Matt Badiali – US Investors Restricted From Buying Junior Resource Stocks, Why and Does This Change?
Matt Badili, Editor of the New Energy Investor, published under Mangrove Investor joins us to share a conversation from PDAC discussing how US investors are restricted from investing in small cap junior resource stocks.
We have consistently heard about the difficulties for US investors to clear Private Placement shares and even get their brokers to buy TSX.V and even OTC listed stocks. We discuss what companies can do to open up the US market. Also if investors should note if a stock is on a US exchange when doing their due diligence. Some resource sectors, like uranium and lithium stocks have had success in the US but it takes capital and a strategy to capture the US investors attention.
Click here to visit the Mangrove Investor website to follow along with Matt’s market commentary.
PMs will be throttled until the Bitcoin philosophy is quashed.
Hi BDC. We ask a lot of the guests on our show if the proliferation of the cryptocurrencies has siphoned off potential capital flows from the precious metals.
Many feel that the speculative success of some cryptos has had a competitive effect to a degree on the PM mining stocks, but that ultimately they can both go up in tandem and that they aren’t an either/or mutually exclusive 2 groups of investors.
Based on your comment, do you believe that cryptos would need to correct hard to bring more investors into the precious metals, or that is required for the PM stocks to really surge higher?
I would think the PM mining stocks will do quite well if gold makes the move up to $2500-$3000 that many see as targets coming out of the cup & handle pattern, regardless of what the cryptos are doing. Your thoughts?
Howdy Ex. By ‘throttled’ I mean somewhat muted, playing second fiddle, with percentage relationships between Metals and Miners being less compared to the past, but still doing well.
Hard Crypto corrections have not dampened their appeal, which may have even been buoyed by the bounces. Guest Peter Eliades and Larry Pesavento discussed Bitcoin yesterday (Tuesday). Note the surprised yet tacit acceptance by these two old timers (minute 41): https://www.youtube.com/watch?v=d1rFpXTj1Zo.
Investing/trading philosophies now favor Crypto over PMs, particularly for speculators among the wired crowd. This could change with government intervention, structural problems, or something else. BDC
Thanks BDC for unpacking that additional perspective and putting a little more color around what you meant by “throttled”. Yes there does seem to be more interest from generalists in trading the cryptos and crypto miners, but as you mentioned, there are a few structural or governmental issues that could change that over time. It is interesting to see how all of these asset classes are getting traction with different segments of investors, and also where they overlap.
Today, Larry Pesavento’s guest Bob Miner discussed Bitcoin (28 minutes) and Gold (36 minutes): https://www.youtube.com/watch?v=zq-jmxvCpZk. Very bullish on both.
Great discussion. Many great points highlighting the irrationality and unfairness of US investors trying to invest in Cdn Jrs. This needs to change for the benefit of the sector and investors.
Thanks SJ. Yes, it was an interesting discussion with Matt regarding some of challenges to US investors trying to investing in Canadian or Australian mining stocks. Hoping to see more companies of a certain marketcap size consider getting dual listed on the larger NYSE or Nasdaq markets to access the greater pool of investment capital. As for the Over The Counter stocks, I do think the exchanges have worked to make the OTCQX and OTCQB more trusted, but there is still a huge stigma to overcome with regards to OTC stocks, and still many trading platforms that don’t give their investors access to them.
At least with the Interactive Brokers platform, US investors can buy the Canadian or Australian or London stocks directly. I wanted to mention that in interview, but didn’t want it to sound like a commercial for Interactive Brokers. I believe there are a few other platforms that will allow investors to buy directly too, but the fees are quite onerous from what I’ve heard.
As far as the private placements, it is still very unfair to US investors, but much of that is the undue amount of regulatory procedures that brokerage firms are required to do. By the time US investors get done with it all 4-5 months later they are at a severe disadvantage to Canadian investors that have long since stripped their warrant and sold the stock, and often get stuck as the bagholders.
Hi Ex, how do you buy Canadian Mining stocks do you use Interactive Brokers, and how are the fees structured for American investors? DT
Hi DT. I use both Schwab and Interactive Brokers. I had the lion’s share in my TD Ameritrade account, but they were acquired by Schwab the end of last year, and it took well into this year to figure out how everything switched over, as not all the cost basises matched up, and some companies took a while to transfer over, and some of the pending spincos did as well. A lot of the more intense trading I do is on on dual-listed big board gold, silver, copper, uranium, companies or ETFs and so there are no service fees at all with Schwab for those. With the OTCQX or OTCQB stocks Schwab does an adequate job.
Schwab seems to struggle more with pink sheet and grey sheet OTC stocks though, and those have such poor liquidity, that I consider just buying the primary foreign tickers on those through Interactive Brokers. Also customer service reps just seem clueless on OTC stocks in general and always mention how risky they are… even if the companies have hundreds of millions or billions in market cap, because again these reps don’t encounter them much. It ties into the discussion had with Matt above in the interview, where there is a huge bias to steer US investors away from OTC stocks in general.
So, if there isn’t enough liquidity in the OTC stocks or if I just want to buy the main ticker directly on the Canadian or London or Australian exchanges then I use Interactive Brokers. Their fees are based on percentage amounts, and they do the currency exchanges for investors, but overall they seem very good compared to most other trading platforms for fees, and way less than placing trades directly through a broker like Sprott, Haywood, or Canaccord. I don’t have the rates off the top of my head, but when looking at the rates tables in the past I felt good about just going with Interactive Brokers on those trades in primary tickers. I believe Canadian investors could also likely use them to buy US or Aussie stocks as well, if they don’t have access to them in their accounts but am not 100% on that so you’d need to call them to check.
Santacruz not quite overbought yet.
KTN, IPT and SCZ all up over 10% today so far…
+10
IPT was briefly up 16% today but finished up 11% while delivering a breakout and the best close of ’24.
https://stockcharts.com/h-sc/ui?s=IPT.V&p=D&yr=1&mn=0&dy=11&id=p10779683782&a=1629403959
Nice!
Silver not quite overbought yet…
Under the circumstances I’m guessing a 70 rsi will bring more buying than selling.
Rick Rule: Gold Stock Bull Market Building; Now Watching Silver, PGMs, Nickel
Investing News Network – March 12, 2024
0:00 – Intro
0:25 – US economy, upcoming election
5:14 – Investor hostility to gold stocks
10:04 – When will gold stocks move?
13:42 – Rick’s goal with silver stocks
16:40 – Platinum, palladium and nickel
18:58 – Battle Bank and Rule Symposium
23:26 – Outro
https://youtu.be/OoQCZaSErug