Novo Resources Corp T.NVO

RE:RE:RE:RE:RE:RE:RE:Time and Patience ... and also Endurance and Resilience

[stocksluice]

TXRogers wrote:

stocksluice wrote:

TXRogers wrote:

stocksluice wrote:

TXRogers wrote:

stocksluice wrote:

TXRogers wrote:

WG wrote:

"How "time and patience" has paid off for NVO. 47:16 to 49:40"

https://www.youtube.com/watch?v=NSKSqyTJE9Q

These days, investors are bombarded with different styles, motives, and techniques applied towards making money in the equity markets.  Many people must be confused on how to engage in market investing.  So, I figured I would share my view on the matter.  Especially with how one chooses to view Novo in the grand scheme of things.
 
I would like to highlight the 5 main types of investing. 
 
The first 4 types of investing are focused on trying to make money and “grow your wealth” within a rigged and corrupted system, where everything is a basically a lie or premeditated fraud.  Most of us dwell in this world of the 4 types.  Investors have little choice because this is the System in which our equity markets exist.  It may be a hopelessly lawless casino, but investors try their best to come out with something positive in the end.
 
The 5^th type of investing (Business Participation) is uniquely different.  It goes well beyond “value investing” and into the realm of endurance and wealth preservation.  It is much more that simply “value investing”.
 
Here is a brief Summary of the first 4 investment types, of which most are familiar:
 
 

1. Medium to Long Term Investing:

 

Investors intend to be medium to long-term owners of the companies in which they purchase shares. Having selected a company with desirable products or services, efficient production and delivery systems, and an astute management team, they expect to profit as the company grows revenues and profits in the future. In other words, their goal is to buy the greatest future earnings stream for the lowest possible price.

 

2. Short Term Speculation:

 

According to Philip Carret, author of “The Art of Speculation” in 1930 and founder of one of the first mutual funds in the United States, speculation is the “purchase or sale of securities or commodities in expectation of profiting by fluctuation in their prices.” Carret combined the fundamental analysis popularized by Benjamin Graham with the concepts used by early tape readers such as Jesse Livermore to identify general market price trends.

 

3. Trading:

 

A trader is someone who buys and sells securities within a short time period, often holding a position less than a single trading day. Effectively, he or she is a speculator on steroids, constantly looking for price volatility that will enable a quick profit and the ability to move on to the next opportunity. Unlike a speculator who attempts to forecast future prices, traders focus on existing trends – with the aim of making a small profit before the trend ends. Speculators go to the train depot and board trains before they embark; traders rush down the concourse looking for a train that is moving – the faster, the better – and hop on, hoping for a good ride.

 

4. Index or Mutual Fund Investing

 

Frustrated by inconsistent returns and the time requirements to effectively implement either a fundamentalist or speculator strategy, many securities buyers turned to professional portfolio management through mutual funds. According to the Investment Company Institute’s Profile of Mutual Fund Shareholders, 2015, almost 91 million individuals owned one or more mutual funds by mid-2015, representing one-fifth of households’ financial assets. Unfortunately, very few fund managers can consistently beat the Market Indices over extended periods of time.
 
Therefore, it is not surprising that exchange traded funds (ETFs) emerged with the issue of the S&P 500 Depository Receipt (called the “SPIDER” for short).  Similar to the passive index funds, ETFs track various security and commodity indexes, but trade on an exchange like a common stock.  At the end of 2014, the ICI reported that there were 382 index funds with total assets of $2.1 trillion.

 
 
The 5^th and final Investment type is unique in its focus because it targets the endurance of a business that is external (not exposed) to the antics of our financialized world.  This investment philosophy IS NOT for investors that are trying to get rich.  This IS for investors that are already rich, and want to preserve and pass on their wealth to their future generations.
 
 

5. Business Participation

 

The focus is on scarcity and endurance within the investment portfolio, and the stewardship of what is irreplaceable capital.  This type of investing is OUTSIDE the system and its longevity and resilience is not dependent of the fraudulent activities of the current financial system.  The main idea is to participate in a business endeavor that grows an investor’s savings.  This is extremely unique (and rare).
 
