Past winners and loosersWith the SP of GENM as low as it is, I find myself questioning my hypothesis over and over and over again. Could I be wrong? What have I missed? So today I was thinking about past winners and loosers in my investing life (mining related).
People often tout the efficient market hypothesis, that the 'market is always right'. I don't subscribe to that theory. Example is K92 mining. When the MC was $300 mill, most watchers of the company knew the resource was there even if it was sparsely drilled. Debt was small, and they were just getting started mining. Now the MC is $2 billion. What has changed? They have not generated close to $1.7 billion in cash, no, but management has delivered on its promises. I saw the SAME potential back at MC $300 mill as I see now. It's just that MORE people see it now.
A huge looser I was involved in was BLK (ugh, I can hardly type that name). It was in a similar situation as K92 at one stage, except management failed at every damn step along the way it was comical. I can't begin to describe what an unmitigated disaster that management was. Let's just say that hope is NOT an investment strategy. It will drive you mad and loose you a lot of money. Sure there was potential, but none of it was realised. That was a hige sting to me personally, and I am very hesistant about any company I invest in after that experience. Thankfully in investing, you can't loose more than 100% if an ivnestment goes wrong (It wasn't quite 100%, but it was close!), but you can make up for it with 5, 6, 700% gains if you get it right!
There have been a couple other development plays that I exited on par, none of which made good on promises, either because of lack of infrastructure (not feasilble to develop), or jurisdictional issues (hello latam).
The 'one that got away' for me was Champion Iron. I knew of what Michael O'Keefe did in the last supercycle in coal, and I knew he had bought Bloom lake for a song. I thgouht I would have a chance 'later', but then I missed the damn boat! He did what he said he would do, brought that old mine back into production and CIA is KILLING IT. Damn it! Lesson learnt. I try not to dwell on it, as what has been will be again, I just have to be ready and find that investment.
Which brings me to GENM. People on this board see the potential. I believe a big factor in the SP being so low is that FEW people see the potential. Now there are a lot of projects that have flaws that management doesn't advertise (would you?), but the insider buying would suggest that Marathon is not one of those. If a geo buys shares in his own company that's one thing, they are optimists. If an engineer buys shares, that's another thing, they are pessimists. Management has also delivered on everything they have promised to far. That is SO impressive in my view.
I thought the Sibanye decision would be a catalyst (well it was but...), and we got a good result in my long term view, obviously a lot of traders exited. Disclosure, recently I have added, and I will attempt to buy some more in the coming weeks. If Kerry is right about financing and avoiding huge dilution, surely that would be the catalyst we need to realise the value we all see. The difficulty is that as much as I try, I want the SP to confirm my hypoethesis. We can all look back at winners and 'wish we had bought more', as if it was sooooo easy back then, but the fact of the matter is that it isn't. We have all read about the successes in jr mining, and they are all similar in that it must have felt very lonely buying when the SP was low. So, I would like to hear about other experiences others may have had, good and bad. What was learnt? What can we look for, what to avoid? It would be a very useful learning experience I think, not just cheerleading for a stock. I'd also be interested to find out what other jr miners others are in, if you don't want to cross promote feel free to DM me! I don't mind sharing what companies I'm in, all 6 of them!
Cheers