Mark Twain said that about 160 years ago. That was a long time ago, before rules, regulations and security commissions were in place to protect investors. Tell that to Bre-X investors. Back in 1997 Bre-X, a Canadian company, claimed to have a 200 Million once gold resource in Borneo. Fortunes were made on the way up and wiped out when it was discovered that gold had been blasted onto the walls of the mine with a shotgun. It was a big story in the late nineties.
I wasn't involved in Bre-X. HudBay Minerals - My BIG Mistake tells the story of my first mining investment. This wasn't a story involving fraud or deceit, rather it was about a very successful miner and an overheated commodities market. When I bought into HudBay the company was debt free, had half a $Billion in the bank and was churning out free cash flow at the rate of a $Million a day. When the bottom fell out of zinc prices I sold, took the lose and moved on.
Since HudBay I've enjoyed some success with mining stocks most of which I've written about on these pages. A couple times it was all about timing. I bought Fording Coal (FDG.UN) just days before a takeover offer from Teck Cominco, now Teck Resources (TCK-A). I had similar dumb luck with my coal miners late last year. I bought Western Coal (WTN) and Gande Cashe (GCE) just a few weeks before a takeover offer for Western dragged the whole sector up. Of course, my biggest success with miners was Scorpio Mining which was my first ever and one and only double.
I've gotta fess up, they're not all winners. Right now I'm holding a mining stock that's under water. One day, while listening with one ear, the analyst du jour on BNN recommended Evolving Gold (EVG). Without doing any research I logged onto my trading account and placed a buy order simply because I had a bit of money left after couple of recent trades. What I later learned is that Evolving doesn't have a mine...just exploration sites in Wyoming and Nevada. I paid $1.28 that day and they've never there since. I now have a rule, I don't buy a miner unless it actually has a mine. I'm going to leave the junior exploration companies to the young guys who are prepared to take the chance that one in ten will actually turn into something.
I wasn't involved in Bre-X. HudBay Minerals - My BIG Mistake tells the story of my first mining investment. This wasn't a story involving fraud or deceit, rather it was about a very successful miner and an overheated commodities market. When I bought into HudBay the company was debt free, had half a $Billion in the bank and was churning out free cash flow at the rate of a $Million a day. When the bottom fell out of zinc prices I sold, took the lose and moved on.
Since HudBay I've enjoyed some success with mining stocks most of which I've written about on these pages. A couple times it was all about timing. I bought Fording Coal (FDG.UN) just days before a takeover offer from Teck Cominco, now Teck Resources (TCK-A). I had similar dumb luck with my coal miners late last year. I bought Western Coal (WTN) and Gande Cashe (GCE) just a few weeks before a takeover offer for Western dragged the whole sector up. Of course, my biggest success with miners was Scorpio Mining which was my first ever and one and only double.
I've gotta fess up, they're not all winners. Right now I'm holding a mining stock that's under water. One day, while listening with one ear, the analyst du jour on BNN recommended Evolving Gold (EVG). Without doing any research I logged onto my trading account and placed a buy order simply because I had a bit of money left after couple of recent trades. What I later learned is that Evolving doesn't have a mine...just exploration sites in Wyoming and Nevada. I paid $1.28 that day and they've never there since. I now have a rule, I don't buy a miner unless it actually has a mine. I'm going to leave the junior exploration companies to the young guys who are prepared to take the chance that one in ten will actually turn into something.
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