What a weird year in mining stocks it’s turning out to be… In 2017, it’s all about early stage exploration baby! And if you’ve got some lithium and cobalt sprinkled in, hey, that’s working out very nicely for you too! Deep value gold plays on the other hand? Not so well, unfortunately…
It’s the year of bifurcation….
And I’ve certainly experienced some bizarre performance in my own portfolio year-to-date…
Here’s a snapshot of year-to-date returns for various companies (not my actual returns)…
- Garibaldi Resources (GGI.V/GGIFF) has risen 2,930%.
- Novo Resources (NVO.V/NSRPF) has risen 800%.
- Critical Elements (CRE.V/CRECF) has risen 252.9%.
- eCobalt Solutions (ECS.TO/ECSIF) has risen 100%.
- Balmoral Resources (BAR.TO/BALMF) has fallen -27.8%.
- Sarama Resources (SWA.V/SRMMF) has fallen -52.5%.
Here’s another idea, AVZ Minerals (AVZ.AX), that is most certainly working, up over 1,485% this year!!
It’s just… weird…
What do I try and do?
Balance out the portfolio with stocks that I think represent deep value plays (which should turn around and outperform at some point in the future), and to try and go hunting for the next big exploration success story.
Seriously, who doesn’t want to find the next Garibaldi Resources, Novo Resources, or AVZ Minerals?
It’s like a game of baseball, as I often describe it…
You won’t win them all… many picks will blow up in your face.
But when you do succeed, the winners will not only amortize your losers but still mange to produce a very healthy overall rate of return for the portfolio (hopefully, that’s the plan) that makes the whole ordeal worth all the work!
I mean, I’ve been hearing stories about shareholders who own GGI.V/GGIFF, who are up $100k to even $1 million in gains this year!
That’s life-changing success we are talking about here!
So, I’m not about to hate on early stage exploration… The market clearly loves it this year… no assays and all! 😉
With that said, if you really want to be a contrarian right now, going after the boring/hated/forgotten stories like a Balmoral Resources, Sarama Resources, and many others, perhaps could pay off lucratively in the future as well… These are more “beta” plays, and really need sentiment towards the sector and underlying commodity (in this case gold) to improve profoundly for these share prices to recover strongly…
As always, when sentiment returns/goes out of favor, is anyone’s guess… It’s extremely difficult to try and time these things, which is why I hedge my bets and play in many different sectors: gold, silver, copper, lithium, cobalt, nickel, etc.
Some stories have clearly worked in 2017, and many others have not… The easy gains of 2016 (a rising tide lifts all boats) are by and large not to be found in mining stocks, and we’ve all had to do a bit of extra work this year to try and generate robust returns…
Congrats to shareholders who have made boatloads of $$$ this year, and hang in there to the folks (like myself) who have gotten sucker-punched in the gut and are holding out for better days.
Photo Credit: Artemis Resources