Why did Univ of Texas Investment Management Co sell out of Ziopharm?

*Full disclosure, I own ZIOP put contracts so my opinions and views are not without bias.

Was UTIMCO "mandated" to sell its holdings in Ziopharm?  Or was that just something a stock promoter made up?

Marketing is an interesting thing, sometimes it borders on propaganda.  Repeat something often enough, and many people come to accept it as fact, even if there are no facts to back it up.

Companies and their advertisers repeat a line over and over until it becomes embedded in the collective conciousness.  If I say "Maxwell House", the first words that will spring into the minds of many people will be "good to the last drop".  Hear the words "Fox News" and the statement "fair and balanced" will likely be associated, even by those who believe Fox News to by anything but.

Its not just in business either, branding statements are all over politics as well.  The city of Toronto had a famous and infamous mayor, who maintained much of his popularity even after numerous scandals and drug use because of the oft repeated line that he "saved Toronto taxpayers $1 billion dollars".  It wasn't true, but it was repeated so often that....in the minds of a good many people, it was.

Which brings me to Ziopharm and the Univ of Texas Investment Management Co or UTIMCO for short.

As most people reading this will be aware Ziopharm and Interexon entered entered into a licensing agreement with the University of Texas MD Anderson Cancer Center.  As part of this agreement Ziopharm issued 11,722,163 common shares to the Board of Regents of the University of Texas System.

http://www.sec.gov/Archives/edgar/data/1019231/000101923115000008/sec13gziopharm.htm

Those shares have since been sold.  But why were they sold?

There's a Seeking Alpha blogger with the username Options2Wealth with over 700 followers on that site who's blogged frequently about ZIOP.  Back on November 29th 2015 he put up a posting: "ZIOP You Ain't Seen Nothin' Yet!". That was back when Ziopharm was trading over $13 per share.  He was predicting big things, to the moon....all the usual stuff.

Then in December 2015 the bottom fell out as the share price cratered all the way to about $5 by the end of January. 

Part of the reason for that drop may have been that the University of Texas reported selling off a large number of their shares, and they've since sold off what was remaining.  The question was (and is) why?

Seeking Alpha To The Rescue

Options2Wealth then wrote another blog posting entitled "Oh, What  A Whupping!" published February 21, 2016.

In this posting the writer explains why he'd been so wrong about the predictions he'd previously made.  And he wrote that the University of Texas' charter "mandated" that UTIMCO had to sell any unrestricted securities, and not to be worried about it because they had no choice basically:

• ZIOP shares that MD Anderson received as part of the landmark agreement it signed with ZIOPHARM and Intrexon in January 2015, were all sold off by the Committee tasked with managing MD Anderson's investments...(Not because the Committee lost faith in ZIOP's technology and decided to bail, but it disposed off those shares because its charter so mandates...) - *Bolding is mine.

And that's all well and good.  But is it true?  Or is it like former Toronto Mayor Rob Ford's claims that he never used drugs?

If you check that blog posting on this supposed "mandate" you will see that I asked for the author to provide a link to that information, but I did not get a reply.  Just another poster saying:

• If the endowment funds receive unrestricted securities, UTIMCO will follow a liquidation plan to convert the securities to cash (see Plan below). When the Funds receive distributed securities, Securities Operations notifies the liquidating investment manager and indicates any restriction on the sale of those securities. If the endowment funds receive restricted securities that cannot be immediately sold, the securities are held until they become unrestricted and then are liquidated based on the liquidation plan for distributed securities."

I replied again asking for a link, but again there was never any reply to my request.  I've done numerous searches of the verbiage in that reply looking for a verifiable source, but have so come up totally empty.  All I find is that its been cut and pasted into investor forums all over the place.

The share price then recovered, getting up close to $10 by the beginning of March 2016.  Did this widely disseminated "information" (sic) about UTIMCO being "forced" to sell help shore up investor confidence?

I have conducted my own research on the matter and have found nothing about UTIMCO being mandated to sell unrestricted securities, like those paid to them by Ziopharm

Is there a mandate or not?  I'm guessing that a lot of ZIOP shareholders are under the impression that there is.  Ziopharm has quite the footprint in social media.  At InvestorVillage the ZIOP thread is pretty much always the most active board.  On stocktwits the ZIOP stream has over 4,000 IDs watching it.  And on Yahoo's board for ZIOP, this story that UTIMCO had no choice but to sell is accepted as fact, just as it is on all the other social media sites I've looked into.

