Erik Wetterling, Founder and Editor of The Hedgeless Horseman website, joins us unpack how he approaches value investing in “probable growth” companies his portfolio of junior gold and silver mining stocks. A key point covered is that most investors are not really longer-term buy and hold investors, and instead the vast majority of market players are trying to time the markets for entries and exits. In contrast a value investor finds a competent management team with a defined strategy to grow value in their project, then has the patience to sit tight through market volatility to let the thesis play out.
This value creation, as it unfolds, will then bail out any mistimed entries with regards to sector metals prices and the corresponding growth in market cap will happen regardless of the macroeconomic backdrop, when sentiment inevitably shifts back up for the resources. Erik finds this simpler approach to blocking out most of the market noise key, but it is a more nuanced art as far as isolating which companies & teams are actually going to be building enough intrinsic value to outpace financing dilution.
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