My Greatest Investment Ever – Ivanhoe Mines ($142,758.64 Realized Gains)

The very first thing I learned as an investor is to “buy low and sell high“. For anyone reading this, the previous statement may seem most trivial, but I assure you that it’s absolutely not!

In fact, over the years, another observation I’ve made (without a shadow of a doubt) is this — Buying low is by far the most difficult and challenging thing you can ever do with investing!

It ain’t easy going against the grain… When Mr. Market (along with all your peers, family, friends, etc.) is telling you that your investment thesis is 1,000% WRONG, without question, you feel like a total idiot everytime you attempt to buy as you continue to accumulate and build up your position in whatever asset you are targeting…

With Ivanhoe Mines (IVN.TO/IVPAF), man, let me tell you, it sure as hell wasn’t easy buying up shares hand over fist during the fall of 2015 when the entire world hated mining stocks…

In fact, when you are observing the following NASTY, negative death spiral, seriously, who in their right mind would even want to attempt to catch such a falling knife?!?

Fundamentals be damned…

Indeed…

So, you can of course understand why in the fall of 2015, when I was pounding on the table about how ridiculously undervalued mining stocks were (such as Ivanhoe Mines), I lost a boatload of readers… with many questioning whether or I not I had completely lost all my marbles…

At a time when so many other bloggers and investors were fixated on cash flow/passive income alone, I assure you again that it was not easy in the least bit to go against the crowds and to do something that was pretty drastic from the norm (e.g. rental properties and dividend growth stocks)…

But after my own due diligence and research, I was convinced that market cycles ultimately win out, and again, it was back to the basics of, “buy low and sell high.

That, and as I believed then (and still do today), in the end, it’s total returns that matter most… In other words, yes, cash flow/passive income is the name of the game needed to sustain early FI (for perpetuity), but profits are profits, and net worth can indeed be converted into cash flow/passive income later on!

Convinced that I actually knew what I was doing, I embarked on a new path towards early FI…

I started buying shares of IVPAF… As many as I could…

When I was doing so, the stock chart of IVN.TO looked like this…

November 20, 2015.

Screen Shot 2015-11-23 at 6.15.34 AM

And now, a little over a year later, the stock chart of IVN.TO has recovered to look like this…

January 23, 2017.

My original cost basis was 65,000 shares of IVPAF @ $0.522 USD/share.

Along the way, I started to trim my position to reduce my cost basis, and by the start of yesterday’s trading session, I owned 50,000 shares of IVPAF @ $0.158 USD/share. In Canada (the native market), IVN.TO eclipsed C$4.00/share, at which point a strong SELL SIGNAL went off in my head…

I gotta tell you, when it comes to investing, the most difficult thing in the world to do is to buy low…

What’s the second hardest thing to do?

Sell high!

It is a NEVER ENDING struggle between Fear vs. Greed.

Nevertheless, I had to do what I thought was best for my own situation…

I booked my profits and cashed out all 50,000 shares of IVPAF @ $3.0149 USD/share, for net proceeds of over $150,000 USD.

Shares of IVN.TO/IVPAF are up over 57% YTD… and the first month of 2017 isn’t even over yet!!

And here’s the share price performance of IVN.TO over the course of 1 full year… Up 638%!

The stock is on fire! Can Ivanhoe Mines keep going up?

Fundamentally speaking, absolutely…

Ivanhoe Mines is backed by world class management, geologists, joint venture partners, investors, etc… and they have an ownership stake in three world class Tier-1 assets.

If I had to go with my gut instincts, I would speculate that C$5.00/share, C$6.00/share, and perhaps even higher are within the realm of possibility (and realism) sometime later this year for IVN.TO…

With that said, as I’m fully aware, my gut instincts are frequently wrong, and bottom line, when it comes down to it, I know absolutely jack shit about anything…

Your guess is as good as mine!

