Good point on volume. I do check volume for which has more activity but if I can’t find a reason for the discrepancy in price, I end up suspicious of the one that has more activity. Rather than suspect intervention, maybe I should give more weight to possible insider trading. That way the apparent alternative criminality would be more enlightening. It appears I am a true cynic.

Ha! You’re a solid guy Lakedweller2, and it is good to be critical and even concerned about the way some markets trade, but yes, normally the more liquid primary ticker, or if dual-listed, the higher volume US ticker is a more accurate read on the price action.

I’ve seen many instances where a big move in the OTC stock, is just it catching up to where the primary Canadian, or London, or Aussie ticker has already gone, or it is accounting for the currency spread, etc… so it can be odd to see a primary ticker flat with the OTC up or down big, but if you go back an look a the day or days before that, it often is the case that primary ticker already made a big similar move previously. It is more common for the OTC stock to lag the moves in the primary ticker, versus lead the primary ticker, but if both tickers are pretty high volume and liquid, then it can be the other way around in special instances.

Good thoughts and may your trading be prosperous, whichever exchange they are on. Cheers!

I like that idea…..build your own ETF…… Bravo….. You deserve it….

Thanks amigo. I appreciate you saying it that way OOTB, and getting the concept, as I usually get grief from people about this topic, which has always seemed strange to me.

Yes, I’ve been promoting the #BuildYourOwnETF idea for years now, and that is essentially what people are doing that build their own basket of stocks anyway.

We hear some people say 5 stocks or 10 stocks is all you need. Oh really, says who?

Or we hear people say… “you don’t want to have more than 20 or 25 or 30…” Oh really…. where is the data on that? (here’s a clue there isn’t any, and it’s all personal preference).

These are all arbitrary numbers people are just pulling out of their hat, as there absolutely is not a perfect number of stocks to hold in one’s portfolio. It totally depends on the individual’s work ethic, capacity, investing style, kinds of stocks included, the desired diversification, risk tolerance, etc… There are gobs and gobs of mutual funds with 40-150 stocks in them and they have fund managers that oversee and rebalance them, so how in the world could they do that if there were “too many stocks” in them. It’s a silly notion….

In addition, I hold a lot of royalty companies and larger producers and they don’t require me to follow them that closely or much babysitting. What is radically going to change with companies like Hecla, Coeur, Equinox, Silvercorp, Silvercrest, Karora, Sandstorm Gold, EMX Royalty, Metalla Royalty, Elemental Royalty, etc…. from day to day, week to week, or month to month Not much. Most of them just put out quarterly operations updates anyway.

I don’t need to call their management teams, or be on conference calls or watch their news like a hawk, as they are just going to have good leverage to the metals prices. Hecla has been around for 125 years, and they aren’t going out of business anytime soon. The royalty companies are diversified across dozens or even hundreds of companies themselves, so it doesn’t take me any time every month to hold those in my portfolio.

Now, if someone only had a basket of 60-70 drill plays, then, yeah, that would be a lot of work to keep up with all that news, but I’d never do that or recommend anyone else (other than Crescat Capital or Eric Sprott) do that.

Look there are PLENTY of people that only invest in just the PM mining stock ETFs and they have far more exposure to a larger number of stocks than that. Same thing with any ETF in any sector for that matter.

–> SILJ has 65 positions

–> GDXJ fluctuates between 95-120 positions (currently it has 100 stocks).

My portfolio fluctuates quite a bit, but it is usually in the 60 – 70 stocks range. That is no different than those ETFs, that a fund manager looks over, but for some reason, people think it’s really extreme if someone builds their own ETF instead with a similar number of stocks.
>> Personally I like my portfolio a whole heck of a lot better then GDXJ or SILJ 😉

There are times where I get a little behind on a specific company’s news, but if something really extreme happens it will show up in the share price action, and nobody else is ever prepared for extreme news anyway… even if they only held 3 stocks.

