Erik Wetterling – Getting 10 Bagger Returns In Junior Mining Stocks Is A Process Not An Event
Erik Wetterling, Founder and Editor of The Hedgeless Horseman website, joins us to break down his strategies around going after 10-bagger returns in junior mining stocks and notes that it is a difficult process and not an event. We discuss investor psychology around what they claim they want and how they actually handle extreme volatility in the sector in practice.
We get into some of the nuances around pre-discovery speculations versus post-discovery speculations. He points out that it is actually better to press one’s bets when a company is onto a legit discovery, versus taking profits right at the point where the assay results start proving a potentially larger thesis. Erik also discards many of the market mantras and trading rules like “selling half on a double” “or take profits along the way” and breaks down how that math doesn’t work if you really want a multi-fold return in a gold, silver, or copper exploration stock to bail out a number of other speculative positions in explorers that statistically aren’t going to work out.
Three examples of junior resource companies Erik flagged that actually became true 10-baggers for some investors are New Found Gold (NFG.V), Snowline Gold (SGD.V), and more recently Hercules Silver (BIG.V).
*In full disclosure, the companies mentioned by Erik in this interview include personal positions in his portfolio, and they may also be site sponsors on The Hedgeless Horseman website at the time of this recording.
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Lakedweller2 – Thanks for those comments and for sharing the companies you have on your radar for trading.
Silver essentially doubled vs commodities off of last year’s low and now it is launching a stronger move…
https://stockcharts.com/h-sc/ui?s=%24SILVER%3A%24GNX&p=M&yr=20&mn=0&dy=0&id=t9925920198c&a=1527896861&r=1700200807239&cmd=print
That’s a relief!
FREAKY FRIDAY AGAIN………….
W. MIDDELKOOP from CDF.com said once. I don’t sell discovery’s. The get taken over👍. And every year his funds has a few. Not all 10 baggers. Some with “only” 40% profit and some much more. You can check the CDF.com website for this overview. So of course i agree on this interview. You buy for a dime or two and stay put. #big.v😊
thanks for the info…..
the guy has an extensive background…. as like many here do also….
+1
Argonaut just achieved commercial production at Magino…a nine hundred million boondoggle which is now in the rear view mirror.
The stock has tanked which is par for the sector these days I suppose. At these prices it’s got to be a takeover candidate about which my emotions are mixed. As a takeover it would be a double or triple from here. But it’s a ten bagger when the sector turns.
Any thoughts?
Hi blazesb. Good comment on Argonaut, and it seems very much like the worst for them is in the rear-view mirror as you stated, and that now with Magino starting to produce, I expect a rerating in this stock over the next few quarters, and have gotten repositioned in it over the last few months accordingly.
Also the management team is improving with Richard Young (of Teranga fame) at the helm now, which I am very comfortable with. Yes, Argonaut may become a takeover candidate once some of the bigger producers size up how Magino is producing, but I also see the potential for Argonaut to go on the offensive and be the acquirer too. Keep in mind they scooped up Florida Canyon by acquiring Alio to bolt on another mine. They also acquired Magino as a huge development project and have been working on it for years, and now all that hard work is going to be finally paying off as it is in operation. I could see them looking around for the next project to bring into their portfolio.
Transparency in Junior Miner Sector badly needed !!
Campaign against fraudulent Short-Selling in Junior Minor Sector
https://savecanadianmining.com
Eric Sprott
http://www.youtube.com/watch?v=QBPEnUSCnW0
Great interview. Here is another thought of a process that I seem to fall into. I have done this in many of my holdings and it automatically keeps a 10 or 20 bagger not possible (and I did it in such stocks as Great Bear , Emerita, Magna and others).
It has to do with taxes and how you claim taxable sales. I use FIFO which means If I have multiple buys over a year or so, that if I sell any it is the “current” first ones I bought, which is normally the lowest priced. Say I have some that have gained 200-300% in the first ones in and 5% on the most recent bought. I am always tempted to sell those cheap ones with the gains because if I buy something else I consider the new stock as bought on sale as I am using gains (less taxes). In order to keep my share levels up, I will either replace those shares sold at a gain either before or after the sale so the # of shares are the same. The end result is I am spreading the gains around expanding the portfolio value with fewer paper gains being held idle. (This doesn’t work too well in a down market where paper profits are eliminated)