Just like with Maxwell House and Fox News....I bet if you asked most ZIOP shareholders why UTIMCO sold they'd answer:  "Oh, they had to sell...its part of their mandate", based on what they've seen on social media.

My own research on the matter led me to this:

https://www.utimco.org/scripts/internet/fundsdetail.asp?fnd=4

And to this:

• Equity outperforms fixed income over the long term, therefore we have an “equity orientation”, while recognizing that during certain periods fixed income can present attractive risk-adjusted returns; ( https://www.utimco.org/funds/allfunds/2015annual/pdfs/2015_UTIMCO_Annual_Report%20-%20Printable%20-%20Low-Res.pdf )

I find it hard to reconcile an organization with an "equity orientation" divesting equities unless it had reason to believe that it was a good time to sell, not because of some "mandate", that I'm unable to find information on anywhere except via second hand sources on social media sites with no attribution and links.

Now....could I be wrong?  Absolutely, if someone could provide a link to information about this charter that mandates stocks like ZIOP must be disposed of, then I will be happy to acknowledge having been mistaken.

David Deak, LAC's new CTO working at Tesla?

Lithium Americas put out news this morning (Monday May 2, 2016) about a new executive hire.

(LINK TO NEWS)

The PR is to announce the appointment of David Deak.  Here's what it says in part:

• VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 2, 2016) - Lithium Americas Corp. (the "Company" or "LAC") (LAC.TO)(LACDF) is pleased to announce that Dr. David S. Deak has joined the Company as Chief Technical Officer ("CTO") and Senior Vice President, and President of its subsidiary Lithium Nevada Corp. ("LNC"). Dr. Deak holds a D.Phil. in Materials Science from Oxford University and is well-known within the lithium and battery materials industry. He has diverse experience, predominantly in technology development and commercial roles. Most recently, he led strategic development projects focused on battery manufacturing and supply chain activities, including lithium supply.

When a "material event" takes place public companies are required to notify the markets, and a key executive hire certainly qualifies in my opinion.  But sometimes what isn't said is just as important (or maybe more important) than what is said.

If you research David Deak you'll find a LinkedIn profile detailing an individual by that name who has "DPhil Materials Science from Oxford", same same as referenced in Lithium America's PR.  And with the same educational background as mentioned in today's news.  I'm convinced, for obvious reasons, that the David Deak referenced in Lithium Americas news release, that he is the same David Deak attached to this LinkedIn profile:

• Senior Development Engineer

Tesla Motors Inc.

2014 – Present (2 years)Palo Alto CA

Managing strategic and technical projects focused on:
- battery manufacturing, including cell component engineering and development
- analysis of upstream processing of raw materials, from mine to Gigafactory

- supply chain development, from supplier engagement and selection, to contract negotiations 

https://www.linkedin.com/in/david-deak-2900521

But what the PR doesn't say is that David Deak lists Tesla as his current employer on LinkedIn.

Avoidthebag has tweeted David Deak asking him if he is now working at both Tesla and Lithium Americas.  I will post a comment if he tweets back.

Please read the disclaimer at the bottom of this page.  I am a shareholder in LAC, and in fact added to my position during trading today (Monday May 2, 2016), so my opinions are not without bias.

Why buying low and selling high is so hard for retail investors - More reasons I write this blog

When it comes to the public markets retail investors are lambs among wolves, gnus running with lions.  We are the main course on the menu when big market players sit down to dine. 

The retail crowd is constantly being bombarded by information that is ultimately worthless, fundamental data.  

Check the earnings, look at the revenue, don't forget debt, watch out for dilution, read the filings. The mountain of information is overwhelming.  Insider and executive profiles, analyst forecasts, sales, book value,   Its almost endless, if someone took the time to pour over every single piece of data available, by the time they finished...Three more months of reading material would have piled up and would be waiting.

And I'm going to argue that the only way fundamental information matters is in its potential to influence buying and selling decisions.  And even then it depends on what the big boys do.