I just find the whole argument that many people give that “it’s too much to keep up with” off-base as most of these companies only put out meaningful news once a month, if that. If you had news in 60 companies once during the month that is about 2 a day… which could be done in 10 minutes or less.

Now doing charts for 60 companies constantly would be a real task, but I generally am not doing that either. I only pull up individual company charts when I feel compelled to trade a company or do a quick check up on it if the price action looks a bit unusual… so even that argument falls flat, unless someone is a super active day-trader or swing-trader.

Bottom line, it is not that much work to build up a larger basket of stocks, especially if you’ve been following some of them for over a decade. How much really changed last month? or this month? or will change next month? … not very much. I probably only spend 30-45 minutes per day actually reviewing my personal portfolio, and have done that for many many years without issue.

Great thought………
“if something really extreme happens it will show up in the share price action, and nobody else is ever prepared for extreme news anyway… even if they only held 3 stocks.”

Thanks OOTB.

While on this topic, I happened to catch a conversation over at Steve Penny’s SilverChartist blog where a European investor mentioned he had over 500 stocks in his portfolio, and wanted to crunch it down to something more manageable, which he stated was 100 stocks…. Haha!

Now I don’t feel so over-exposed and 60-70 stocks seems like a much smaller portfolio to manage versus 500+ stocks. Wow!!

Ex, the more stocks you own the more difficult it is to beat the market. It’s that simple. Of course for most investors just matching the market, or close to it, is a great feat.
There’s no need to dramatize investors’ preference differences. You prefer more safety than someone like David Erfle or myself or probably most investors in the junior miners. When you hold so many stocks you effectively turn your potential performance into that of a senior miner. If one of your positions has a great drill hole it will impact your total portfolio in much the same way that a senior miner can expect if it has a great drill hole. I avoid having too many positions or too many senior miners for the same reasons. Both take away upside potential. Of course those who aren’t the most confident stock pickers or chartists would of do well to own plenty of stocks for the safety it provides.
I’ve had many “10-baggers” and even better and that’s not counting warrants (Rick Rule has absurdly claimed private placements and warrants are necessary for such gains). I’ve also lost track of the number of takeovers and mergers I’ve had and the vast majority of them and the 10-baggers were large positions to begin with. Such wins would have meant a LOT less had they happened within a portfolio of 70 stocks.
What’s right for one investor can be very wrong for another.

Yes, that was precisely my point that what is right for one investor may not be right for another investor, and that is why suggesting there is a correct number of stocks like 10 or 20 or 30 or 100 or 500 is ridiculous, and I don’t feel bad about owning 60-70, or I wouldn’t do it. There is no correct system or number or investing approach that is right for everybody.

I agree with you that it is a more conservative approach to hold a larger basket of stocks, but I don’t see anything wrong with that in a sector as risky as junior mining stocks. For example, I’m fine putting some of my capital in a royalty company like Sandstorm that is diversified across a few hundred royalties, and completely understand going into that equity that it will likely not outperform many individual mining stocks, but it also isn’t going to blow up my account like a speculative drill play might by overweighting it.

Yes, I’ve had “10-baggers” as well and been part of so many mergers/acquisitions that I’ve also lost track, but agree that they were smaller percentage positions within my portfolio and didn’t have a massive portfolio altering effect like if I just held 10 positions and that happened. However, being in the right kind of stocks and being a decent stock picker still can cause even a larger basket to outperform, along with good trading around partial positions, and good rebalancing within the portfolio. If a basket of personally picked stocks can regularly outperform an ETF, then where is the shame in having a diversified portfolio that outperforms? It may not provide as huge of upside potential, but it is in alignment with my goals, risk tolerance, and investing style of active portfolio management.

Yes, it may not have as much upside as a more concentrated position, but during drawdown periods like the last few years it also doesn’t have as much downside. So yes, agreed, it is a safer approach with is actually a plus, not a putdown, but also agreed that it may not have as much upside which could be considered a negative to that approach.

