Some Takeaways from the Vancouver Resource Investment Conference 2021

China launches fleet of electric buses the size of the entire London bus fleet every month

Resource bull markets cause the bear and vice versa

This bull is different due to social media. Don’t need to wait for investment banks

New investors are more prone to the narrative than to the facts

Every generation has to get their ass kicked

You will have another chance to buy things cheap

Usually in resource bull markets. The best of the best move, then best of the rest, then single asset companies, and then penny dreadfuls. This time we went from best of the best to penny dreadfuls.

Bernard Baruch – The only guy who bought the bottom and sold the top is a liar

When you are old there is no need to do things that you do not understand.

Should always define how to declare victory or defeat in advance of placing the trade.

If the price of something doubles and nothing changes then by definition it is half as attractive.

Ask management how they will they convey value to the market and what it will cost. If they don’t have an answer, then walk away.

When the reason to own a stock goes away, the stock goes away irrespective of the price. Hope is not an investment strategy.

Number of speculations you own should correspond to the number of hours of work you are willing to do in a month.

Rick Rule is confused why someone will spend more time comparing tuna can facts than stock due diligence.

Buy cheap, hated, and already in an uptrend.

Uranium has an institutional memory.

2008/2009 – Financial Crisis causes recession. Leads to expansionary fiscal/monetary policy to boost economy.

2020 – Pandemic brings on government lockdowns which causes recession. Leads to expansionary fiscal/monetary policy to provide liquidity.

Insolvency crisis is next

Asset inflation not consumer inflation because money creation has gone to the banks and not the average person.

To have an alternative to USD you need a large alternative otherwise currencies will appreciate too much.

Must hope American ingenuity/entrepreneurship outweighs the stupidity of Washington.

More fragmentation of political parties to come.

Royalty companies at the end of the cycle to protect cash flows.

Sign of the late innings of the resource cycle is when companies can raise way more than they should be able to

Pandemic M/A slowed down due to inability to travel and get boots on the ground

Commodity prices always oscillate around the cost of production

Last gold peak there were 35 gold stock funds

Energy used to be a third of the S and P 500 now its 2.5%

Mining is a horrible business because the easy deposits have been found

Be right, sit tight

Margin debt all time high

With 50/50 Senate can’t lose your party, so extreme bills won’t pass

Interest, transfer payments, and military are 150% tax revenue

Risk is permanent loss. Volatility is temporary loss.

Easier to take Fed at word when they say rates will stay low than if they were to say rates will rise.

Money is store of value. Currency is not.

This is the first global gold rush. 2/3rds of the world could not buy in the 70s

You have to be careful when people are making money out of proportion to their ability.

Woke Culture – I love it when they arrest my enemies but then they came for me.

Bitcoin is not digital gold. Gold is not physical bitcoin.

People want 140 characters with the answer

Top 7 mining companies have copper and nickel as 2 of top 3 priorities

Governments hate losing monopolies.

Gold becomes unaffordable so inflows spill to silver.

Oil is dead when the US leaves the middle east.

Crypto then commodities then emerging markets

India

Dollar 80% trade and 25% GDP

Treasury Yellen is symbolic of the marriage between fiscal and monetary policy

A bubble is a bull market in which you don’t have a position

When things go wrong with a junior exploration play, sell.

Royalty is % revenue

Stream is % rock

Be ready to pivot this year

Time to take personal control of your money

The greatest way to create wealth is to make a concentrated bet. The greatest way to lose that wealth is to never hedge out.

Any contrarian ultimately wants to be in the consensus.

Don’t invest in what you want to happen.

Agriculture is a commodity less sensitive to recession because people need to eat.

Each asset class has its own DNA of volatility.

Study the 2 sigma vol of what you own

Public invests from the rear view mirror

JPM keeps 90 cents of every dollar they steal.

Holding dollars is like buying a ticket on the titanic after it hit the iceberg.

The Mystery of Banking by Murray N. Rothbard (pg. 159)

Here when the Fed purchases a bond directly from a bank, there is no initial increase in demand deposits, or in total bank assets or liabilities. But the key point is that Citibank’s reserves have, once again, increased by the $1,000,000 of the Fed’s open market purchases, and the banking system can readily pyramid a multiple amount of loans and deposits on top of the new reserves.

The Mystery of Banking by Murray N. Rothbard (pg. 153)

Still, despite its relative unimportance, it should be pointed out that Federal Reserve rediscount rate policy has been basically inflationary since 1919. The older view was that the rediscount rate should be at a penalty rate, that is, that the rate should be so high that banks would clearly borrow only when in dire trouble and strive to repay very quickly. The older tradition was that the rediscount rate should be well above the prime rate to top customers of the banks.

The Mystery of Banking by Murray N. Rothbard (pg. 118)

On the other hand, if there are only a few banks in a country, and the clientele of each is extensive, then the expansionary process could go on a long time, with clients shuffling notes and deposits to one another within the same bank, and the inflationary process continuing at great length. The more banks, and the fewer the clientele of each, then, the less room there will be for fractional reserve inflation under free banking.