17 years ago, I visited Delphi and was struck with prophetic powers. Here’s some of my tongue-in-cheek predictions for the next few months.
As a long-term investor, I try my best not to make investments based on the catalyst of tomorrow. I know what works — picking a position near the bottom of sentiment and then waiting for the fundamentals to win out. This is my general strategy, and it’s worked out pretty well so far.
Indeed, winners in 2023 thus far include Tekcapital, Hemogenyx, Power Metal and Golden Metal Resources. Doubtless these four have further to run, but only a few short months ago many investors in all of them were crying about the unfairness of the markets, the uselessness of management, and the waste of money that the shares were.
Of course, the tune has now changed, as it always does. It turns out that TEK’s MicroSalt IPO, in which it remains majority owner, has been a resounding success. HEMO actually does have multiple strings to its bow. POW is delivering on its promises, including in Saudi Arabia. And it turns out that GMET’s tungsten does exist, and a new class of investor clearly knows it.
Anyone could have done the research and seen these shares would rise sharply eventually. Or you know, just read it — very little of what I write in the small cap space is behind a paywall. But the point is that I don’t know WHEN the catalyst will come, just that it will.
However, as I am aware that there are many traders out there, I have decided to make a handful of fun predictions for the next few months that I have seen in my crystal ball.
These things will definitely happen, unless they don’t.
What happens next
1. Hemogenyx will have the FDA Clinical Hold for HEMO-CAR-T officially lifted within the next few days. This will propel the share above 5p.
2. First Class Metals’ Zigzag assays will be released between 26 February and 1 March. These will be exceptional, and the company will finally gain some financial optionality as a result — with the timing designed to be just before PDAC in Canada.
3. Baron Oil will have JV funding arranged for Chuditch in the first two weeks of April 2024 — and the partner will be Woodside. The share price will double, but then fall back for the remainder of the year.
4. Harland & Wolff will sell Islandmagee in the last two weeks of April 2024 for between £50 million and £100 million and have UKEF funding arranged simultaneously. The stock will hit 30p+.
5. Kodal Minerals will report an exceptional gold assay in the first week of June 2024. However, its DMS lithium plant will be delayed by three months due to ‘border delays, unforeseen plant issues, and new civils requirements.’
6. Golden Metal Resources will release an update on US grant funding applications for Pilot Mountain between 19 February and 8 March. This will be promising, but the company will indicate that it has been asked to apply for larger than normal grants, which will take several more months to come through.
7. Avacta will sign a significant commercial deal with next-door Novartis on 5 May 2024 (my birthday), which provides financial security for the company going forward.
8. Atlantic Lithium will accept an improved bid by Assore on 15 March 2024. This will be less than long term holders want but will be accepted — three bids is always the charm.
9. Newmont will acquire the remaining 30% of Havieron from Greatland Gold at a premium in July 2024. Shareholders will buy champagne en masse.
10. BioTechne will buy Cizzle at a premium in Q3 2024, having satisfied themselves about the efficacy of the test.
11. Power Metal Resources’ Uranium Energy Exploration IPO will launch between 11 March and 29 March. It will be successful and help relaunch the IPO market for London’s junior resource sector. POW will also start work on a Saudi Arabian exploratory program.
12. hVIVO will be bought out by private equity in September 2024.
13. Prospex Energy will rise to 10p at the start of May 2024 and then go on a run as the company announces an interested buyer.
14. Tekcapital will rerate to over 16p in March 2024, as the market is forced to consider the reality that its shareholding in MicroSalt is already worth more than its current market cap, and that it has interests in three other promising companies.
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The macroeconomic environment
UK CPI inflation will fall below 2% in May 2024, but will resurge to above 4% in Q3 2024 as wage increases filter through and new supply chain pressures in the Red Sea see a supply gap re-emerge. This will see the Bank of England retaining the base rate at 5.25% for most of the year but entertaining its first rate cut in Q4. The base rate will stay above 3.5% for a considerable amount of time; the days of less than 1% rates are over.
UK house prices will fall by 10% (nominal terms) in 2024.
Russia and Ukraine will sign a peace deal in late Q3 2024 as a Trump victory over Biden becomes ever more certain. Without US funding, Ukraine will be forced to make painful concessions — and Europe will pay the price for its weakness in the future.
There will be a black swan in Q2 2024 — perhaps China invades Taiwan, or another systemically important bank collapses. There has been far too little fallout from rate rises and quantitative tightening. You cannot simply whack up rates and expect no fallout from ending the era of cheap money. Silicon Valley Bank and Credit Suisse were just the start.
The AI bubble propping up the US stock market will burst. It is the dotcom bubble on steroids and at some point, soon, someone will work out that generative AI is simply not as game changing as companies market it to be.
The bottom line
As I can now see the future, the market is my oyster. These individual companies will deliver healthy returns and I have no risk whatsoever.
Apparently, analysts are omniscient. Who knew?
If this isn’t clear yet, this is not advice.
This article has been prepared for information purposes only by Charles Archer. It does not constitute advice, and no party accepts any liability for either accuracy or for investing decisions made using the information provided.
Further, it is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
