify, so […]

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How will China Impact the Market?

January 25, 2020

As I write this on Saturday morning, January 25, 2020, the coronavirus spread is accelerating in China, and that’s not good news. Gold was trading at $1,546 on January 21, and sits at $1,571 now, so it would appear that speculators are moving to gold for protection against whatever may happen next. Needless to say, […]

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Equinox Gold and Tesla: Some Thoughts

January 18, 2020

Last week I did a deep dive on Equinox Gold, when it closed at $10.40, and I said: Target price $15, with $20 possible by the end of the year. I’ve got buy orders in at $10, with stink bids at $8.50 in the event of a market collapse. EQX.TO – Equinox Gold Corp. closed […]

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Equinox Gold Corp – A Deep Dive

January 11, 2020

My largest gold holding is EQX.TO – Equinox Gold Corp. The two year chart looks great.  From a base building period in 2018 around the $5.00 level, to the “crash” at the end of 2018 down to just over $4.00, to a much better 2020, where Equinox closed at $10.40 on Friday. Of course charts […]

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Gold vs. Gold Shares

January 4, 2020

Friday January 3, 2020 was an interesting day.  The price of gold was up over $23, closing over $1,552, only slightly higher than the 2019 high hit on September 4. Two items of interest: First, there is obvious overhead resistance at around $1,560, so this could be a level where gold pauses for a correction. […]

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Breakout in Gold

December 28, 2019

That was quite a week, eh? NUGT, our highly leveraged proxy for gold mining shares, started the week below $27.50, and on Thursday traded above $34.50, before settling back to close the week at $33.38. That’s not a bad week, and that puts NUGT back to where it was in September, which may indicated that […]

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Tesla: Hew High: Funding Secured?

December 21, 2019

I must admit, I am stunned by the fact that Tesla is trading at an all time high. $400 has served as an impenetrable resistance level, as evidenced by this four year chart.  On three previous occasions Tesla couldn’t break through, and finally dropped to the November/December 2016 support level in the late spring of […]

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Deep Dive on Gold

December 14, 2019

Okay, not a really deep dive, but let’s take a look at two charts. First, a 1 year chart of gold: The bottom over the last twelve months happened in August 2018 around $1,160, and then gold got close to $1,560 in August of this year before correcting down to almost $1,440 last month.  Gold […]

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