Retail players need to be aware of what they're up against, the money that's in play.  You have thousands?  Tens of thousands?  Maybe even a few hundred thousand?  Its peanuts.  There are bigger fish lurking in the oceans that are the public markets, sharks and killer whales with hundreds of millions, even billions.

Think of it in terms of Texas Hold 'Em.  Even when you've been dealt good cards, your stack is chicken feed compared to what the big boys are playing with.  Their stacks are so big you can't even see who you're playing.  

What am I talking about?  Listen to famous and infamous Jim Cramer in an early interview talking about the stratagems used by the market whales, hedge funds.

You can be long on a quality stock, one with positive earnings that might even be paying a dividend. A company with a business that is growing month over month, quarter over quarter, year over year. But maybe there's a big player looking to accumulate a large position who will raid the stock, borrow all that's available and start selling it short, using multiple brokers to create the impression of a broad based sell off.  As noted by Cramer in the linked 2006 interview, some writers and talking heads might even start talking it down.  

I can hear some saying...."I don't buy on margin, they can't borrow my shares"  Or, "I have Level II, I can see what's happening".  

A company with outstanding shares of 100 million or more, even if some investors don't have shares available to be borrowed for shorting purposes, there are plenty others who do.  And level II is no panacea, don't be fooled, not with the ability of big players to use Iceberg orders.  "Iceberg orders"??? "What the hell are iceberg orders"???

Iceberg Orders

Just as with an iceberg where only a small portion is visible above the water, so too with an iceberg order where only a fraction of the actual shares available to be bought or sold can be seen.  Let's say there's a big player looking to dump 1,000 lots of some high flying stock trading at say $10, that's 100,000 shares worth $1,000,000 at $10.  Rather than displaying all the shares he's looking to dump the big fish will only show a fraction, maybe 50 of the 1,000 lots.  The remaining 950 are still there, but they're below the water and retailers looking at their Level-II depth won't see it.

Think this is new stuff?  That these are games that have come along in our internet age.  This kind of market activity has been going on for decades, manipulation has been around since the first merchant started putting his thumb on the scale.  In 1937 Richard Wyckoff detailed the way big players are able to prey on smaller fish.  Here's a link to an article on what I'm talking about:

http://www.businessinsider.com/the-richard-wyckoff-stock-trading-method-2013-2

And here's an excerpt from the above linked article:

It takes a while for a pro to accumulate a position in advance of a big move – buying too many shares at once would cause the price to rise too quickly.

"The preparation of an important move in the market takes a considerable time. A large operator or investor acting singly cannot often, in a single day's session, buy 25,000 to 100,000 shares of stock without putting the price up too much. Instead, he takes days, weeks or months in which to accumulate his line in one or many stocks."

Instead, here's how he sets it up: first, he'll "shake out" the little guys by forcing the stock lower in order to get a better price.

"He prefers to do this while the market is weak, dull, inactive and depressed. To the extent that they are able, he, and the other interests with whom he works, bring about the very conditions which are most favorable for accumulation of stocks at low prices...

"When he wishes to accumulate a line, he raids the market for that stock, makes it look very weak, and gives it the appearance of heavy liquidation by sending in selling orders through a great number of brokers."

"When he wishes to accumulate a line, he raids the market for that stock, makes it look very weak, and gives it the appearance of heavy liquidation by sending in selling orders through a great number of brokers."

Still want to play?  And is it possible for a retail player to still win?  Yes, but it isn't easy.  

If you want to play and win at this game then you have to know the golden rule.  No, not the one Jesus talked about, doing unto others as you would have them do unto you.  No, its the more cynical version:  He who has the gold makes the rules.

This is a game dominated by big players, and its a zero sum game as I keep repeating.  Some players end up with cash, the others with shares.  Nobody is going to win every time, play the markets long enough and you're gonna take some lumps.  

For my own part I look for stocks that are either out of favor or below the radar.  I keep a close watch for too much promotion and hype, and I rely heavily on technical analysis.  But no method, no matter how effective, is going to work 100% of the time....it can't.  A market requires buyers and sellers, everyone can't be buying and selling at the same times.  

Bottom line, the small retail player has to try and by in sync with the big market players, as much as she or he is able.  And don't worry if you miss buying the bottom, or if you get out too early and miss selling the highs.  As my late great Father told me many times:  "You'll never go broke by taking profits".

