Erik Wetterling, Founder and Editor of The Hedgeless Horseman website, joins us to discuss portfolio management, and how the upward moves in higher conviction plays and larger position-sizing cushioned the corrective moves lower in many other juniors.   One of the key takeaway points Erik makes is that: If he was worrying about the macro drivers like what the Fed is doing, or handwringing over the price of the paper metals every day, then he never would have gotten into some of his higher conviction positions continuing to build value that actually went up over the last year or two; or that he would have sold them far too early.   In this sense, Erik is ignoring much of the macro noise to focus instead on the company-specific micro news and developments.

Erik still feels that for the resource sector overall that we are continuing to see absurd valuation mismatches, often seen near bottoms of bear market corrections, and that he is reshuffling his portfolio and adding in a few more advanced exploration, development and even production companies that have defined ounces in the ground, that are getting only a fraction of the value they should.  In addition, he points out that some microcap juniors have recently surged higher on the news that major producers have taken strategic positions in their companies or options on their projects.  He outlines both the Newcrest  (NCM) (NCMGY) stake and option agreement with 4 properties from Headwater Gold (HWG) (HWAUF), and the recent news that BHP Billiton (BHP) has taken a strategic position in Brixton Metals (BBB) (BBBXF) to help them advance their Thorn project.*

*Some of the companies mentioned by Erik are personal positions are covered and sponsored on The Hedgeless Horseman website.

Click here to visit Erik’s site.