Mining Sector is where i’m putting most of my available funds

Ok so like so many i’ve neglected to update my blog given everything else going on. New job, new home etc. I am reading as much as ever and adding to my ever growing watchlist of ‘potential’ companies.

I’ve been putting new funds into minting over the last few months. The whole sector has been an absolute disaster for investors over the past 18 months with concerns about global growth, access to funding/capital and falling prices for metals. Bombed out…. the perfect place to go looking for bargains.

The problem is that there are cheap miners out there….but they just keep getting cheaper. No-one can call the bottom, but at current valuations i’m thinking it cant be too much further (but i really cant back that view up).

What with the recent dive in the price of gold, gold miners have been hammered furthermore. I don’t know much about gold or what the price of it will be, but it seems to make sense to me that it will not stay below its cost to extract for long – currently somewhere in the region of $1150/oz  on average across the world. I also believe that the whole mining sector will pick up, metals prices will recover. Many companies will go bust, but pick the survivors and i believe you’ll have a multi-baggers galore.

Gold miners with the financial capacity to survive a short to medium term drop of gold below these levels are probably the safest bets (but then they arent quite as bombed out (cheap) as some of the less financially strong).

I want to remember the pessimism and valuations that exist now, because if and when things change, it’s easy to forget. It’ll reinforce my confidence as a value/contrarian minded investor.


Leave a Reply