For those wanting a spoiler on my next blog posting, its going to be about Ziopharm which trades under the symbol ZIOP.  I think the trading of ZIOP over the past 2 years offers up a prime example of why and how retail investors sell low and buy high, while the big market players do the opposite.

Peace Out.

The Lure of Clean Energy (Eguana Technologies)

Eugena Technologies is a development stage company involved in the design and manufacture of energy storage systems for both the residential and commercial markets  The company is involved in a multi year agreement with Korean giant LG Chem to deliver an AC battery for the North American residential market.  (NEWS STORY).  Their Eguana AC battery is a grid ready Lithium-Ion storage system, with news just released about a third order from partner E-Gear (NEWS STORY).

Penny stocks are dangerous things, they're the ultimate risk/reward play, with the potential for both incredible gains and for massive losses.  When it comes to penny stocks there is one thing I consider to be absolutely essential, you have to get in early before the herd shows up.

Often you will see a stock trading for pennies, nickels and dimes when volumes are light, go to $1+ as volumes soar into the millions for a sustained period.  The herd storms in thinking $1 or $2 is still cheap.  Then all too often the bag closes, the smart money escapes with cash and the dumb money retail crowd is left holding shares, aka the dirty bag.

"Green Energy" is all the rage right now.  Energy is nothing new, but the world is changing.  We're going from a long period of dirty energy, and entering into a time of transition with the world, (certainly the developed world) throwing all kinds of money at clean energy projects: Wind mills, solar panels, electronic vehicles and lithium batteries for storage being just a few examples.

And as often happens with new technologies and paradigms, many of the companies with the greatest potential qualify as penny stocks.

I was fortunate to get into some junior Li miners when things were quiet.  Now though, some of those thinly traded stocks are seeing volumes in the millions.   Retail investors, listening to paid promotional outfits are being whipped into a buying frenzy.

You may have heard the expression:  If you want to taste the fruit, you have to go out on a limb.

I think there's a lot of validity to that old bromide.  But I would add to it by saying:  When the herd moves out on the limb, the branch often snaps.

One thing I want to make perfectly clear, development stage companies often pay promotional outfits to garner attention and investment, it comes with the territory.  For me its a question of degree, and I keep a close eye on volumes as a barometer to gauge when the retail herd is storming in.  Also its important to remember that all volume isn't created equal.  1 million shares trading at 10 cents is not the same as 1 million shares trading at $1+.  There's a lot more cash changing hands at a buck.

That's a lot of preamble I know, but I'm older and tend to be long winded.

Eguana Technologies is a battery storage company that came onto my radar last Thursday, and after spending a few hours researching it I took out a position on Friday.  In doing my Due Diligence (DD) I had my cynic's cap on, expecting it to be just another penny stock hype job.  However the only promotional outfit I found was some site called MidasLetter.com that did an "interview" with Eguana's CEO in November of 2015.

Here's the link: Midas Letter Interview

In checking the trading though there wasn't a big surge in volume after that interview came out.  In fact there were many days after that date where (according to Yahoo Finance) volumes were less than 100,000, which I like to see.  As I mentioned before, some promotion is to be expected with development stage companies, so long as it doesn't cause a big jump in both the PPS and in volumes trading I'll keep doing my research.

Before even checking for promotion and hype I usually look at the chart, and the chart for EGT.V to me looks incredibly promising.  Had I seen a stock that had already climbed 500% or more I would have stopped right there. But it looks to me like EGT.V has plenty of upside potential left.

The PPS moved above the 50 day moving average in early March and soon after moved over the 200 dma.  There was also a Golden Cross at the beginning of April when the 50 dma crossed over the 200, a technical event often considered very bullish.  One note on the Golden Cross though, some TA aficionados do not consider a Golden Cross to be truly Golden unless the 200 dma is climbing.  For my own part I consider both to be bullish, but more bullish if the 200 is also on the rise.

Also take note the large volume spikes on days the PPS climbed (colored green).  I view that as another bullish indication, I like seeing the PPS climbing on big volume days and pulling back on lower volume.   Retail investors tend to focus on price, but I consider a climb of 2 cents on volume of 1 million to be more significant than a drop of 10 cents on volume of just 50,000 shares.

Okay, I can just hear all of my readers right now (both of them) "ENOUGH, ALREADY...WHAT ABOUT THE FUNDAMENTALS"?!?!?

