Mining Stocks – Looking for Opportunities (August 22, 2018)

It’s been a very tough year in the world of mining stocks. As someone who has followed the sector actively since summer of 2015, I guess you can say that I’m really not all that surprised, on the whole…

Cycles and waves.

It always comes back to that…

It’s just so crazy, because no one out there has a crystal ball… and if you might recall, during the start of this year, euphoria was running high, everyone was making $$$ hand over fist, and it was pretty much “celebrate good times” across the board…

I’ll never concede and admit that I know what I’m doing… In hindsight, I made the right decision to trim a large chunk of my portfolio back in January, but I mean, it was more due to luck than anything else…

Reading macro trends and anticipating how the market is going to act and adjust is just an impossible task… The only thing I know that really works for me has always been:

Buy low and sell high.

It may sound trivial, but I can’t repeat it enough, because here’s where we stand today…

  • Ivanhoe Mines (IVN.TO/IVPAF) is down -46.9% year-to-date.
  • Nemaska Lithium (NMX.TO/NMKEF) is down -68.5% year-to-date.
  • eCobalt Solutions (ECS.TO/ECSIF) is down -58.5% year-to-date.
  • Etc.

From the January highs to now, it’s really some astounding stuff (destruction), indeed…

Now, I know it’s very easy to get freaked out, panic sell, and just want to bash the sector for always perpetually disappointing us, but hey, what can you do?

That’s just how the game goes…

Mining stocks are nothing more than trading vehicles we can exploit… you know, use to our advantage to make $$$ if we’re disciplined enough to NOT chase markets, and instead, wait patiently for opportunities to present themselves to us…

Buy and Hold Rentals” is what I like to call em…

Wait, what!?!

Don’t tell me you’re too chicken shit to start thinking about nibbling away now but you were throwing money into these stocks with reckless abandon back in January when every stock in the sector was eclipsing new record highs?!?

Yeah seriously, the above human behavior/psychology/tendency to make those dumb fuck type of decisions never ceases to amaze me…

Perhaps, because mining stocks have served me so well in my own journey to early FI, maybe I’m a lot more partial to them than the next person…

But most definitely yes, “timing” is EXTREMELY important, and that’s something that although we don’t always get right, it’s a skill we can refine through experience/practice/discipline…

For myself personally, it’s no secret and I’ve already said this a trillion times — I really hate mining stocks. And if I had my way, I would be done with them forever… and that almost happened after the run-up in January… But I guess not surprisingly, the sector decided to more-or-less go belly up again (go figure), and here we are today, with a plethora of buying opportunities staring right at us in the face… again.

Sigh… I am so tempted to just turn away and hit the “ignore” button, but it’s so tough to resist these deals!

Now, when it comes to gold/silver/precious metals, those most hated assets almost feel like they are ALWAYS on sale… so, nothing new there… Precious metals mining stocks (not the actual physical metals themselves) are perennial losers, and the worst long-term “investments” you could ever think of… But hey, they are piss cheap, so even I can’t rip em all that much…

I love accumulating cheap (QUALITY) goodies…

However, when it comes to lithium/cobalt/clean tech stocks, what can I say, other than I’m starting to salivate a bit at some of the bargains out there…

Anytime you got a fantastic looking backdrop and beaten up shares (can you say disconnect and major dissonance), I get amped up!

 

I’m about as bullish as they come when we’re talking about the electric vehicles (EV) revolution!

Had you told me back in January that we would be sitting here right now, with some of the “best of the best” merchandise selling at these low prices, I would have been flabbergasted to say the least…

 

Nemaska Lithium (NMX.TO/NMKEF) is trading at C$0.74/share.

Ivanhoe Mines (IVN.TO/IVPAF) is trading at C$2.25/share… and even slid to as low as C$2.00/share, most recently!

eCobalt Solutions (ECS.TO/ECSIF) is trading at C$0.81/share.

 

My, oh my… Yes, I fully realize that mining stocks are highly speculative and very much a “gamble gamble” type of proposition, but for anyone who even knows a smidge about the industry, you’re probably aware of those above names because they are some of the more proven and advance-stage development projects out there…

I don’t think anyone really has any doubts that Ivanhoe Mines and Nemaska Lithium will make it all the way through to full production… eCobalt Solutions I would say is the riskiest of those 3 plays, but still has very good odds of crossing the finish line…

So yeah, I’ve really learned a lot this year… OMG, in many ways, this smackdown in commodities/metals really is reminding me of late 2015… For anyone who remembers (that was awhile ago), that’s when I was giddy as could be and buying up many beaten up miners for pennies on the dollar…

The rest as they say, is history… In a span of oh I dunno 2.5 years, I made $1 million in profits playing in this stupid game of mining

If I have too much of an affinity for mining, I’m sorry, I am a bit biased here… Although I realize the space can ABSOLUTELY REKT investors and as an aggregate it’s just a money-pit type of environment (on the whole), on occasion, the sector really does provide some incredible opportunities…

No, absolutely, I don’t think things are anywhere near as bad as late 2015/early 2016 right now… but it almost feels like with the USD continuing to strengthen so much that we’re fast heading in that direction…

Last time around, this happened — I made $142,758.64 trading shares of IVPAF.

From January 24, 2017.

It seems like ages ago, but in early January 2017, I closed out my position in Ivanhoe Mines, selling off shares at C$4.00/share ($3.0149/share)…

And now IVN.TO is back at C$2.25/share!

Crazy, crazy…

Funny enough, some bold folks out there are smelling blood and not scared the least bit…

In fact, my buddy just pinged me with this text message…

 

Timing is everything.

And so is price.

One person’s trash is another one’s treasure.

 

Hard for me to believe, that right now, some of the “best of the best”, HIGHEST QUALITY names in their respective sectors are trading at/near 52 week lows!

 

Buy low and sell high.

 

Easier said than done, of course…

 

But hey, if you’re gonna dabble in mining stocks, you have to do it… Otherwise, you’re likely to get slaughtered very badly.

 

My spider senses are telling me there’s still not quite enough blood in the streets… yet…

 

But damn, we are certainly getting there!

 

Happy Hunting!

 

P.S. Yes, I have been adding shares of: Nemaska Lithium, Ivanhoe Mines, and eCobalt Solutions to my portfolio.

 

I own no shares of Pilbara Minerals (PLS.AX/PILBF), but this is a lithium bellwether, so of course, I am keeping my eye out for a buying opportunity.

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