Look, there is no perfect system, or perfect number of stocks to hold, or correct way or better way to invest. Having a more concentrated position isn’t better or worse than having a well-diversified portfolio, and they both can make money, but have different risk/reward profiles, as a concentrated position does involve taking on a larger degree of risk, which also is not right for everyone either. It’s a personal preference on risk tolerance, the amount of diversification desired, and someone’s investing approach and goals. There is no one size fits all answer, which was the whole point.

That’s correct. Right and wrong is an individual decision. For me, holding 60-70 juniors would be very wrong since I know that any list of that size could be pared way down based on numerous factors relating to quality/risk/leverage as well as the charts and near term “boots on the ground” plans. Diversification for the sake of diversification doesn’t appeal to me and that’s exactly what 60-70 gold/silver juniors represents.
I put 60% of my “miner money” into 3 juniors in 2016 and all 3 went 10-bagger (+/-) off their lows while SILJ delivered a 5-bagger and most juniors delivered 3 to 4 baggers and worse for those that were focused on base metals or other non-gold/silver assets. There is no way that 60% any group of 60 or 70 stocks went anywhere close to 10x in 2016 no matter how well they were chosen. Conversely, there is also no way that my approach could be as safe as betting on 60 or 70 stocks and a poorly chosen small number of holdings has the potential to dramatically underperform the market.

Yep, good points Matthew, and agreed and I do get all that and the pros/cons of each approach. I’d never be comfortable with the risk of putting 60% of my mining stock allocation in 3 stocks like that, and consciously made the decision to sacrifice larger potential returns to have a more diversified portfolio with less volatility and risk.

I believe the 60-70 companies in my portfolio will outperform most of the other 1000+ mining companies due to quality/risk/leverage and their business strategy (I already did pare them down from over 90 at one point in 2021 to get it down to the mid 60s now). Stock selection is actually one thing I do pretty good overall, although we all have a few stinkers from from time to time in our basket of stocks, and there are plenty of problems that can plague even the best run companies.

Most of the portfolio positions are allocated to the PMs, due to the favorable setup for gold and silver stocks to outperform over the next 2 years, but there are some Uranium and Base Metals plays in the mix as well as plans to add a few oil & gas stocks this year.

There are different approaches for different investors, and I appreciate getting your take and vantage point on how you invest. Thanks.

Wonder who got those shares and warrants? Offering was well received since they beefed it up to $8M. Did you get a piece of that?

No, I don’t generally participate in private placements, and have talked in interviews and written a lot here on the blog for some time that I don’t like what warrants due to handcuff and put a ceiling over companies shareprice action, and feel they hurt investors that buy in the open markets, while rewarding insider cronies.

I don’t like it when companies issue options but warrants are fine as long as they are priced right for the circumstances. Explorers are always in need of cash and warrants help them to get it. Any price ceiling that warrants might cause is usually no big deal in my experience but of course it depends on the company’s finances, its prospects, the number of warrants issued and of course the exercise price of the warrants.
“Investors” that buy in the open market are technically not investors since they do not fund the company but merely trade the shares that result from those who do fund the company. That’s what makes them “retail” investors.
When market conditions are right private placements can be done without offering a warrant and sometime without even offering a discount but such conditions are obviously not typical.
The bottom line is that management is at the mercy of market demand for their companies’ shares so their timing is everything.

There are plenty of times where insiders sell big blocks of shares once they get a sniff of a financing coming with a warrant attached, driving down the shareprice in a cascade of selling leading up to the financing, just so they can all get back in again at a low price and scoop up the warrant. This is slimy and right out of the gate this is killing any pricing momentum or accelerating downside price momentum. They wouldn’t have sold if not get back in and pick up the warrant on the financing as their kicker, and there would be far less selling in advance if the warrant was not offered. In addition, the warrants are often given away at too low of an exercise price, and often extended in far too large a length of time (3-5 years is way too long… if they can’t build value in 1-2 years after a financing, then they are not executing a sound business strategy, and are giving warrant holders far too long of a leash).

