Fleckenstein
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Often wrong, never in doubt. – Bill Fleckenstein

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Q: Hi Fleck, hope all is well.

In the "Ask Fleck' mailbag yesterday I read this exchange re $MDXG (MiMedex):

"I know there have been some related parties trying to manipulate the shares higher which I would say *was* a risk. But it would seem that we're past that now."

"Fleck: $5 frauds are always dangerous, even as they are headed to zero."

You are spot on re how hard this kind of short is and I would caution any of your readers re getting involved and to know the risks, even with such an obvious fraud as this.

I'm saying this as a retail investor who made some money early when it dropped from the teens down below $4, then I doubled down on some puts. Ever since there it's been an endless move upwards and the shorts have been killed. Stock was up over $6 yesterday (up 10%) on essentially no news. There have been multiple days of 10-15-25% type moves on essentially no news or regurgitated stories put out by the company which have doubled the price of the stock from the $3s to over $6 over the past few months.

The company has an army of stock pumpers and since it's in some of the healthcare ETFs it has been relentlessly going up for pretty much zero reason (other than indexing I guess).

SEC gave them an extension to re-report their financials in early September and who knows what they will ever do re this situation and the restatement -- they are out to lunch and can't even police obvious market manipulation in the stock around option expiry dates (like this week for example, but other times as well). With such a small float I guess it's a pretty easy stock for insiders and their buddies to manipulate.

Cohodes and the expert shorts are winning the battle, but boy you can really get burned during all the ups and downs on the way to zero. I'd also caution reading too much in the short term from the vocal shorts on Twitter -- they may be right eventually, but there is a lot going on here and it's not for the feint of heart.

Q: Hey Bill, are you able to give us an update on the futures positioning of Gold and Silver? Thanks!

Q: "It requires strength of character in order to think and to act in opposite fashion from the crowd and also patience to wait for opportunities that may be spaced years apart."
--Ben Graham

Amen.

Q: Hi Bill,

Are there any resources you would recommend for someone trying to get a grasp on evaluating the miners and better understanding the industry dynamics. Following you has been very helpful already. Just curious.

Thank you!

Q: When does the selling of Kirkland Lake due to its removal from the GDXJ have to be completed. Is it Friday (Sept. 21), or the end of the month?

Q: Bill,
Was reading this short article in the journal today:
Triumph of the Market Pessimists
If I read what Universa is doing correctly, it appears that they buy “cheap” out of the money put options hoping to cash in on the occasional long shot winner. You have mentioned using this strategy as well. The article and Universa seem to illustrate the point that the “market” miss-prices low probability negative events. This was also, obviously, one of the main points of Taleb’s black swan book (with his involvement with Universa he may have proven the point in the real world).
My question, in your opinion, does the market systematically miss-price low probability positive events? Or is this a one-way phenomenon?

Q: Hi Bill,
Reading your website everyday, now, since I subscribed has allowed to watch for the tops as you describe. And, I thank you for that.

So, my question is, let's say for hypothesis, that if the coutries or China, if you will, agrees to dropping their tariffs and the US, agrees to drop the persuit of tariffs on them, what do you think, would be the reaction of the markets and (i.e precious metals)?

Thanks for your in depth insights.

Q: Hi Bill,

In your opinion, is the sale of the Mesquite Mine positive or negative for NGD? Positive because it improves the balance sheet with a cash injection and they focus on Rainy River more (which was supposed to be their future anyway). Or negative because they are losing a mine that contributed a lot to their top line all these years? I am aware that you have closed your position months ago.

Q: Judging by the drop in the stock price, the market seems to hate NGD's sale of its Mesquite mine. Do you believe that the sale is a bad move?

Q: Bill,

I know you are not my analyst on retainer but can you tell me a little bit on how Micron's industry works?

I admit to never studying the company (I do look at the chart sometimes) but realized from the recent report that these guys earned about $11/share in FY18.

I looked at cash flow and see that out of $17B in cash flow, $9B goes into investing (do they really need that much capex in their industry???). Is it right to look at these companies like an auto company - a cyclical where earnings spike then drop precipitously? I think I remember you explaining that before in the past.

I am curious just how a company at a PE of 5 isn't puking cash at shareholders all year long? Sorry for the naive Q - thanks for your help.

Q: The California State Legislature must be among the stupidest in the country. They just imposed a 6.5% sales tax on all out-of-state purchases, either online or through the mails to support our welfare state. Do you object? Then you must be a Dirty Yellow Communist. Next you'll be insisting there's inflation in our economy.

Ugh!

Q: Bill, Please allow me to clarify your answer on (9-14-2018) the NGD "new" CEO and the announced sale of the Mesquite Mine yesterday.

The subscriber did not mention the CEO by name, and there have been two changes recently
New Gold (NYSEMKT:NGD) names Renaud Adams as its new President and CEO effective immediately, replacing Raymond Threlkeld, a company director who stepped in and led the company since May upon the departure of Hannes Portmann.

You answered: "He is a capable CEO for sure, very good reputation."
1. I am just confirming you are referencing Renaud Adams. Is that correct?

2. NGD announced the sale of the Mesquite Mine for 158Million CASH.
Does this transaction improving their balance sheet, (but potentially reducing their sales) and the beaten down price create any interest for you to purchase NGD for a trade or a hold?

Thank you for taking the time to answer.

Q: Hey Bill,

Given the only years out of the last 18 that have had negative returns in Q4 are 2000 and 2007/2008 (and those had big cracks in the first few months of the year), combined w/ Mr. Skin's observations that there is no real selling out there, why not get long the market into year-end in a risk controlled way (either via calls or hedged w/ puts)? After all, at its core successful investing is about anticipating the behavior of others...

Q: You have mentioned Equinox Gold in the past... Do you own it? If you do what are your thoughts on the purchase from NGD. Thanks