Welcome to our new subscription newsletter
For years I have wanted to share my thoughts with a broader audience regarding investing and making money in the commodities space. For a variety of reasons I have not turned my attention to this endeavour but feel the market is changing, and creating a community of speculators to share ideas, celebrate wins, and commiserate the losses is growing more and more important.
As the old adage goes, “if you want to do something new, you have to stop doing something old.”
To that end I am launching a personal monthly letter on The Oregon Group: Greed, Guts, and Glory: Mastering the Art of Speculation, to focus on creating a community of like-minded individuals. I intend to share my views on the space, strategies, people and, above all else, share opportunities.
Upon reflection of my experiences over the years I am reminded of an anecdote about Henry Ford. As the story goes one of Ford’s employees made a mistake that cost the company several thousand dollars (a huge sum of money back then). Instead of firing him, Ford kept him on, saying he had just spent thousands of dollars training him and didn’t want to lose that investment. This story resonates with me. Over the years we have had huge wins and, at times, even bigger losses, have been involved in nearly every type of financing, deal structure, commodity, and had the occasional brush with scandal. But when taken in totality, these experiences are the battle scars that make me a seasoned investor.
The market has changed. Not so long ago hedge funds piled into junior mining stocks, bringing along with them liquidity and huge gains. Brokers could move markets with a phone call and raising capital was easy. For the most part, the global financial crisis changed this. Hedge funds became ultra focused on liquidity, young investors were no longer able to raise new funds and instead went to work at “pod shops” like Millenium where liquidity is prized above all else – effectively ending or severely limiting their exposure to microcap stocks. The vast majority of the capital allocated over the past decade for investing in mining was done in “private equity” structures. This has come to mean that the billions of dollars raised are primarily interested in debt and other structured products and not able to buy equities on the market. All of this in the face of general investing trends towards ETFs (that don’t write checks) and other passive structures. In short… it is tough out there!
Notwithstanding how hard the junior mining markets have been, look around the room you are in… nearly everything you see was either mined or grown. The modern world we live in cannot exist without mining. The time from discovery of a deposit to mining is not measured in years, but instead decades. The lack of exploration and development dollars from the west has meant that China has secured many of the most important critical mineral deposits globally. This will be the opportunity. Underinvestment and lack of foresight by Western nations. Decades of underinvestment in infrastructure and a power grid that is older than my grandfather. All the while AI is becoming more ubiquitous and all power consuming. Microcaps will find their mojo again.
Making money in the junior mining space is hard. It requires connections, timing, ideas, access, and above all else luck! Yes…luck. But as with most things in life, you make your own luck. Luck comes through taking views early, backing people, and going places that others don’t dare. I believe there is a framework that helps position you when lighting strikes. I hope you will join me as I share with you my views on what exactly that framework is.
Anthony