Then post-financing, if the company does do good work and drive the value higher, the shareprice goes up to just above that exercise price after the 4 months has passed, and pricing gets capped there as investors dump shares right above the exercise price level to just hang onto the warrants. This hurts pricing momentum and eventually their technical set up once again, creating a wall of shares to work through, and typically kills upside momentum when price was previously just breaking out. As a retail investor, or for any direct investor in the capital raise, that is clearly not an ideal scenario, and yet hundreds of penny dreadful drill plays and dead-end developers do this over and over again, year after year.

In many cases, the reality is that the companies are not highly sought after, and are pandering for more capital and bad management teams feel that they have to give away the farm with poorly priced warrants with far too generous of terms to get their nut. Warrants, if absolutely needed, should be a potential kicker PP particiapants for good value creation, but not a slam dunk dilutive event where the warrants will be reached too easily and then all be in the money. That is one of the huge problems in the industry, and will not attract the new investors so many claim the sector needs.

There are a number of times where companies have a ceiling in price around the warrants exercise price, and then the stock will trend back lower after losing steam a few times. Then finally, if the balance of the warrants expire worthless, then that the stock can gradually climb out of it’s funk, and break above that pricing resistance, but it does depend on the background sector strength or weakness.

Often we see that the best quality companies, in high demand, can do financings without warrants that will carry the company for longer times 12-24 months like when larger Minera Alamos or Vizsla’s financings went off well with no warrants. Some companies at least find a less dilutive path of just using 1/2 warrants for the carrot to attract investment capital, and that is sure a better answer than full warrants.

If the company has to give away the farm at too attractively priced warrants with really long expiration periods, it speaks to how not in demand the company is at that time (ie… not really a good time to finance it), and that they depleted their last financing without really building value and momentum to where there are investors and institutions that just want in the financing and don’t necessarily need the warrant to be interested.

This is the real elephant in the room… there are tons of companies with their hand out wanting to raise more money, but the question should be what value did they really create since their last financing, or better yet last 2-3 financings? The sad truth is that most pre-revenue companies are just burning through money, and not building the respective value associated with solid work programs, that executed, and hit key milestones. Had they done that, then there would have been plenty of interest to raise more capital without necessarily needing a full warrant, or warrants at all. Yes, as retail investor buying in the open market, that is quintessentially important… real value creation through solid work with the capital raised….. otherwise, they are just mining the investor base, and will never have a project with economic significance.

Many times these companies do this cyclical process of insiders selling out of shares tanking the shareprice to get into the next financing, that is not really big enough for the company to do much meaningful work but it does insure the payment of their excessive salaries. Then those same insiders dump shares once they get over the exercise price, and it kills the price momentum as shares are climbing. If done too liberally and too often, without really building value between capital raises , then retail investors pick up on this hamsterwheel of capital raises and start getting less likely to keep buying in only to get fleeced again, while the insiders play the same song over and over again. Most junior companies whining about their low shareprice performance have been their own worst enemies and did something similar to what was just described over and over again.

Many companies in other industries are able to do capital raises without being nearly as cavalier with the warrants that many mining companies give out like candy to “attract” investors. I’m not saying they’re aren’t special circumstances where a company has had a stretch of bad luck and just needs to offer a warrant to attract capital and get back on a better value creation path, but most times, junior miners are some of the most notorious capital destroyers. In addition, often bad or clueless company management teams give little thought to retail investors because they don’t see them directly giving money to companies in financings, but attracting that retail audience is precisely what they need to do to get true and sustained pricing momentum going in their shareprice and market cap, and ones that fleece retail by only hooking up insiders as a lifestyle company, eventually just become a money trap.

Ex, you have a long history of acting like you know better than the market when you clearly do not. To say that it’s “slimy” for one to dump shares to take part in an upcoming financing is over the top.

