Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
One of the miracles of the free-market system is that when one person sells a share, there is another who is buying. Who are the current buyers when all are seemingly selling?
I chatted today to one buyer. We meet occasionally outside at the back of the office building for a smoke. Our conversations are casual as is the advice/opinions re investment in this blog posting.
He is 75 and rich. He still works a full day as a stock buyer & seller. Except for a thirty minute snooze after lunch.
He confided to me that he believes the current downturn in mining is a two to three year thing. “It will be a long time before we see the crazy prices of yore,” he said.
“But I buy selectively,” he said. “For there are some great bargains out there. Of course I can afford to wait three years. I can afford to loose lots in return for long-term profit. I concentrate on value mines, on potential, on the promise of the future.”
He still believes that the rest of the dispossessed world wants to live like we do, and that mining is the only way they will ever be able to live as we do, regardless of what David Suzuki says.
“People do not eat scenery; they do not raise kids from working as tour guides or recycling plastic. You must grow the food fertilized by potash mines, take the kids to soccer with oil sands bitumen, and heat with coal or uranium.”
“And I believe I can and will make money investing in this future. This I do for my kids and grandkids.”
So patience, persistence, and long-term perspective when investing now in falling mining shares. Let us know how you fare/fair.
For more from Jack Caldwell, see his blog, I Think Mining
Image: Jack Caldwell