Before I get into the fundamentals I want to point out that I already consider them priced in. Fundamental data is always old information, weeks if not months old.  I did not risk money on EGT.V based on what they've done in the past, but rather on the potential for what they may do in the future.

With a stock trading in and around 15 cents I wasn't expecting much.  But I actually came away a bit surprised.

Market Cap      23.5 Million CDN

Shares Issued   167,778,702 (as of April 15th 2016)

To read the company's filings you can go to Sedar.com, here is a link to their Management Discussion & Analysis for the 3 months ending December 31st 2015.  Take note of the debt situation (they paid off their LOC) and existing sales.

Sedar Filing MD&A

They have the "going concern" tag you typically see with stocks trading at this level.  However financing news for $1.2 million came out recently, and it appears to me the company is well capitalized going forward.

(FINANCING NEWS)

I'm going to end this blog entry here with one last fundamental metric I consider to be important, that of short interest.  I used to view Short Sellers as an enemy to be defeated, but not any more.  Short Selling is an incredibly risky proposition, especially with a penny stock.  If bears have raided a stock, I assume they have a very good reason.  Sometimes though I believe short selling is done for manipulative reasons by those looking to scare retailers into selling low by injecting some fear into the market.

Short interest for EGT as of April 15th was just 7,900 shares...less than one hundredth of one percent. However back at the end of January of this year that number got up over 2 million, still only 1.4% of the issued, but regardless a fair sized number.  It looks to me like that little bear raid may have been an effort by some looking to accumulate, and its something I think may happen again if the PPS continues on this up trend, which is what I am hopeful of, and in fact expecting.

Comments are always welcomed, just no profanity please.  And please read the disclaimer at the very bottom part of this blog.

An ode to my Late Great Father -And the reason I write this blog....

We lost my father to cancer three years ago, and like many children with a parent who has gone to a greater reward, I can still hear his voice talking to me when I remember him.  He was, (and for me still is) a remarkable man.

He was born during the depression in a mining town in northern Ontario Canada. His mother was a gorgeous woman with a big heart, but not much in the way of an education.  His father was a jack of all trades, an avid angler and a semi-professional baseball player who pitched two no hitters in the old Northern Ontario Semi Professional baseball league.  Although he never found out for sure, my Dad suspected that he might have been what was once called a "love child", the result of a romantic fling after his mother perhaps went to one of my grandfather's games.

Who would think that from such humble beginnings my Dad would go on to work on both Wall and Bay Streets in the 1960s and 70s.

But those beginnings I believe shaped my father's character.  He treated everyone with kindness and respect, no matter whether he was dealing with someone who was unemployed or the CEO of a major corporation.

My father's parents divorced when he was only 6 or 7 years of age, and later his mother remarried.  I said she was a gorgeous woman, and her charms attracted a former officer in the Canadian military, one who was educated and taught my father how to behave in polite society.  My step grandfather was no Saint however, among his vices were drink, women and gambling.  A university education is nice, but it doesn't say anything about a person's moral being.

But my Dad was always grateful to his step father.  He moved the family from that northern mining town to a big city.  My Dad's stepfather was educated and well read with the letters CPA after his name.  It is because of this man that my father grew up to be comfortable in a higher strata of society. Dad was convinced that had the family stayed where they were that he would have ended up working underground.

But my father did not forget his more humble roots.  He always treated everyone, regardless of their income, education or social status, the way he wanted to be treated.  

I won't go into detail about everything he accomplished, but there is one story that I will always remember, it was told to me by my mother sometime after my Dad had retired.  My parents would go down to Florida to escape Canada's winters, and one year they made a stopover in New York, where my father had worked for a Canadian financial institution starting in the sixties.  

While in NY he had managed the bond desk for his employer.  Going back to NYC sometime around 1999 my Dad decided to go visit the building he used to work at in the Wall Street district.  It no longer housed the firm he had worked for, and he noticed that the large brass doors were badly tarnished.

He poked his head in the door and peered around.  A security guard, who looked to be in his seventies according to my Mom said something like:  "Can I help you"?  My father explained that he used to work in that same building many years before and he was just taking a gander.  My mom said the old security guard scrutinized my father and then his face lit up as he said:  "Mr. MyDad'sName"????