Re: “They wouldn’t have sold if not get back in and pick up the warrant on the financing as their kicker, and there would be far less selling in advance if the warrant was not offered. In addition, the warrants are often given away at too low of an exercise price, and often extended in far too large a length of time (3-5 years is way too long… if they can’t build value in 1-2 years after a financing, then they are not executing a sound business strategy, and are giving warrant holders far too long of a leash).”
There is so much wrong with your assertions it’s baffling. The warrant and/or a lower than market price is designed to attract investment where interest might not otherwise exist. You are not the arbiter of sound deal-making and your blanket statements about building value and sound business strategies prove it along with your belief that YOU know the proper lifespan of a warrant.

You spend paragraph after paragraph editorializing and pretending you have the answers and the market doesn’t. My advice to you is to avoid the whole sector because repeated raising of capital is how it works and “just burning through money and not building the respective value” happens all the time and happens LEGITIMATELY. That’s the nature of exploration. Most companies have suboptimal prospects and suboptimal management and neither means that anything nefarious is going on. Likewise, most investors suck but that doesn’t make them dishonest does it?

Someone’s always going to get burned in this business. Remember when Alexco raised 30 or 35 million at over 8 bucks a share? I do. That was swell and very shareholder friendly UNLESS you were one of the fools paying over 8 bucks and getting a warrant that was destined to never be exercised.

Take responsibility for your own actions and let the market work. Corruption is always present in every industry and especially in virtually every individual these days but the corruption that you perceive is hardly worth worrying about unless you don’t have a clue what to do.

We’ll just have to agree to disagree on a number of these statements and likewise you are not the arbitrator of what a good deal is either, and often are quite patronizing in your responses back, talking down to me, minimalizing my knowledge and experience, and trying to paint it that I’m clueless or ill-informed, which neither is true.

I’ve been in this resource sector trading actively and immersed myself in it for over a dozen years, and this is not my first rodeo Matthew. Many times, the overuse of warrants to attract investors interest in companies that otherwise don’t have any interest, because they likewise have not been building value or momentum between capital raises with the last money raised and torched. Most companies are mining investors and likely not ever going to have a project mining ounces in the ground. That is a fact, not hyperbole.

The lack of respect, or even disdain, that some company have teams for retail investors that we talk to (and I’ve personally talked to hundreds of teams and companies, so again, I think I’ve got a pretty fair handle on it and experience hearing it directly from the horse’s mouth) is very telling. This is why some teams have no qualms with tanking their own shareprice to sell a stock down, and then pick it back up & scoop up the new warrant and ride it right back up, without any concern of what that does to retail shareholders, or the momentum in their own company. Yes, I find approach that slimy as well as often acting on information being shared internally and non-publicly about the upcoming capital raise. I hear it all the time and have been offered to get into PPs on some of these, but turned it down, when I likely could have made pretty good money on them.

Many of these poorly run companies are liberal with the exercise price and time period the warrant is available, making it almost a guaranteed win, where it should be a reward for shareholders that helped fund the company once the company built a reasonable amount of value, and many warrants should expire worthless if the company can’t execute. Yes, it is disgusting and slimy to repeatedly hook up insiders with easy warrant candy, while crapping on retail shareholders repeatedly and capping price action, when many solid companies can raise capital without warrants or with half-warrants because their stock is gaining traction and their team is doing quality work.

Yes, most of the junior mining sector is garbage and capital destroying sector, while a few teams or projects do build value. That’s the bottom line, and many warrants are nearly gifted away for insiders getting in to milk the situation for themselves and people in the private placement, with almost no regard or snide comments to the retail shareholders buying in the open markets, and/or how their actions are killing the momentum in their stock if they do start getting some with big warrant price overhangs. There is a time and a place for them, but many are not in the rest of the investors best interest, and usually focused solely around stacking up all the odds strictly for those in the private placements.

