Bought to open GPL

action

Bought 6,000 shares of GPL at $1.34. Total cost after commission was $8,028.15, or $1.34/share.

price target and time frame

The stock dropped sharply on 7/7 on the announcement of a capital raise with dilution. I think the company has been a good operator, and will convince the markets that they can generate a decent return on the capital they raised. In the shorter term (by end of September) I am hopeful that the stock can at least fill half the gap it created on 7/7. That should take it to $1.74.

stop loss

It’s a volatile stock, so I am going to give it 10% room to move. For now, I won’t sell unless it closes below $1.20.

rationale

The UK vote to leave the EU is already renewing calls for additional monetary policy accommodation in the UK and Europe. The Bank of Japan seems to never run out of excuses to debase the Yen, and the Fed’s commitment to raise rates seems highly suspect. The demand for a currency that cannot be debased is not going away. Meanwhile, with USD11 trillion in global fixed income yielding negative interest, the fact that gold has no yield seems to weigh less heavily.

The catalyst for gold miners to appreciate is that gold is appreciating. That won’t really stop, unless a true global expansion sets in. As long as global growth remains challenged, this should be a reasonable trade.

Great Panther Silver is a Canada-based Silver and Gold mining company with operations in Mexico. They have significant expansion potential at a reasonable all-in sustaining cost (AISC).

I was looking for some exposure to precious metals, and based on historic gold/silver ratio (see below), there’s still some catch-up potential for silver.

gold/silver price ratio, from Tradingview.comgold/silver price ratio, from Tradingview.com

July 22, 2016 at 4:36pm · GPL · buy to open · stock


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