FDR and old-style shareholder value creationWhether I’ve covered this topic before or not, it bears repeating. In the case of most stock market plays, the investor is betting on timing at least as much as selection.
The best, most conservative paths to success are well known. You might wait in the weeds, Buffett-like, for a great company to stumble a little and go on sale. But you could be waiting many months or years using this strategy. And the bias toward action which infects most of us might cause us to miss the deep discount chance in favour of a slight sell-off.
Plus, timing is often a question of guaging general speculative appetite. And if it were easy to predict tops and bottoms of sentiment, everyone would be a market guru.
So much for timing. As to selection, while most investors simply prefer the strongest company in a given industry, some buyers do try to pick the winner in a crowded, emerging field where things are still in flux. Like electric vehicles a few years ago where some firms were still trying to give Elon Musk a run for his money.
In our industry, one could argue the “selection” is done by rating the exploration project (Antino), and the attendant pros and cons of the company pursuing it (FDR). But this understates the situation.
I have no idea which EV producer’s cars might *ever* rival Tesla’s. The technology is too complex, and indeed EVs might still be forced into worldwide retreat by a lack of charging infrastructure, lack of battery input minerals etc.
On the other hand, we all *know* why gold is popular, why it is now advancing - not retreating - in popularity, and, broadly speaking, what kinds of drill results (or artisanal output) suggest the likelihood of a mega-ounce deposit. It is much easier to understand our sector’s companies. Like a neon sign among faded, worn wall posters, FDR stands out so starkly from its contemporaries for a reason.
And the chain of causation is pretty straightforward. If we “prove up”, or even just “infer” a decently large set of deposits on Antino, FDR *will* be bought out. At a price per ounce that falls within a range established by general precedent, and then fine-tuned by recent specific local takeover deals.
All of which calculations are buttressed by the expected gold price. Which itself seems determined to keep setting ever greater highs. For concrete, logical reasons we all know and can probably recite easily and instantly if someone woke us up at 3:00 am.
In summary, FDR doesn’t need to invent something unique. Though applying the latest prospecting technology, as our team has been doing, certainly doesn’t hurt. Nor do we need to shoehorn our way into some existing market. Our road to shareholder value creation is broad and straight. We are like some kind of 1800s frontier venture, when the world was young and simple and benevolent. Receptive to people who could dream big and make things happen.
The people of Earth will buy all the gold ounces miners can mine - and then clamour for more. That’s how it works, for reasons too subtle and complex to review here… and which goldbugs all know well already. But I repeat myself.
Founders just needs to keep doing its “specialized” thing. In its usual outstanding manner.
Simple math, simple concepts, plus gold's long-established supremacy. And much fun ahead for FDR shareholders.