RE:RE:Mining stocks are for foolsI should say more here.
Companies who treat their shareholders as a flock to be fleeced through dilution and massive share-based compensation are dung and likely always will be. Their aim is to generate salaries, and shareholder value isn't even an afterthought.
Take note of companies who pay special dividends when metals markets present windfalls. Few Canadian miners do this (homework exercise -- Lundin? Teck?); it's more common among the long-established global behemoths like Glencore.
.
TickerTwit wrote: There are a handful of miners that are a class above. Lundin and Teck come to mind. They've done well because (1) they have good assets and (2) they manage their assets well.
.
AlfTanner wrote: Mining stocks are terrible investments. They always go down in the long term. Most investors would be much better off holding actual metals. That is difficult with metals like zinc and copper, but at least silver and gold are relatively easy to store.
Just look at gold vs. the GDX over the last 15 years. Gold is up 170%, but the GDX is flat. Part of this is because the metals tend to go up with inflation, so they have a constant tail wind. Miners, on the other hand, have a constant head wind. They endlessly dilute to raise money whenever the market is poor or if they need to finance new development. Their assets are constantly depleting and depreciating. Their costs go up with inflation, so profitability does not necessarily increase when metals prices increase. Finally, and worst of all, many miners are run by bone headed management.