Posted by: graemebird | May 20, 2009

Secret Shares Blog Out-take/Galaxy Resources.

I’ve got another blog going where I scribble down some thoughts on the shares that I’m buying. But its a private blog just to log my pre-emptive reasoning of the time. Usually you hear from small-time share pundits talking this or that about shares. Most people talk about their successes. I think if I throw in big failures and half-successes, missed opportunities and examples of covering the downside loss, then this will be more useful to others who want to take this sort of thing up.

I feel a real need for ethical investing though. I’m serious. To me you ought to try and make money buying horribly undervalued shares, and selling those shares when they are still somewhat undervalued. This is what you can do to put money in your own pocket and to correct for our hateful monetary system and our hateful system of interventionism.

Now I’m not talking to you fellows who have already got your skills together as traders. I’m not saying you ought to change your style. What I’m saying is that if you are new to share investing why not learn to make money trading where both when you buy and when you sell the share is STILL UNDERVALUED!!!!!

Thats ethical investing in my book and the other thing a new trader ought to try and do is he ought to try and make money on local small-caps and particularly local small-caps that are going to help us cope under war-time conditions and under conditions of potential collapse…… the danger period for this collapse being particularly in the twenty-tweens and twenty-thirties. The twenty-tweens since this will be the aftermath of the American currency collapse and the climax of decades of environmental fascist energy deprivation plotting….. And the 2030’s because this ought to be one of the nastiest phases of the new “little-ice-age” as well as being the height of Chinese relative-power.


I sez support your small-cap. These are the guys who represent what capitalism ought to have been. So ethical investing really consists of buying super-cheap small-cap stocks that are from companies that will help us stay strong, and then selling these shares when you can make quick bucks, like the greediest pig on the farm, and yet still be selling these outfits for a bargain price.


I only pulled about $700 out of these shares. If I had held just that little bit longer, and visited the witchdoctor with the office in Auburn, then maybe I could have liberated several thousand. I cannot say I made a mistake. Nonetheless I want you guys who aren’t yet traders to try and learn to make money trading in this hyper-ethical way. So perhaps you might learn from my experiences win or lose. But be warned. Its basically just stream-of-consciousness crapola:

Private: Galaxy Resources GXY
January 19, 2009 by graemebird
Net Present Value of one of their projects is held to be 128 million before tax . They are mining a pre-lithium substance.

Market cap of only 19.816565 million. 48.333085 million shares outstanding.

Going on that NPV alone. I’ll cut that in half to get 64 million NPV. And on that basis alone the shares ought to be at least three times as expensive as they currently are.

Wow. They really are being kind to selected investors. Since the current price is 41c per share with an updated market cap of 21.08 million.

Now I’m saying a fair price would be three times what it was based on the lower market cap. Hence any price under one dollar is a good price based on my loose assumptions.

I’ll put in a low-ball bid as 38c per share perhaps. See how that goes.

Price per book is 0.13. Hence if the share price tripled right now the price per book would still be a low .39. This is a good buy if you think the world will be desperate for lithium batteries.

So why are the prices so low? I think they ran at a loss last year. CEO Iggy Tan (Bloke with a good strong Aussie accent of Asian heritage) talks about the project strategy of getting a good cashflow up early on.

We here in Australia are fortunate to have a string of these, apparently undervalued little mining companies that no-ones too much interested in. The thing is this. If they are already at a good cash flow, posting solid profits, then the price is likely to triple. Investors just cannot seem to get interested in small companies with good prospects until the actual cash is rolling in.

Ziggy’s company will likely hit good solid share-price increases early on once they start making an even modest quarterly profit.