But I do believe that the markets ALWAYS have a way of humbling us, so really, almost nothing that happens from this point forward would surprise me…

However, at the aftermath of selling after an insane rally to start the new year, I would guess that many investors would conclude my actions of the day as being entirely too “conservative”…

Funny how that works, right? When I was buying up shares of Ivanhoe Mines at around C$0.65/share, so many people thought that I was the village idiot… Now that I’m selling out “prematurely” and into greed, I’ll probably be labeled as being too impatient…

It is what it is…

Here’s my own belief with investing — You’ll NEVER be able to perfectly catch the top and bottom… You just want to get into an asset when the downside risks are minimal and the upside potential tremendous… With Ivanhoe Mines, I’m exiting off the stage with realized gains (pre-tax) of $142,758.64

Yes, for some investors, this type of profit is indeed “peanuts” and “small potatoes”…

For myself, quite honestly, these gains (in a span of a little more than 1 full year) are more than I could have ever dreamed possible… Even after accounting for taxes and all that jazz, I should still be able to walk away with enough proceeds to either:

 

A) Fully pay off one of my rental units.

B) Purchase a new rental property with 100% cash and no loan.

 

Everything is relative…

 

In my eyes, this is a spectacular win, regardless of whatever transpires from here… And as of this moment in time, Ivanhoe Mines ranks as the single best investment decision that I have ever made in my life.

 

Better than the S&P 500 in 2009.

Better than Bay Area real estate in 2012.

Better than Tesla Motors (TSLA) in 2013.

Etc…

 

So, no, you don’t have to worry about any kind of Fear of Missing Out (FOMO) infiltrating into my mind… In fact, should shares of IVN.TO/IVPAF continue running up well passed $5.00/share, $6.00/share, $10.00/share, etc…, I do believe that my only thoughts will be, “Good for the company and its shareholders…

 

I will have no regrets…

 

Again, selling high ain’t ever going to be an easy thing to do… And I have no crystal ball…

 

I’m just doing what I think is best for my own unique situation…

 

And you should too!

 

Regardless of what anyone else thinks or says…

 

Fight On!

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Early FI – My Revised Thoughts (Nine Months Later)Portfolio Update: Reshuffling the Deck (February 27, 2017)Portfolio Update: Reshuffling the Deck (February 21, 2017)My Top Picks for 2017Chris Recent comment authors
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Jay G
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Jay G

Congrats! That’s one hell of a trade. I’ve never had anywhere near that amount of unrealized gains on the table, I’d probably be shaking in my boots afraid of losing it and would have sold out long, long ago. Stumbled upon your blog in the middle of 2016 and had never even considered investing in miners – now i’m completely hooked. Sure wish I was more “miner literate” back then. It’s been a wild ride, but after ~7 months of non-stop reading and researching, I finally feel like I understand the basics of the space. Anyway, just wanted to say thanks, congrats on the multibagger!

Buy, Hold Long
Guest

That’s one hell of a ride. I’ve been caught by trying to catch a falling knife before, so seeing this is always a welcome sight to me. All the best for the future.

desidividend
Guest

What a ride it has been,i had something similar with SCSS when it went all the way down to less than dollar and now its trading at above 20.But i didnt get to ride it full.

FinancialPhreedom
Guest

Greatest investment … so far! Congrats on the trade. The waiting for investments to pan out can be difficult, at least for me!

I’d be interested to see what you use you’re new capital for. Paying off a rental or buying a new one sounds like a nice bump to the passive income stream.

Dividends 4 Future
Guest

Those rides are good tests for the heart. I had a similar situation in mining also, VALE, bought it when it was crazy low, $2.15 a share, went up to $5.50 and I pulled out, its now at ~$10. Its all about the patience that I have none. 🙂

SG
Guest
SG

Congrats on the trade. I wished I had jumped into Ivanhoe a year ago.

A
Guest
A

Congrats! Is another option you may go with on your proceeds to invest in more stocks? Or are you mainly focused with your gains to go with one of the two real estate options you mentioned?

Wishing you the best,
A

Awesome
Guest
Awesome

Great trade and congratulations! It takes guts and conviction to bet against the grain, especially when the technicals are against you. Cheers to a job well done!

Tawcan
Guest

Nicely done. That amount of money will last you a while in Vietnam!

Roadmap2Retire
Guest

Beautifully executed, Jay! IVN is one helluva company and it mustve been hard to sell and book those profits…but when a sector and stock performs like this in such a short duration, you cant help but take the money off the table.

