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.
It’s definitely not too late to get into the precious metals bull market. Even though the gains at the beginning of this cycle have been extreme, we still have a long way to go. These next 16-18 months should be exciting! Matt Geiger says that typically the real money will be made in the first half of the cycle. He recommends being aggressive in investments up to mid 2018- after that it’s likely to be less lucrative.
Watch interview with Matt Geiger:
The cycle timing charts from Palisade Research show that we are in a cyclical business, and that the severity of the bear market will often indicate how profitable the preceding bull market will be. Precious metals usually run in 4 to 5 year cycles. Unless there is a cataclysmic event, we will likely see gains through 2020.
Matt’s main emphasis is on concentrated positions. It’s easy to take too many companies into your portfolio, and we have limited bandwidth as investors. Following company milestones, and making sure companies are executing their goals is a lot of work. What works for Matt is to have 10-25 holdings. Quality management is especially essential for early stage companies.
With private placement investments, the common shares are usually held for 4 months and then can be held further, or sold. You could jump from company to company every 4 months accumulating upside. Going into placements you should understand exactly what your strategy is. Choose if you are going to clip the rewards, or- if they deliver on goals, plan to hold the company beyond that 4 month period.
Talking points from this week’s interview:
Matt Geiger has a diverse set of skills pertaining to early stage ventures – both in the world of natural resources and tech. He is currently General Partner of MJG Capital – a resource-focused investment partnership with 20+ LPs. He is also Cofounder/President of a venture-backed technology business with $10m in cumulative funding. Known for his exhaustive security analysis and intuitive grasp of contrarian investing, Matt is a rising star in the junior resource field.