Now there are good teams/projects that do have rough periods during tough sentiment sectors or I included lots of nuance in my answer to cover times where warrants may be the right call for a company that has had a string of bad luck and didn’t build value or interest since their last capital raise.

Anyway, I’m fully aware of many of the games played on Bay Street and Howe Street, and don’t need condescending responses from you about how I don’t know anything, but for some reason that you know better or your opinions are more sound and valid. Sorry man, I don’t see any of that being the case.

Also, Matthew, If you are just going to respond back and be insulting and condescending and belittling towards me in a response, then just spare me and anyone else reading from that. It’s combative and not helpful. It doesn’t make people more well-informed investors when you go after people making it personal like that and then get ugly and insulting, while always assuming you have the high ground or correct frame of reference. It’s just not a good look for you and it is not a value-add.

Ex, you are always light on facts and analysis and HEAVY on baseless opinion yet most here fall for it including you. Your true competence level should put you in student mode most of the time but instead we get the “expert in all things mining” mode. In other words, your confidence and overwhelming verbiage is unwarranted. It IS helpful for KER’s visitors to know that or at least to be exposed to that opinion as they develop their own opinions.

I have little interest in fully dissecting your posts properly and point by point so that’s a win-win.

Well, that sure was the pot calling the kettle black with the “expert in all things” comment, but whatever, your entitled to your own unique opinion and views. That doesn’t make them true or on target, but you’ve never really been complimentary or even given me the slightest bit of credit for all the work I share or try and help investors with. It’s fine, I don’t require it and there are tens of thousands of posts on the KE Report that demonstrate the value I’ve brought for years.

As for you’re constant need to put me down and frame your opinions from the vantage point that I’m just a novice or should only be a student (which is hilarious)…. I’ve made thousands of trades over 2.5 decades of investing, and have exponentially increased my account value (and not blown up the trading account like so many do, even well-seasoned traders). I have much more trading experience than many of the guests we bring on the show that simply just make a few trades and recommendations each year, and then camp out in them until the conditions approve, and I have a pretty good working knowledge of technical analysis. Most people would be hard pressed to find someone doing more trades in this sector, following more companies, following more sector news, review more charts, and consuming more economic news and data. I spend 10-12 hours per day on the overall economic picture, and have a solid track record of success, so yes, I believe my comments and perspective have value as someone that has specialized in resource stock investing.

I’m not even sure where you coming from with your critique that I’m “light on facts and analysis and HEAVY on baseless opinion” That’s a ridiculous comment, because I provide tons of data (more so than most on this site), from company news, to technical data, to macro information, and make a concerted effort to back up any thesis I have or my opinions with logic, analysis, and yes, with plenty of facts. I realize you miss a great deal of this data and the facts shared, when you just skim over posts missing alot of it to get to discussing your charts and acting like your expert opinion is the only vantage point to hold. Once again, instead of addressing points of a thesis you like to go after individuals and shoot the messenger, and those were totally off-base comments, meant to belittle and be condescending considering all the analysis and work I do to share here and have for over a decade. You may not like it, agree with it, or even value it (which I could give a flip about), but to deny I share plenty of data and facts is laughable and just a personal swipe, so no… that is not a value add guy.

For many years I have talked and continue to talk to hundreds of companies within the resource sector and without, and have had hundreds of discussions with thought leaders and pros in investing and economics. Again, most of the people commenting on the blog would be hard pressed to do as much due diligence as I’m doing in this sector every day, week, month, and year. These folks I speak with have repeatedly respected and valued my insights, and have been impressed with my depth of knowledge in both investing and in the resource industry, and nobody but you has ever accused me of “baseless opinions” or for being “light on facts”. That’s plenty of experience compared to most occasional novice traders, and a far cry from being a beginner; but of course we are all always learning.

I’d submit we both have quite a bit of experience in the markets, and have good insights to share with investors, and both should remain perpetually students of the markets and always learning.