This is something I’d definitely want to get involved with:

Galaxy Resources Limited (ASX: GXY) is pleased to announce an invitation to shareholders to participate in the
Company’s Share Purchase Plan (SPP).
The plan entitles eligible shareholders of the Company to purchase fully paid ordinary Galaxy shares worth up to $5,000 at a
price of 35 cents per share, free from all brokerage and commission.
New shares under the SPP will be issued at 35 cents per share, a 18.6% discount to the closing share price on 14 January
2009 (43 cents) and a 16.7% discount to the volume weighted average share price for the 5 trading days (42 cents) prior to
14 January 2009.
The funds raised from the Share Purchase Plan will be used for working capital as the Company prepares for the next
phase of the Mt Cattlin Lithium Project development. The results of the Definitive Feasibility Study show a highly robust
project with capital cost of $68 million and Net Present Value return of $128 million. Galaxy has assembled a strong
professional team to lead the development of the project
The plan will open on 20 January 2009 and close on 6 February 2009. Shareholders registered as at the close of business
on 16 January 2009 will be eligible to participate in the offer.
Share Purchase Plan documentation will be mailed a few days after the record date.
– ENDS –
For more information, please contact:
Iggy Tan

Katherine Knox
Managing Director FD Third Person
08 9215 1700 (08) 9386 1233
0419 046 397 0421 186 129

Thats a good sign there. Shows them looking out for their long-term shareholders. Although clearly its a bit of a capital-raising exercise. And could dilute the stock some in the short-tun. If they are offloading at 35c per share then 38c would be a good lowball to kick things off with and perhaps become eligible for the share purchase plan.

7000 shares at 38c per share would be a bid that cost 2660 dollars plus fees. This bid ought to be amended as soon as I can find out what the eligibility criteria is for the special share offer.

Whats cool about these small cap companies is that you can ring up the boss. I’d want to know his attitude to the company buying back and retiring its shares when it hits the solid cash flow. Its better for the shareholders if they do this slowly until the shares are up close to some sort of notion of fair value. This would be in preference to dividends. Although dividends might be better if the shares are quite a bit above fair value.

I ended up putting in a low-ball bid for 8000 shares at 37.5 cents per share.

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  1. We may be starting to get a bit of an explanation for Phil-The-Greeks contention that centralised abuse of human beings leads to creativity. Now Phil is not an unknowledgable fellow. I once had a different thesis about these great artistic achievements. So I have an argument I’d like to make but am not knowledgeable enough to make it straight without a lot of research.

    So lets draw out Phil. Who is apparently Greek. If thats not some sort of euphemism. Lets make him back his theory up in the hope that we may find a better theory lurking there.

    “Re the profound influence of Black music on George Gershwin.

    His most ambitious composition was Porgy and Bess (1935). Gershwin called it a “folk opera,” and it is now widely regarded as the most important American opera of the twentieth century. Based on the novel Porgy by DuBose Heyward, the action takes place in the fictional all black neighborhood of Catfish Row in Charleston, South Carolina. With the exception of several minor speaking roles, all of the characters are black. The music combines elements of popular music of the day, which was strongly influenced by black music, with techniques found in opera, such as recitative and leitmotifs. It also includes a fugue and “advanced” techniques such as polytonality and a tone row. For the performances, Gershwin collaborated with Eva Jessye [leading female Harlem Renaissance composer and conductor], whom he picked as the musical director. One of the outstanding musical alumnae of Western University in Kansas, she had created her own choir in New York and performed widely with them.”

    Well you bet that Gershwin was influenced by black music. But the slaves also were influenced by white music and a white bible.

    Nothing swankier than Rapsody-In-Blue. Can anything best it OUTRIGHT last century?????

    Super-fucking-cool even when whitebread toffs and homos play it. Surely you guys can find the smoothest version. What a sensation. Not an excuse for slavery or slavery-lite but a sensation nonetheless.

    For my part I like this scene in a movie where Gene Hackman shows up to recruit some Vietnam Vet and his girl complains that he never takes his sunglasses off. And that he does this and he does that and he plays this stupid music and so forth.