It turned out this was the same security guard who had worked at the building during my Dad's time, My Dad remembered his name as well.  To make a long story short my Mom and Dad were given a guided tour of the building.

My Mom told me why that guy remembered my Dad's name.  "Your father made a point of knowing everyone's name, it didn't matter if they were the president of the company or the janitor".

He was a helluva a man.  

Year's later he was pushed aside, given a job he didn't want, managing a new local branch of a bank in the Pacific Northwest of the United States.  Regardless he endeavored to make it a successful launch. His branch was right on the street that divided the city between black and white, so my Dad made a point of hiring staff who reflected the community in which the business was located.

When it came time for the official opening some senior execs flew in from Toronto.  My Dad and Mom met with them in our family room, sitting around the bar, I was sent to my room down the hall. Up to that point in my life I had never heard my father swear, except perhaps for the word ass.  I soon got the Full Monty.  It wasn't until years later that I found out what happened, again with my Mother telling the tale.

Sitting around the bar in the family room of our house my Dad was asked what he was planning to do for the grand opening.  His answer...."Nothing special, the usual coffee and donuts".  One of the guys from Toronto then said:  "In that area???  Are you nuts???  You'll have every coon in the neighborhood in there".  

As my Mother later told me, and my Father reluctantly confirmed, Dad lost it.  Along with a profanity laced tirade Dad said he'd kick their Effing Asses all the way back to Toronto if they told him how to run his branch. 

Within a year he resigned.  If he hadn't had a wife and three kids to support I suspect he would have quit that very day.  We moved back to Canada and the rest is just prologue.

Which brings me to the reason I write this blog.  When it comes to stocks and investments, retail investors are harp seals swimming in waters infested with killer whales.   And the industry players who infest social media sites have no respect for retail investors, their only aim is to make money for themselves.  

Companies that have little to no value get pumped and promoted, with IR firms and other promotional outfits being paid to bring the retail herd into the slaughter house.  Analysts who work for Investment banks tout investment in companies when their firm is underwriting secondary offerings.  The rich get richer and too many retail investors get lured into stocks that are being sold high by the very people who are telling the retail crowd that they're buying low.

One point I wish to make abundantly clear.  I am no expert, but I will express honest opinions.  I will not write bullish opinion about a stock that I am selling, nor will I trash a company when I am buying it's shares.  That's not treating people with respect, and its not what my Dad taught me.

If you continue visiting this blog you'll see me referencing my Father on occasion and sharing some of the things he taught me.  One of his favorite bromides, especially with speculative stocks, is that "you'll never go broke taking profits" another was "don't marry a stock".

Peace out....

Lessons for Lithium Players in Medical Marijuana Scams

A couple of years ago there was an explosion of companies touting themselves in the Medical Marijuana space as investors stormed in, hopeful of getting rich by investing in Wacky Tabacky stocks.

Those doing the same now with Jr. Lithium miners would do well to learn the lessons taught by some of the scams that came out of the Pot Bubble.  Here is a linked article dealing with charges brought against promoters of a pump and dump scheme involving two companies from last year, PHOT and HEMP, both traded on the OTC market in the US.

SEC Settles Charges in 2014 Marijuana Stock Scam

Of course there are tons of other examples where MJ stocks soared and then tanked that didn't break any laws  As far as I'm aware there are not statutes against taking advantage of stupidity combined with greed.  And with carefully worded news and promotional stories it is possible to spur interest in a stock without running afoul of the law.

In the case of companies promoting themselves as Marijuana plays, news items and toutsheets could herald the liberalization of marijuana laws and talk about the fact that "mary jane" is projected to be a multi billion dollar industry.  It pays to have a firm handle on hyperbole, because at times like these hyperbole runs rampant. 

For those unfamiliar with the word hyperbole, I define it as meaningless words meant to sound meaningful.  Here's an example of how I see hyperbole being used now with Jr. Lithium miners.

• Dewey Cheatham & Howe Minerals is pleased to announce that we have just acquired a claim of over 500 acres in the same area as Existing Lithium Mining.  This claim has the same topographical and geological makeup as that of Existing Lithium Mining and we are excited to have made this acquisition with the aim of advancing our Lithium Mining Project.  CEO I. Cheatham stated: "We firmly believe that with demand for Lithium exploding that we are uniquely positioned to monetize our Lithium Project.  Prices for Lithium have more than doubled in just the past year.  And with Tesla and other EV companies ramping up production the global Lithium market is forecast to be approaching $2 trillion dollars by 2020".  