Congrats on this trade. You inspire us all 🙂

R2R

Tigua
Guest
Tigua

Hi Jay. Congrats on your success! I brought in late ’15 and ’16 between US$0.4 and $0.84 and took a free ride Oct 2016. My buy in was only $2.5K thought, not the same. But anyway, buying Ivanhoe in late ’15 and early ’16 when the company was selling for almost the cash in the bank, 3 world-class projects and Friedland was easier than almost any buy I ever made. It was kind of hard to find a excuse not too. Glad I did. But it’s much harder now. I took a free ride and have about $6K free carry but my plan was a long term hold and no doubt there is a lot of upside left over a number of years, this is so much harder than it was buying 😉

Best wishes and success

JP
Guest
JP

Congrats. I listened to you and made some money off of B2G and IAG. I picked I Am Gold because I liked the name haha.. The power of someone else doing your homework for you. Now, the trick is to never look back or you will drive yourself nuts. Even if Ivanhoe is at $10/share in a year, you still made money.

Reepekg
Guest
Reepekg

It can go one of two ways. I bought Vestas (VWSYF) at $6 after the recession played out and it is at $68 today. I’ll probably hold this trade of my life ‘forever’ because I like wind energy and its growth potential still.

On the other hand, I bought Tesla at $30 and sold at $90. I couldn’t sell fast enough to lock in that return, considering how much of the price is due to hype.

From what I’ve seen of the mining industry, taking your $$$ when the going is good seems like the wiser path. Congratulations!

Investment Hunting
Guest

So awesome. Trades like this will help with your word travels. Congrats.

Midwestern Landlord
Guest
Midwestern Landlord

Congratulations Jay. You seem to have real skill at finding deep value. Since reliable passive income appears to be a main goal of yours, do you have a monthly amount that you are shooting for in the near or long term?

cavemann
Guest
cavemann

Congrats on the awesome trade Jay. I too have problems with selling my stocks at the right time, often I have been way early. While you made a KILLING there, were you not tempted to maybe sell half the shares and hold onto the other half? As a fellow Invahoe investor (at a much higher cost than you) I don’t want to sell all my shares because I think the company is still on track to outperform. I am loathe to dump all the shares and lose out on the upside to come. Still being fearful while others are greedy doesn’t hurt when your profit is that much.

LeDividende
Guest

Congratulation.
Sometimes when you swing hard enough and are patient enough to wait for your pitch you can, and you did, hit a homerun !

Good for you.

Sharon
Guest

Sweet I just cashed out after reading this haha 😉 Thanks!

Joe
Guest
Joe

I sold out of most of an asset at ~$10 million. Have watched it subsequently run up to over $150 million. This may be a level at which there are some mild regrets… 😉

However it is still plenty to enjoy a life of leisure!

James
Guest
James

Congratulations Jay on your big killing. Your methodology towards FI appeals to me, and your blog gives readers lots of encouragement until we can achieve that goal. As for me, I love my career and would have a hard time leaving it. Maybe I would cut back and reserve more time for the family. But everyone’s definition of FI is different and that’s the beauty of engaging in this pursuit. I can’t wait to read about your next big return!

Paul
Guest
Paul

Congrats on that, fantastic achievement.
However, what about the overall picture…how about the other stocks that have gone down, what does the total picture look like today..? 1 stock that has gone up $150k, and 10 stocks that have gone down ??

Alesso
Guest
Alesso

“And here’s the share price performance of IVN.TO over the course of 1 full year… Up 638”
GREEEEAT deal!!!!
Congrats FI FIGHTER!!

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[…] However, you shouldn’t let some bad fortune/luck stop you in your tracks alone! Otherwise, you might miss out on some massive gains that will more than amortize your losing bets… […]

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[…] As for my other top two picks? Well, when it comes to Ivanhoe Mines, not much more needs to be said about what has been by far the greatest investment that I’ve ever made in my life… […]

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[…] Another one of these stocks (which I also don’t currently own in my portfolio), I think has significant exploration potential and is backed by someone (an industry titan and legend) who I’m quite fond of for helping me realize my greatest investment ever. […]

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[…] For starters, Cordoba has the best partner you could possibly ask for in High Power Xploration (HPX), which is a privately owned company spearheaded by Robert Friedland (arguably the greatest mine finder in mining history)… Yes, that very same Robert Friedland who rewarded me with my best investment ever… […]

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[…] mining stocks in 2015. In both cases, I ultimately ended up realizing over 500% plus returns on a few of these investments. If you give a fuck what other people are spitting in your ear, you’re doing it all […]

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