If you have 2.5 hours to spare, I strongly urge you to listen to Grant Williams interviewing Tony Deden.  Deden exemplifies this investment style.   The perspective is absolutely fascinating, and in many ways highlights how business investment should be conducted.
 
 https://www.youtube.com/watch?v=a4_U6bS-cU4

 

 

The reason why I bring these investment styles up as a topic of conversation is because they all apply to this specific investment in Novo Resources.  Personally, I lean more towards the styles of 1. and 5., which is represents my perspective on this investment:
 

1. Long Term Investor 
5. Business Participation.  

 
That is why I show much less interest towards investor opinions that focus on trading or short-term speculation.
 
Tx
 

Nice post, Tx. I watched that Deden interview a few weeks ago. You're right, well worth watching. Takes me back to the days when men were men. He's definitely not the Robinhood soyboy type.

I tried to locate myself in the categorization you put together, and found myself initially investing in NVO under your first category (medium to long term investing), back in 2017, until in 1H2018 I began to wonder if the train I had boarded was actually heading in the direction that I thought it was. For sure, the ride was not turning out to be a non-stop itinerary, and it began to feel like a milk run.

Consequently, after taking some handsome profits, and with a new found respect for technical analysis and the importance of gauging market sentiments, I shifted more toward your second category (short term speculating), where I have gravitated about since 2H2018 to this day, having dipped my toes in and out from time to time, just to remain engaged.

I can't say that either of those first or second categories quite capture where I'm at these days. Rather, I see myself hanging out at the station, waiting first in line to get on board as soon as the conductor calls out that it's time to get that train moving (chug chug chug means free cash flow to me). Once I'm back on board, I'll remain vigilant to ensure the trip really is non-stop, and not just another milk run. If it is, there will be plenty of bag holders, and I won't be amongst them.

BTW, I've watched QH's Crescat presentation from a few weeks ago... is it just me, or does QH come across as a mite premature with his ubiquitous and hyperbolic use of adjectives? Some may view that as the mark of a very confident man, but to me, I see it as a caution sign. If it sounds too good to be true, maybe, just maybe, it's not. Time will tell, but in the meantime, I'm not risking the opportunity costs, and I suspect I'm not alone in that regard. Be that as it may, GLTA!
 

I understand SS.  It all can be subjective.

The one thing that must be stated is that an investment style may initially be closer to an intention in the early days, than the confirmed path.  A business that thrives for multiple decades cannot be confirmed as such in its early years.  It only claims successful longevity in hindsight.

So, I can only speak to my intended goal in this investment.  And more importantly, to explain why this intention results in my minimal attention to the shorter term investment styles.

With regards to Deden:  It was unfortunate that Grant Williams did not ask him if he ever invested in a new business prospect or market.  And if so, what were his reasons.

Either way, one certain aspect where a consensus is more easily reached:  It's not easy.

Tx
 

How well I recall the second coming of Steve Jobs. That NeXT step for Apple was truly a big deal, but what was even bigger was when the iPhone was announced. That was the real game changer. When/if NVO has it's iPhone moment, I'll be there.

You're right, that would have been a great question to ask Deden. Perhaps he did and it ended up on the cutting room floor, so to speak. Apparently over 4 hours were recorded, so a lot was left out.

Personally, I do not expect an "iphone moment" in the Novo business.  

What I expect are incrementally progressive stages that eventually lead to a wide spread recognition that a significant business has been built.  And that it has much further to go.  This point of recognition will not be same for all of us, and it may come further out in the future for many (which will carry an added cost in share price if it occurs).  That's investing.  It's subjective on many levels.  

One of the prime focus points that I watch for in Novo, is the weight of current costs vs the benefits of accelerate timelines.  The purchase of the MOY assets is a perfect example.  The costs of acquistion and operational modifications is an example to bring product to the market earlier (and in phase with the early stages of a gold bull market).   

Not an "iphone moment".  But more of the timely execution of opportunities that arise in building a business.

Tx
 

Yes, the iPhone moment was rather a vague metaphor... For me, what that means is free cash flow that clearly demonstrates the economics of the venture... More specifically, at least $10MM in 1Q2021 would do it for me.
 

Fair enough.  You've set yourself a personal investment criteria.

No one can argue against it.  It's as valid as anything else.

Tx

Yes, to each his own, as they say, that's what makes a market.

A bit of history in alluding to Apple, when we were all under the impression that the conglomerate zone was high grade (~68g/t) extending througout the craton, I once mused that NVO might become a $1T company as well someday... looking back, had those assumptions held true (not to discount the possibility that to a lesser extent they still may), $25 to $30 per share would have been quite reasonable and perhaps even overly conservative conjectures.