If you've been following Jr Lithium companies and reading their press releases that might sound just a little familiar.  And there's nothing wrong with it, Lithium spot prices have more than doubled recently, and the global market for Lithium is forecast to be nearly $2 trillion by 2020.  That doesn't mean that this fictional Jr Lithium miner will see even one tenth of one percentage point of it.  But the goal of PRs of this sort is to get potential investors to buy stock.  

What does the overall world Lithium Market have to do with a Jr Miner that doesn't even have a single permit in place?  And that's to say nothing of all the other steps, (environmental assessments, financing, evaluation of provable and probable resources, etc) that need to be taken, steps that take years to complete.

I am confident in predicting that of the dozens of Jr. Lithium miners now popping up, that only a small handful will ever make it to production. So here are some guidelines on what to possibly look for in my opinion.

1. Many of these companies are listed on Canada's Venture Exchange, which has a well earned reputation for being the wild west of the investment world, and a favored listing for poorly capitalized and barely surviving Jr Mining Companies.  Here's an article in Canada's National Post newspaper on over 900 alleged "Zombie Companies".  (LINKED ARTICLE)  Canada's main index is the TMX and is the senior exchange.  If you use yahoo finance a TMX listed stock has .TO after the symbol, Venture listed stocks end with .V
2. Check the share structure to see how many shares are already issued.  Many of these companies have been around for a long time and already have 50 or even 100+ million shares issued and little or zero revenue.
3. Check to see if there are any promotional outfits hyping them and read the disclaimers, Youtube is a good place to look as many Investor Relationship companies do videos now.
4. Read any PRs and company filings carefully taking particular note of forward looking language like "we expect, anticipate, forecast" etc.

I'm not listing any company names here but here are two linked articles which list a number of Jr. Miners.  The first is from a site called nanalyze that lists 19 Juniors, all with market caps of at least $5 milllion: 19 Lithium Junior Mining Stocks

The second is from a Seeking Alpha writer: The Junior Lithium Miners 

DISCLAIMER

This is strictly an opinion piece, and my opinion could very well turn out to be wrong. This instablog post is intended strictly for informational and entertainment purposes and should not be used as a basis for any investment decisions. Investing in stocks or options involves significant risks. For investment advice you should seek the input of a professional investment advisor.

Lithium Americas - Cup and Handle Forming (LAC.TO or LACDF)

Even if you know next to nothing about Technical Analysis and chart patterns you've probably heard of a cup and handle pattern before.  While no chart pattern or technical indicator is right 100% of the time, certain patterns like the cup and handle become well known because of their overall success in predicting price moves.

Here is the chart for LAC.TO

The left hand side of the cup formed after the spike up around $1 in May of 2015, with the drop and rise forming first the base of the cup and then the right hand side.  After getting up around $1.00 again this April the PPS has slid all the way back to in around 75 cents as I write this.

This pull back I believe will prove to be the handle of the cup and handle pattern.  If the pattern plays out as I am expecting I think we will see a breakout similar to what happened in late March when the PPS pulled back down in and around 45 cents before running up to $1 in April.  I also consider it very possible that LAC could trade as low as 65 cents if this pattern plays out.

Do note that I have a long position in LAC.TO and so my opinion is not without bias.  There is something called ''confirmation bias'' where someone loses perspective because of a preconceived idea or opinion.  Also note that my opinion can change, and I may sell some or all of my shares if my opinion changes from bullish to bearish.

The most likely reason that my bullish opinion could change on Lithium Americas is if I were to find them paying promotional outfits with volumes going to 20+ million on a daily basis.

Comments are always welcomed, all I ask is that rules of common courtesy and respect be followed.

DISCLAIMER

This is strictly an opinion piece, and my opinion could very well turn out to be wrong. This blog post is intended strictly for informational and entertainment purposes and should not be used as a basis for any investment decisions. Avoidthebag.com is not a registered broker or investment adviser.  Investing in stocks or options involves significant risks. For investment advice you should seek the input of a professional investment adviser.