LINQ

Last week I mentioned that I had bought LINQ Resources, an Aussie commodity investment fund. This fund invests in mostly late stage exploration and development, rather than operating mines. Many of its investments are more of a private equity type rather than stock market plays. It has a somewhat higher risk portfolio than the big cap mining companies. I think it is worth the risk:

1. It's selling for 10% - 15% below NAV. This is the good think about buying closed end funds.

2. A hedge fund that specializes in buying discounted funds like this and eliminating the discount through activism has bought a large position. This fund has an excellent record, and I expect it will be successful.

3. I'm not sure the management of the company is too savvy financially, but they do seem to know their mining. I'm hoping that the infusion of financial expertise from the hedge fund owner will lead to a better company.

3. The company still has a substantial cash position. I've noticed that private equity companies tend to go up after they manage to invest their funds.