That’s a mindful to consider – The market might be topping, and we are sharing with you our best idea in the Nano-cap, illiquid stock area. It tells you we would consider trading the S&P 500 from the short-side for a market trading play, but we’d are just fine buying an illiquid Nano-cap company based on its company fundamentals. Perhaps because of “the Market-S&P,” and the “Industry Nano-cap,” are not necessarily correlated. We could see one rally and the other decline. It also tells you; we are not afraid of the Nano-cap going out of business if the market goes into panic mode. We would buy more of the Nano-cap.
S&P 500 (SPY)
“The Market” had a great rally over the past couple of weeks. The market is now at a key resistance point. It is natural to expect the market to retrace back to its 50-day moving average
A tech rally along with strong energy prices helped the S&P rally back to resistance. It has been helpful that Russia appears to be losing its ability to make progress in its battle with Ukraine. We don’t know if Russia will escalate or back off. We should know very soon – one to two weeks. That could give the market a celebratory punch to the upside but in our mind that is currently in the market. Therefore, a chance to sell into the S&P 500. Oil stocks would likely sell off with a peace deal. So too gold and silver. Tech and growth would likely rally but there are headwinds for them to run into. Namely higher interest rates. At best we’d be neutral on “The Market.” The 150-day and 200-day (not shown) are still a resistance area as are previous support and resistance levels of the past coming together at the current price.
One of our favorite Nano-cap companies, (we have a number) is GoldSpot Discoveries (SPOFF)* $0.57.
GoldSpot was added to the LOTM: Ten Under $10 for the Double on February 16, 2022.
We like Nano-cap companies as “the Lottery Ticket” play in a portfolio. The profile of a Nano-cap Lottery Ticket is that of a tiny company with big ambitions that is solid financially and has a clear vision of its path to being a much bigger company. Because of balance sheet assets, positive cash flow with no or little debt, our lottery ticket is a “non-expiring” lottery ticket. Things could change, but it is not a very high probability they will. In the case of GoldSpot, our long term goal is a return of 5X to 20X on our investment. We believe a double in one year is possible but to get the 5X to 20X returns, it is likely a five to ten year project.
Technically, GoldSpot is in a modest basing pattern. It is too soon to say there will not be another leg down but there is a big-enough basing pattern for those who want to accumulate to begin to do so. In related accounts, I have been nibbling at buying shares and have noticed there are others nibbling (bigger than me) at the shares. Notice two things in what I said above. For a 5X to 20X return, I am anticipating a five year or longer hold. Many of you will be put off by the time-line. Now look at the price range in the last twelve months. Twice in the past twelve-months, the price was above $1.00. The macro view for Precious Metals is very good. Remember I said take half your money off the table when you double. So, getting your money back could happen in twelve to eighteen months. No one knows that for sure, but you don’t know that you could not get your money back in a year to eighteen months either.
So, “The Story” and why we want to own GoldSpot.
What they do? GoldSpot is an Artificial Intelligence (AI) and Machine Learning (ML) company for the exploration of minerals and metals. They also do high altitude (airplane) magnetic imaging on acreage to identify the highest probability (read concentration) of various metals and minerals. You can assume GoldSpot does their work for more than gold prospects. Multiple metals and minerals.
What is Unique about GoldSpot? GoldSpot, in most situations, charges enough in cash to cover their expenses and takes the balance of payment in equity, warrants, options, royalty or revenue share. They are consistently getting ownership or participation rights at prices you and I can only dream of getting. They also might help finance exploration cost with their own money.
They have a contact list of wealthy people in the mining industry who are a phone call away from joining them in privately financing the better prospects. One such person is Eric Sprott, one of the ten wealthiest people in Canada and a mining magnate. Eric Sprott is a 17.75% direct owner of GoldSpot. Also, owners that are well known in the mining industry, Rob McEwen, co-founder of Goldcorp Corp, now merged into Newmont Goldcorp. Newmont is the world’s largest gold miner. Palisades Goldcorp is a 13.14% direct owner of GoldSpot. Palisades Goldcorp is Canada’s largest resource-focused merchant bank.
The purpose of GoldSpot is to help exploration miners identify the location of the highest concentrations of minerals on their claims and receive as sweat equity, participation in that claim.
Two features to pull from above.
One: You and I will never get closer to so many high value prospects at such an attractive entry price, as being an owner of GoldSpot.
Two: In looking at the owners of GoldSpot, the current assets and balance sheet, the risk of GoldSpot going out of business is zero to none. See Link to company presentation Dated March 1, 2022.
As a kicker, GoldSpot is a tiny AI / ML company, with no big company competition, that is rolling up the mining AI/ML industry, under its umbrella.
If you believe as we do, that the current decade is the decade of commodities we feel this is a very attractive company to have as a core position.
Accounts related LOTM cost in GoldSpot is the current market price of $0.57. Shares were purchased as recently as last week. Make no mistake. Anyone other than me, will consider GoldSpot a highly speculative investment. We are very comfortable in our homework and consider GoldSpot a core holding in accounts related to LOTM.
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* An account related to LOTM holds a position in this security.
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