So Powell got re-elected and the overvalued stock market got a boost while gold got sold…

Yawn, who cares.

The destination is already set for gold since this system is mathematically doomed.

The daily news (noise) just changes the pace towards the end game if even that.

The fact remains that we cannot have infinite growth via FIAT in a world of finite resources.

Powell and money printing can’t create deposits or mines and the shortages will only get worse if only the Demand portion of the Supply/Demand function increases.

The overall market is at record high valuations while the mining sector is at or near record low valuations.

So what if it takes one, two or three years for the reversion to the mean to manifest…

When it does we are not talking 50% returns for junior miners but rather >500% in my opinion.

So while it might be frustrating not to be printing money on paper right now I think it is important to remember that the stock market averages 9% returns over the long term and that we are already at nose bleed PE valuations to boot.

In other words if one would need to wait a year or two for a 100% return in miners it would still be absolutely ridiculously good returns for such a short period of time.

I know, I know, we all want to have a ten bagger tomorrow at the latest but that is because we have unrealistic expectations.

My personal goal has been to average 50% per year and that might not sound like a lot but if you start with $10,000 it becomes $576,650 in 10 years with a CAGR of 50%.

If you start with more then the numbers get crazy pretty quickly.

What my advice would be is:

  • Focus on the long term
  • Focus on picking the best companies and have a 12-24 month horizon
  • Stop judging your portfolio or investing skills based on day to day, week to week or even month to month returns
  • Do not build a case for any company based on where you think gold/silver or whatever is heading in the short or medium term

… In short: Focus on getting the Micro as right as possible and let Macro (a raging metals bull) be a bonus.

How do you waste 59 minutes of your life?

Look at your portfolio for an  hour.

Your companies and the people that work for them (and you) do not stop working just because Powell will get re-elected and gold got hit on November 22, 2021.

The deposits that are found today will not be in production for 5-10 years if ever so it does not really matter what gold is doing today.

Instead of spending hours looking at gold, silver and your portfolio you could actually be productive and read, write, work, work out or bake a cake.

When you invest in companies you are buying other peoples labor and that labor will keep laboring regardless if you watch a ticker or not.

Investing is supposed to be freeing, not you buying other peoples labor and then wasting your day looking at a screen which has ZERO impact on the companies anyway.

Personally I have done less trading in 2021 than any year before.

I have perhaps traded with like 5% of my portfolio.

I have some 50 companies I want to buy or add in because there are so many bargains out there.

When I get dry powder I typically buy whatever stock I like that is down the most on any given day and then I go about my day since I think many juniors I own are >100% away from resembling fair value (there are exceptions).

Times like this, when sentiment is bad and stocks get hit by tax loss selling, might be boring/frustrating but it is a god damn gift for the patient long term investor.

At times like this is when you can set yourself up for outsized future returns and all one has to do is buy cheap and wait.

That’s literally all there is to it when you are fortunate enough to buy at no brainer valuations.

In fact, the junior sector is so cheap that I am more diversified than ever.

Historically I have tended to run a pretty concentrated portfolio but that was because valuations overall were higher and there were simply fewer no brainers around.

Now there are so many no brainers that I can enjoy the tranquility of diversification without giving up serious future returns in my opinion.

Foor for thought.


Best regards,

The Hedgeless Horseman


2 thoughts on “THH: Noise And Patience

  1. Marshall says:

    Another insightful reminder from Erik.

  2. Kevin says:

    Great thoughts Erik-

    What’s great is that you are just telling us your investment philosophy and thinking, but that has a lot of wisdom engrained. I have the same thinking. However, with 22 exploration positions, I decided to try not to spread out any more with smaller and small positions. When I have extra cash to invest or I sell out another regular stock, I put the money into whatever exploration company that is on fire sale within my existing positions. At some point I have to say I can’t have a position in every opportunity.

    Lately, it’s been White Rock Minerals, Aurania Resources and Jaxon Mining. Jaxon is an incredible story that no one knows about with a $7.585M market cap. They had their first drill program this year after years of detailed exploration setting up for this drill program. They have so many targets it reminds me of Eskay Mining.

    I made the mistake with Eskay Mining of only buying a $3K position (at $0.1/share). I bought a recent second position at $1.67. I’m not complaining. It’s already an incredible position with much more blue sky upside as you’ve written about. I’m not making that mistake with Jaxon. Or with White Rock.

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