The Stock Market vs The Real World
One of the best things regarding the whole concept of the stock market over hundreds of years, is that way that whatever happens in the real world, it will have a company or sector on it from which you can make out like a bandit. Admittedly, over recent decades the US stock market has been a rather better poster child for this concept, but the overall call remains true.
What we have also seen is that the stock market has been a great proxy for some of the greatest booms we have seen (as well as the busts of course.) Before the bubble burst in early 2001 many investors had 1 to 100 gains in dotcom stocks, and of course recently the Bitcoin Treasury brigade nearly managed this in some cases, albeit for just a few weeks.
There are those, who enjoy seeing people fail because they have failed to achieve their own goals. They are currently pointing the finger at the space and coming up with the whole “it was a bubble”, “it is overvalued”, “people are greedy/foolish.” But what this deliberate clickbait misses out on is how brilliant it was for the likes of Smarter Web (AQSE:SWC) and Coinsilium (AQSE:COIN) to capture the imagination of the stock market and allow some people to make life changing gains.
You will find that the people who say “I told you so” on the way down, are not the people who profited on the way up. They are both bitter and twisted, as well as being perfectly aware that negative articles and bad news “sells.”
The other point to note is that after overshooting to the upside, most of the BTS brigade are still up on where they started a couple of months ago, Bitcoin is over 10% since then, and at the end of the day these companies are sitting on millions more in value than they were in May.
As well as this BTS has brought strong speculative interest to the small cap area, which is well up on where it started at the beginning of the year. Indeed, with the tariff debacle boosting many mining stocks, especially rare earths, the minnows are in a much better place than last year. This is over and above the way that the UK being less hard hit on tariffs has allow the FTSE 100 to hit record highs over 9,000. An end of year target of 10,000 plus do not now seem impossible, even though we are likely to be taxed to death between now and then. Perhaps this will incentivise people to simply run their profits rather than giving Rachel Reeves CGT money? Permanently buying stocks via spreadbets seems to be the way to go, if only to deny the Exchequer extra money to burn on things that either the Government knows no one wants, or no one would ever vote for.
The Government “Getting It”
Even a cursory survey of the reaction to what the government has been doing as far as the economy and of course on immigration, underlines that hardly anyone “gets it,” something which ironically Keir Starmer said in the wake of the Runcorn by-election.
The conventional view is to laugh at Labour with its tax for growth policy. The reality is that it has only the agenda of destroying the private sector and boosting the power of the state, take away freedoms and reduce incentives. Even worse, reward failure and punish success.
In all of this Labour is doing a first class job in terms of its own well hidden goals. What most cannot believe is that it is happy to be unpopular, happy to be totally disingenuous, and even happy to be kicked out in four years, as long as its policy of national destruction can be delivered.
This includes rich people leaving, and paying for as many poor people as possible to come here as possible. The poorer the country gets, the more people, including 16 and 17 year olds (not famous for being rich), will vote Labour.
I have said the above like a broken record in recent months. But was reminded how the penny has not dropped while listening to this week’s “Lee and the IC” podcast. His Lordship is one of the majority that does not appreciate the horrors of the current lay of the land. Instead, he goes for dwelling on the minutia of boring companies, those who are actually boring enough not to require any more probing than whether they are profitable, pay a dividend and have acceptable debt levels.
By the way, it is a shame that the IC has not been able to find a somewhat younger guru to interview who is a little younger than 83 years old like Lord Lee. How great would it be to hear from a hotshot who is in their 20’s or 30’s to inspire and change the perception of the stock market for a new generation.
Stocks Rising On News:
There was a delay of 24 hours between Hamak Gold (HAMA) announcing on Thursday that it was due to receive double the value in new FAU shares it was initially due from its gold joint venture. Following on from the well received news of Dr Arthur Laffer’s arrival at the company, we are looking at a company which has moved from in an obscure backwater of the market, to one of its most inspiring new names. HAMA was up 67% on the week, and nearly 7x since the start of the year.
Another stock where people were perhaps not looking in the right direction was Surface Transforms (SCE). Here the manufacturers of carbon fibre reinforced ceramic automative brake discs, announced a trading and operational progress updated for the six months ended 30 June 2025. This consisted of a forecast of revenue for H1 2025 to be approximately £8.1m (H1 2024: £4.7m), an increase of 72%. The shares were over 70p just a few years ago, and were up 1.3p on the week. Perhaps only the parents of the management would have believed there was ever going to be a big transformation here.
Another company that has exceeded low expectations has been Pebble Beach (PEB), with the shares up 52% on the week as the “global software business specialising in playout automation and integrated channel solutions for the broadcast and streaming markets” announced that FY25 and FY 26 profitability will be “materially ahead of expectations.” Once again, it is interesting to note that on occasion companies can surprise the market on the upside, not the downside, and it is very often the case that few would have seen this coming.
