Having sold out of quite a few positions in October, we held onto pretty much everything in November except for closing our short on NIVIDIA. Health Equity was close to being sold as we moved into December. The market remains a very difficult one to judge tactically as traders remain very jumpy about any macroeconomic news, especially any numbers coming out of the US and China. These seemed primed to affect sentiment in November.
We added Tesla as a short trade in November. Our thesis for Tesla [NASDAQ:TSLA] remains the same - it is currently in the process of conceding its first mover advantage to other EV manufacturers, and in our view the share price does not reflect the fundamentals of the company. It is being supported by a large 'fan boy' base of investors, but really, can it sustain this for much longer? We shorted the stock at $190 on 18 November. It tried to rally later in the month (up at around $194 at the end of November) but did not endanger our risk limits. At time of writing it is currently trading at $162 leaving the trade well in the money.
Brent crude oil
We noticed some major dynamics coming into play in mid-November which warranted the addition of a short trade on Brent crude. High oil prices have been a big feature of 1H 2022, but the dynamics seem to have shifted considerably. The world energy market is adjusting to the conflict in Ukraine and new sources of oil look set to come online in 2023 (e.g. we note progress in US talks with Venezuela). The other big issue seems to be the ongoing problems with China's economy, where the zero-tolerance Covid policy continued to hit the country's industrial sector. We entered the trade short at $92.58 using the February 2023 futures contract (ICE)) as our benchmark. Our +6.06% gain would obviously be significantly magnified via a leveraged trade like a x10 CFD.
Kodiak Copper Corp
We have kept this copper explorer as a buy and hold venture stock on our portfolio for quite some time. Although we are already up 300% on our entry price, we remain positive about its prospects. We caught up briefly with CEO Claudia Tornquist at the Mines & Money conference in London in November. Shares in the copper explorer are on the move again and news of on the surface gold is also going to provide further support for the stock price. Kodiak recently completed its exploration at its large MPD site in British Columbia and says it is planning "another sizable exploration program" in 2023. It drilled 41 holes over more than 26,000 metres at its Gate/Prime and Dillard targets. Further assays are anticipated in the New Year, so watch this space.
Another big winner for us in the small cap stakes in salt miner Atlas Salt. We caught up with the management team when they visited London this autumn. Sources close to the company tell us that it is close to reporting project economics for its Great Atlantic Salt Deposit in Newfoundland. A PEA is anticipated in mid-January with a Feasibility Study to follow soon afterwards. As a homogenous deposit, with similar DNA to Goderich in southern Ontario, it is already yielding potentially industry-beating salt cores, according to Rowland Howe, President of Atlas Salt. In a sector dominated by ageing mines, almost all of which are more than half a century old, Great Atlantic is being designed to operate like a highly efficient ‘Salt Factory’ serving eastern Canada and the U.S. eastern seaboard.
Sold this month: NVIDIA Corp (closed short)
So how are are picks getting on?
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