Disclosure: The following represents my opinions only. I am long every stock in this post (Image credit to Sam Schooler on Unsplash)
Over the years, I’ve spent a lot of time, looking at a lot of companies, in a lot of jurisdictions, covering a broad swath of the commodity complex. Sometimes I feel a bit like an antique hunter who goes through the back shelves of thrift stores looking for hidden treasure… and when I think I may have found it, I’ll take it home, polish it up, and see if it’s the real deal. When the antique store is busy, it gets harder to find those treasures as more shoppers pore over the same shelves. When it’s quiet, quality finds can linger on the shelves for what seems like forever… but alas, a guy can only carry so much at a time.
You can probably see where I’m going with this analogy. We all know the market hasn’t been kind to most investors this year. Even the bullet-proof “60/40” crowd has had a religious experience in 2022. Market participation and willingness to speculate are both anemic, leaving the TSX Venture, arguably the ultimate measure of speculative appetite, down about 35% year to date. With that in mind, how well picked-over do you think the junior resource stocks are right now? From my perspective, there are so many interesting things in the bargain bin that I’m feeling about as hopeful as I was in May of 2020. Many junior stocks are right back to where they started their last runs, or below, some deservedly so; and some not so much. Based on my experience, the market’s ability to differentiate between well-founded speculation and wild-ass speculation is questionable at best, so when the juniors are in the dumps, I sharpen my focus to see what I think is being overlooked. To be sure, companies that do not deliver on their plans earn their declines, but those who do deliver — or just haven’t delivered “yet” — and have been punished anyway is where I’m focusing my energy.