    And the dudes comeback is “Hey. This is GERSHWIN”

    Clearly we don’t appreciate Gershwin enough. Only when Gene tells him the mission does the soldier take his sunnies off for the first time. I know just how he feels but I don’t know why.

  2. “Harry Clarke is an idiot.

    A few days ago Clarke ran a thread about how happy he was the libs were ahead in the polls. Naturally, after his recent public contemplation to “vote Greens” this seems to be more than a little confusing. In fact it’s a little odd.”

    Yeah its no good is it. But he was an alright lefty once. Once you decide that you really don’t care about the truth there is no way to keep your thinking straight. His compromise with the Green menace has left him a confused old man. With apparent, if deceptive, symptoms of premature dementia.

  3. Renewing our friendship with the French.

    I think we all know that there are a lot of rapscallians in FRANCE. And of course all good men were pissed off that the French would not even show up for target practice to get the vicsious tyrant to back down. And instead helped to make war inevitable. And this so much more upsetting because the French have the crack special forces that were needed for the operation.

    So of course this anti-French feeling. Well it seeps through into all things. And into ones appreciation of a song about an attached woman running rampant in France and apparently getting ravished by one of the locals. I could never get with that song myself. But since we have the new bloke. And really he’s one of us. And he’s a good bloke and the French after all did vote for him, well perhaps its time to look at these tangential matters anew.

  4. The most brilliantly self-serving chick-lyrics (written by a good and Christian male) EVER…..

    I’d say. Her values are corrupted but she’s open to change.

  5. “But how does he “know” that synaptic activity occurring in the brain amounts to a computation? He doesn’t; it is a presumption of classical cognitive science. BTW, pattern recognition software is like a Trabant compared to connectionist machines.”

    Exactly. The computer is digital. But the brain is analog. The computer is bivalent deductive logic with firepower. But the brain is fuzzy logic and is dead slow. The only firepower coming from processes in parallel and ubiquitous networking.

  6. “I’m surprised so little has been said about the EPA’s proposal to regulate greenhouse gases; its a very big step in the direction of the US becoming a poliziestaat (policy state).”

    I may as well have been Rip-fucking V
    ((I’m surprised so little has been said about the EPA’s proposal to regulate greenhouse gases; its a very big step in the direction of the US becoming a poliziestaat (policy state).))



    You know nothing kid. So for your benefit here is what a real women looks like:

  8. These are the benefits you are missing out on Sinclair, by not being the real deal. By not learning the material.

    “There’s no heavy lifting, the pay is excellent (on a per hour worked basis), there are long, long vacations (did I mention long?), the work is meaningful, you are promoting liberty and good (Austrian) economics, you will inspire generations of students, some of them will follow you into the professoriate and that will increase your satisfaction even more, you will have plenty of time to publish, and, in general, to make of yourself a pain in the neck to the bad guys. What more could anyone want from a profession?”


    These be the very benefits you will be deprived of in your dotage if you substitute displays of tribal allegiance for economic science.

    TRY WINNING. Try beating these people to a pulp. You will get desensitized and you will learn to like it. And then there are people out there who may feel good about covering your position.

  9. I made a point on that secretshares thread back in January. With these small-caps you can ring up THE MAN!!!!! I rang up his office to try and get his attitude. Well I didn’t get to talk to Iggy himself. But I got to talk to someone who worked closely with the boss. There is not enough of this going on. We want to get rid of anything that detracts from these small-caps. And a fellow who puts down even two grand ought to feel an outrageous proprietary interest. Its your company. THINK:Its MY COMPANY.

    All this sort of stuff is very healthy from a societal point of view. These mega-bigshots in the management elite hogging out on huge stock-options and voting eachother outrageous pay-rises isn’t the sum total of what economic liberty ought to be about.

    Ring Iggy up! My bet is that he’ll talk to you. Maybe we ought to make it from now on that we don’t lay our money down for any outfit where we cannot ring up the boss.

  10. Interesting take on ethical shares. I guess like me you won’t be buying BP at their lows??

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