What I mean by this is that for the most part, the mining sector is where money goes to die.
It’s a horrible preservation of capital. Contrary to what everyone claims, these stocks don’t typically act as good leverage to the underlying commodities, and nowhere else in the public markets are billions of dollars swallowed up without any return on investment.
To make matters worse, the smaller mining companies are filled with scammers and thieves who would sell their own mother a worthless piece of moose pasture if it helped them make a loonie.
I try and stress this to you as much as I can because the cockroaches in this sector are sophisticated ones, with great stories of grand wealth and glorious riches, but for most investors, they will not participate in any of the sector’s profits.
Your ONLY Hedge in the Mining Sector
Knowing that mining stocks are NOT investments for the long-term, there is a flip side with hope to this hated sector. Which is this, no other sector on the planet has the potential to turn average investors into multi-millionaires on very predictable cyclical upturns.
This is why every 5 to 7 years, you should consider entering this trade in a big way. How you can protect yourself and your money is with the people who you partner with.
Here are 3 crucial realities for investors looking to speculate in any mining stock:
1. Unless you’re a geologist or full-time mining speculator, it’s going to be nearly impossible to truly understand any of these projects.
2. Even if you understand the rocks, it takes a detailed search and very thorough investigation into who structured these deals and who the real founders are behind the corporate executives.
3. It’s a horrible business, and the companies are constantly depleting themselves of their products (minerals). Most importantly, most of the management teams suck! You would be surprised as to how many of the CEOs have no clue as to who their major unreportable shareholders are and why their stock always sells off into strength.
The mining sector can be extraordinarily profitable, but the truth is you need to become a people picker, not a stock picker.
Of the less than 1% of mining teams that make a discovery, very few of those same teams go on to make a second and a third. With some of the people we’ve introduced you to, they’ve gone on to a 17th!
Yet 99%-plus of geologists will never make a discovery in their lives.
Of the handful of mineral discoveries, according to Casey Research, only 1 in 3,000 ever actually produce anything!
It’s why when we introduce you to mining entrepreneurs who’ve already achieved great success, and perhaps have done it more than once, I want you to attach your money to them if you decide to invest in these types of stocks, because you truly need to partner with the unicorns of this space. Otherwise, I am almost certain you will lose money.
2017 is going to be a great year for mining. We are seeing the upturn unfold now, the gut-wrenching volatility is normal, and just as the case was in 2016, the high-quality management teams and people invested in them are going to lead the entire sector for one simple reason.
The Rick Rules of the world, the world’s wealthy, are going to not just pour their money into a tiny sector, but they are going to flood into a sliver of the sector… The 15 to maybe 30 companies run by the great people of the industry.
I look forward to an exceptional year for our readers.
This is a time to partner with the right people, position ourselves for the upturn, and then after you’ve seen some very sizable gains, sell your shares, moving on to new opportunities or transferring the profits to more stable investments, like rental property, private lending, or holding a large cash position that will help you sleep like a baby.
2017: This is the moment you’ve all been waiting for.