Moly Mines ltd

Little did I know that when I sold my Moly holding on the 17th January 2011, a day later the company issued a company update regarding (partly and most importantly) the financing of the Spinifex Ridge Project.

Essentially there would be a delay in the financing, hence raised doubts about the future of Moly's molybdenum project. The announcement resulted in a drop of Moly's share price by 22% to $1.10 by the time the ASX close. What a near miss, as I am not in the habit to put a stop loss on my share holding.

Looking back at the chart, I should have bought back in at $1.02-1.03, and then sold again around $1.20 for a quick profit, but unfortunately I did not. The uncertainty was putting me off a little bit, and while I still believe that  the future still might be great for MOL, I would just sit back and wait for the cloud to clear out.

Charting wise, MOL is in the downtrend at this moment, sliding back to $1.14 yesterday. With the uncertainty and lack of good news, I expect it still drifting down from here.  Another issue to consider is the amount of funding that Moly need. The company needs around $1.2 billion to build the whole mine.  Hanlong funding of $500 million is not enough, so we should expect another right issue to top it up.

Oz Mineral Reward?

I stuck with Oz Mineral through the dark days of the GFC, and it was a nerve breaking experience. It followed by the class action (which turned out that I am not eligible, as I bought before their timeline) and a great recovery, if I may say so.

Yesterday, Oz announced a $587 millions of profit and cash on hand of approximately $1.33 billion. No debt!.  It is followed by the news about rewarding the shareholders with a fat payout of higher dividend, capital return, consolidation of shares and a buyback.

It's all good, I suppose, but when Oz concern, there's always a question in my mind about the action of Australian Government at the height of the GFC. I am not an expert in public finance, so my question is why the Aussie government did not help those mining companies that had trouble with their finance then? Instead, many of those companies are forced to sell their assets at very cheap price to Chinese companies which were backed by the Chinese Government. I realise that mining companies are private entity, but the Government could still help them by buying their assets, or shares in their companies. That would be a great investment, and if they would have done that, they will sit in a  very nice profit, and saving Australian mining assets at the same time.

But apparently, everyone's a winner from Oz Minerals' Chinese transaction. Minmetals (chinese) got a good deal, so did Oz

Anyway, back to Oz results:

• Final dividend of 4c a share (7c for the full year)
• Subject to shareholders approvals:
• a capital return of 12c per share
• a share consolidation in the ratio of 10 to 1
• On market buyback of up to $200m

Those would see a return of more than $600m to shareholders for the next 12 months.

Picking Up Pennies in front of a Steamroller

Finally, I've got the hold of Nassem Taleb's book, The Black Swan: The Impact of the Highly Improbable, and read it.

There were a lot of expectations associated with this book for me. This book is quoted so much in the wake of the GFC, that I thought it's a purely stock market or investment book.  Well, I was wrong. While I think 'The Black Swan' is a good read for financial people, it's also a good read for every curious mind.

The book is well written, with some humor in it, but to be truthful, I sort of got lost in the middle of my reading.  I found the book a bit repetitive, rather tedious and taking a long time to make a point.

The main point of this book is:

1. We can not possibly know everything
2. The future is uncertain and dynamic and has many possibilities.
3. Aftermath, there are many who tell you "I told you so", they actually had not.

Quote I like from the book:

• Nobody knows what's going on
• What we don't know can be more important than what we think we know.
• Most financial traders are 'picking pennies in front of steamroller' exposing themselves to the high impact rare event yet sleeping like babies, unaware of it.
• Information is BAD for knowledge
• Don't ask the barber whether you need a haircut, and don't ask academic if what he does is relevant.
• Financial analysts, experts, strategists, portfolio managers generally don't posses much knowledge about the market, but general public listens to their opinion
• Many "experts", like economists, are no better at predicting than regular people.