For instance, we were informed of doubled revenues at Shield Therapeutics (STX), the commercial-stage pharmaceutical company specialising in iron deficiency, as it provided an unaudited Q2 2025 trading update and saw its shares rise by a third. Hemogenyx (HEMO) managed a similar rise this week, as the biotech which is apparently developing a cure for everything, announced it was to receive grant funding.
Gold explorer Artemis (ARV) also soared by nearly 50% as the gold explorer said that it has received firm commitments for a $4.75m fundraise. One wonders if the shares will do a MetalsOne (MET1), in terms of a sharp rally once a company is fully funded? Sticking with the same kind of space and share price rise, New Frontier Minerals (NFM) said its geology team has identified additional high priority targets for drill-testing at its Harts Range Project, located 140km north-east of Alice Springs in the Northern Territory, Australia.
There was a 46% jump for shares of CAP‑XX (CPX). The supercapacitor technology group enjoyed stakebuilding this week, after the previous week’s SCHURTER AG update highlighting $2 million of potential revenue to CAP-XX. A stock that obeyed the charting call during the week here at Zakstraderscafe.com was Avacta (AVCT). Here it was news of a convertible bond payment after a fundraise the previous week that for the first time in years really gave the company the look of finally being in a sustained, and sustainable turnaround. Shares of the life sciences company developing targeted oncology drugs were up 45% on the week.
Another charting win ahead of the move higher (which helps) was Alien Metals (UFO). The company boasted significant silver assays at Elizabeth Hill, leading to a 44% share price rise. A brave recovery was seen at Premier African (PREM) where cynical jibes that the shares would rise after the departure of former CEO George Roach proved to be correct. That said, he was featured in the RNS on Thursday which featured the quality of the resource at Zulu, so perhaps Mr Roach is more than just a Moses figure in terms of taking PREM to its Promised Land. The stock rose 38%. One of the better performers in the financial area has been Manx Financial (MFX). It built on its 90% share price gains for the year to date, with a further spike off the back of the green light from our friends at the FCA to offer insurance in the UK.
Stocks Rising On No New News:
It has to be said that this section of the Week In Small Caps is a favourite, as it always relates to the possibility of people buying shares on the inside track (or great guesswork of course.) That said, most of the risers on no news this week were rising off the back of recent news. For instance, there was a 25% rise for Alkemy (ALK) after the previous week’s binding feedstock agreement for its Tees Valley Lithium subsidiary.
That said, there has not been a RNS from AI / technology group Gfinity (GFIN) since the £300,000 equity issue in May. Nevertheless, the shares were up 22% on the week. Futura (FUM), the sexual health group, was also up 22%, despite earlier this month having to issue itself a speeding ticket for the share price rise, of which it said it did not have an explanation. One or two people on X were suggesting that the 22% rise for Sealand (SCGL) could be the harbinger of an announcement that could take the shares back to their 12p January peaks. We shall see. Highly fashionable rare earths play Harena (HREE) continued to go with the flow with an 18% share price rise on the week, with no fresh news since a directorate change last month.
Stocks Not Yet Rising On News:
NYCE International
One of the truisms of any gold rush is that it is very often the case that those who make the picks and shovels will be the ones who actually profit the most consistently in the long run. Given that many of the BTS plays are “me too” companies that do not know one end of a Bitcoin from the other, it could very well be that iGaming / web 3 group NYCE International (AQUIS: NYCE) will be a winner. This is said in the wake of the launch of its new Crypto advisory arm, primarily focused around the iGaming industry. Advisory areas include but are not limited to strategy, product design, infrastructure, content and tokenomics. One would imagine there will be the odd newly BTS company’s CEO who will be giving NYCE a discreet call in coming days.
First Class Metals
One of the gripes as far as investors concerning many of the London market’s earth scratchers is that they are either under capitalised or have subscale projects, or both. But it would appear that with the latest news from First Class Metals (FCM) we have reached an inflection point. This comes from news that its Sunbeam Property, specifically on the >10km Roy lineament, along with the “ever-growing potential of the other two equally prospective structures, as well as a possible fourth structure, could all lead to a “significant discovery.”
Fulcrum Metals
Fulcrum Metals (FMET), advancing the use of innovative technology to recover precious metals said that it has raised a total of £1.045 million through a placing at 3 pence. This was important for two issues. First to enable the company to take forward projects for assessment with its technology partner Extrakt Process Solutions LLC in the application of Extrakt’s technology beyond Fulcrum’s current projects in Canada. Equally important was the investment by MetalsOne (MET1), a company which should give FMET the firepower and the expertise to get itself over the line. FMET said it was looking to raise further cash among industry players.
Disclaimer & Declaration of Interest:
The information, investment views, and recommendations in this Zaks Traders Cafe interview are provided for general information purposes only. Nothing in this interview should be construed as a promotion or solicitation to buy or sell any financial product relating to any companies under discussion or referred to or to engage in or refrain from doing so or engage in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the commentator but no responsibility is accepted for actions based on such opinions or comments. The commentators may or may not hold investments in the companies under discussion.
