There’s a lot of speculation and guessing on the board these days. What does it mean that we have more bashers or shorts or just negative commentary? What’s it going to take to move the price back up? How will management ultimately seek to realize the value it seeks to get out of this company? Etc.
Here’s what I think.
- Plan A: The effects of global macro-economic forces will probably play a much greater role in the appreciation of gold and NFG and all other PM assets than will individual company fundamentals.
- Those effects seem to be finally forming up. Many of us have been watching for them and expecting them for literally over a decade. Circumstances keep making the play-out scenario of those forces more likely every day. We can’t predict when they’ll have their extremely positive effects on PM’s, but it’s looking more and more like it could happen at any time.
- Plan B: Macro aside, NFG’s fundamentals just keep getting better. So, if macro doesn’t playout the way I expect, my plan B is that NFG’s value is recognized more slowly and over time.
- Plan B assumes that gold stays priced around $1800 to $2000 for the foreseeable future. That’s NOT to suggest it can’t tank to the $1,700’s momentarily. But I expect a long term chart to show gold trading over $1800 basically from now on.
- Based on all this, there is no reason not to hold NFG. And there is also no reason to watch it every day. Unless it changes the fundamentals, I don’t care much about day to day news. Of course I am interested in following incoming drill results and management disclosures. But if nothing changes the fundamentals on either a macro or NFG specific basis, I really don’t need to know whether NFG is up or down 20 or 30 cents on any given day.
- Not often am I invested in a stock in which my interests are so aligned with management’s and all the big shareholders as NFG. I don’t know whether they’ll sell, sell part and build a mine, or keep it and build the whole thing. I don’t really need to know. I think my interests are aligned with theirs and, given the incredible asset this company controls, one way or another, they are going to make us all a lot of money. My only job is to keep owning the stock and to double check my thesis once in a while just to make sure nothing has changed.
Because of this long view, I confess I’m not reading the board very closely because I don’t expect to find anything that affect my thesis. I try to check in from time to time just to make sure I’m not missing anything. I encourage the buy and hold, non-trader types like myself to adopt this sort of an attitude about NFG, assuming of course, you are as sanguine about its prospects as I am.
Disclosure: I'm a notoriously bad investor with a horible track record, so allow yourself to be persuaded by this post at your own risk.
Have a great day everyone.