I'm here in Toronto at the Prospectors and Developers Association of Canada (PDAC) conference – along with our small cap analyst Tyler Laundon – to try to find compelling opportunities in the junior resource sector.
In case you've missed me blabbing about the PDAC over the past few weeks – it is the largest mining conference in the world, held in Toronto every year.
I have a few leads, but nothing concrete yet. The problem is that there are hundreds of presentations hosted by talented CEOs and geologists from just as many junior mining outfits – all of whom would love to garner the attention of you – the Resource Prospector readership.
These people are accomplished liars and fabricators. I can't blame them for trying. If they can't raise capital or at least get some volume in the trading of their shares, then they'll likely have to fold up their tents. They won't be back at next year's PDAC – at least, not with the same company.
So before I talk about any of the many compelling investment ideas I'm encountering – it's my duty as your guide through these dangerous waters to remind you as frequently as possible about the actual dangers we face as junior resource investors.
Note that most of the investments I bring to your attention in the pages of the Resource Prospector are NOT juniors.
That's because most of the time, it's far easier and usually more profitable for you to focus your time and money looking into mid-cap or blue-chip type commodity opportunities.
(Note also that I'm not referring to your average Torontonian as a liar – I've had nothing but great experiences with the locals and I recommend taking a trip to Toronto during warmer weather months if you ever get the chance – it's clearly one of the great North American cities.)
But junior mining outfits are different from nearly any other publicly traded investment. They're fast moving targets. Most of them will experience massive gains at some point of their life-cycle – but then most of them also go bust too. And I'll go over some of the ways you can make massive gains in this sector – but for today, I want to remind you to exercise caution.
There's no such thing as a must-buy junior resource company. These are the taxis of the investment world. Miss one and you won't have to wait long for another one to come along. And just like 1 in 100 taxis might have a $20 bill tucked into the seat when you get in – only 1 in 100 junior resource companies will ever pan out in a big way.
So we have to be extremely selective, careful and diligent.
To be honest – I could write to you every day to tell you to avoid junior resource companies altogether and still pat myself on the back for a job well done. Most investors shouldn't buy these things. Most investors don't do well. Most investors should focus on safer investments.
But if you have some risk capital in your brokerage, consider dipping a toe into the juniors.
I'll be dropping names of companies throughout the week – so please stay tuned.
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