Kick Back: The biggest stories you might have missed this week
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Welcome to your weekend. Let’s start with a big one – are you ready for Altcoin Season?
There’s a couple of ways to approach that question:
a) Literally, are you ready for Altcoin Season, having traded your BTC highs for various bags of “the next Bitcoins”? Or:
b) Are you ready to hear about whatever Altcoin Season is, if it actually exists?
Sigh. It’s both, isn’t it? Sorry, we only have room for the short version. Or c) Take me away from all this crapto talk.
It goes something like: BTC moons and cash investors get nervous – BTC gets sold down for cheap altcoins – altcoins pop all over the place – altcoin profits gets poured back into BTC – altcoins plummet again.
Rinse and repeat. Some say every four years, hence there’s talk of a “season”.
But really, it’s just a reasonably rational market move, if such a thing exists in Crypto Land. When stuff gets too expensive, we look for bargains elsewhere for a bit. But for the purposes of this post, let’s assume “Altcoin Season” is real, because this time around, it’s being opened by XRP.
That’s controversial, because XRP is also known as a “shitcoin”. Apparently, even crypto holders have their standards about what a credible digital currency looks like.
Here’s to setting the tone for the week that was.
So yeah, in January, as BTC soared to $US50k and beyond, XRP plummeted because the US Securities and Exchange Commission had had a gutful with it passing itself off as a decentralised commodity. The SEC thinks XRP is a centrally-issued security.
And here we are in April, and the SEC’s case is looking a bit wobbly. And whether or not XRP is actually a “shitcoin”, it has a circulating supply of 45,404,028,640 coins worth about $US46 billion.
That’s a lot of holders who dgaf about the technicals, pulling together in a special moment in history where it’s all about the flows, bros.
Maybe we should ask the pros. Sam Jacobs got two of the best in the business together – Alex Saunders, founder of industry news website Nugget’s News and Matt Harcourt, an analyst at Australian crypto investment firm Apollo Capital – to give us the skinny on what’s actually going on with XRP’s sudden rise.
But if you read carefully, there’s also a tacit acknowledgement, in all of this hilarious banter online about whose imaginary currency is the bestest, that they’re all on varying levels of shaky ground.
Essentially, the entire argument against buying XRP is an admission that a code-writing nerd can emerge from a few brilliant weeks in his or her basement and render your $250K worth of crypto redundant within the next hour.
“To me (the platform) is already obsolete and outdated when you look at the tech available in DeFi,” Saunders says.
“Obselete”. Ripple Labs was founded less than 10 years ago. Technology, huh?
And if you think Bitcoin isn’t susceptible, just wait till Dogeking Elon Musk gets a million monkeys to go to work on it with the cyber pliers and blowtorches:
We’ll come back around to the cryptos later. For now, regular news resumes.
Here’s something code-writing poindexters haven’t found a way to devalue in, ooh, 7000 years:
But gold did take a big hit last week. It closed down a whopping $US3 after a big hit mid-week on Tuesday on the back of strengthening US dollar.
Still, Guy le Page is a believer. And he has word that Bitcoin could be in some bother as well, with US President Joe Biden wondering about its links to a bit of the old terrorism.
Ray Dalio reckons it might even be banned.
Guy’s happy to roll with Ray and mix the BTC bad news up with The Mercenary Geologist Mickey Fulp’s call that we’re only one-third of the way through this current gold bull run.
The result this week is Le Page’s hot stock to watch. It’s a recently reinvented gold explorer with a promising stake in Arizona that’s already returned intercepts such as 3.8m at 98.9 grams per tonne (g/t) gold and 151g/t silver from 20.6m.
Or you could take your chances by sliding into Tolga Kumova’s “life-changer”.
Kumova told us about his new Canadian project Aston Minerals back in January, and how he was hunting in “elephant country”.
“Those are big targets, they could be lifechanging – if it hits, it’s going to make a difference,” he said.
This week, it hit:
That’s a spicy bonanza grade of 4,060 grams per tonne. Certainly potentially life-changing… but the market’s reaction was lukewarm.
That’s because the grade was only across a thin 0.5m interval, and it was deep – 362m down. But it’s an undeniably eyecatching start.
Everyone loves good value. But, it seems, not everyone loves oil.
