The Evil Diaries: “I am a glutton for punishment”

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The Evil Diaries: “I am a glutton for punishment”

I am a glutton for punishment when it comes to resource stocks. So when a voice comes on this morning pointing me in the direction of Berkeley Energy (BKY), putative uranium producer, chaired by my neighbour Paul Atherley, I am drawn as a moth to a candle.

However, the RNS is explicit in advising that “The project now has a Net Present Value of US$871.3 million (GBP580.9 million) with an internal rate of return of 93% based on a discount rate of 8% and a long term uranium price of US$65 per pound. This valuation represents around GBP3.22 per share on an undiluted and unfinanced basis compared with the current share price of around GBP0.22 per share.” (The 22p refers to this morning’s opening price.)

So, if one believes the 322p figure, one buys. That is true even if, as one must suspect, a placing is on the way.

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Victoria plc (VCP) remains on my short list. The trouble is that it is nigh on impossible or perhaps flatly impossible to borrow any stock. Once this consumer boom breaks there’ll be an awful lot of carpets to sell, I presume.

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Finally, I understand that Italy raised E3.5bn at a negative rate of interest yesterday. I might just understand such a subscription if the lucky recipient were Germany. But Italy! Cooer. This is surely proof of investors’ desperation to find any port in a storm. Many would reasonably conclude a bearish outlook.

 

Evil will be speaking at the Master Investor Show 2016. For more details and free tickets, click here.

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