The result of that is oil is good value right now – according to Morningstar. In fact, it reckons energy stocks in general are the only undervalued sector left on the ASX a year after the market rebound got under way.
Energy stocks finished 2020 some 30 per cent lower than they began the year. You could blame the Covid travel ban; you could blame the rise in ESG sentiment.
Or that time oil prices fell below zero. Lol.
There are signs of life, though. 2021 started with a 3 per cent pop in the first quarter and Morningstar analyst Mark Taylor thinks there’s more growth to come.
Starting with why energy giants Beach Energy (ASX:BPT) and Woodside (ASX:WPL) as 40 per cent below their fair value.
40 PER CENT.
And just to prove oil is on the boil, Red Sky Energy was the hottest stock on the ASX on Monday, recording a scorching RSI of 89. That’s mainly because shares skyrocketed after an evaluation of its Killanoola Southeast-1 well in South Australia identified 16 metres of net pay zones – 10 times more than what the company was expecting.
But even after identified as the possibly most overbought stock on the market right now, it still popped again this week.
It led a cohort of oil and gas plays which dominated the ASX small caps winners’ list for March.
How do we know? Because Reuben Adams pulled together the ASX small caps winners’ list for March and the #1 mover was 88 Energy (up 667%). It was joined in the top 50 by:
That’s a hat-tip to pro investor James Whelan, who just a couple of weeks ago told Stockhead he was excited about energy as a key winner in ‘the great global reopening’.
“If you don’t own Brookside (ASX:BRK) right now, then you should probably have a really good look at it,” he said.
How indispensable is kaolin? Look around you.
It’s in your paint, paper, cups, cosmetics and pharmaceuticals.
It’s not a huge market – $US4.76bn in 2019 – but there are a couple of factors moving into play that have seen it grabbing more headlines than usual lately.
For starters, the premium version of the resource has been somewhat exhausted in the US and the UK. But the main driver is the fact that your average car has about 5kg of the stuff in it.
And if it’s an EV, keep counting. When kaolin is converted into high-purity alumina (HPA), it can make lithium-ion batteries not explode so much.
That’s such a big deal, CRU Consulting reckons HPA demand could climb from 30,000 tonnes per annum in 2020 to 272,000tpa by 2028.
So is anyone mucking around with kaolin in Australia?
Here’s your weekly update on where iron ore prices are headed next:
Clearly it is a difficult science, made harder by the fact that China has certain special price-adjusting levers it can pull at any given time if it so chooses.
But we do know one thing. We know where China won’t be getting its iron ore from – the Iron Ore Company of Canada.
It’s loading facility caught fire and will be out of action for up to two months. IOC has declared force majeure on its contracts, and roughly a third of those – about 6.7 million tonnes – was headed for China.
Importantly, no one was hurt. More importantly, it gives us an excuse to run this footage from January 15 again:
— Nick Fabrio (@longhorncapital) January 15, 2021
Here’s your weekly round-up of all that’s good in iron – including a new ASX listee that’s ready to drop its first set of results any day now.
And because disasters and iron ore seem to go so well together, it was impossible to resist getting the words “Fujiwhara Effect” into a headline this week.
That’s what happens when two cyclones get close enough to each other. The two combine and make a bigger one. And right now, just off the northwest coast of WA, there are three:
But wait, wait – iron ore market expert and Magnetite Mines (ASX:MGT) director, Mark Eames is staying cool as a cucumber.
“Realistically, even with three cyclones the worst-case is 15 days [disruption] in one month and ports can catch up on any shortfall very quickly,” he said.
LNG market analysts, however, aren’t so confident.
Another week goes by and another round of sirens rings out as The Secret Broker once again triggers the NSFW alert on his computer machine.
Only this time, he’s blaming it on a dodgy email from a group of poor old dears at the bowlo who think they’ve got themselves into a bit of trouble with the law.
It started as an innocent cry for help over a few Bitcoin and Gamestop trades. It ended with far too much information about geriatric ‘Blue Hills and chill’ adventures involving a Holden stick shift.
But it turns out Agnes and the bingo ladies could not only be safe, they may have stumbled onto a stockpicking winner.
If only Will Studd Cheese was listed…
That’ll do. Have a good weekend and join us again on Monday. Go the Swans.