„Nobody ever got rich through diver­si­fi­ca­tion“ — Lessons learned from 10 years of inves­ting in gold mining stocks

1. „No one has ever become rich through diversification“.

Invest in ever­ything and diver­sify widely is a common advice from the finan­cial industry. Don’t be fooled, because you won’t get rich by doing so. To diver­sify is to admit not knowing what you are doing. Or as Warren Buffett says: „Risk comes from not knowing what you are doing.“ If that is the case, rather not invest at all, educate yourself and sign up for our Private Placement List.

GMN Insight: We do exactly the oppo­site of diver­si­fi­ca­tion = strong concen­tra­tion on a few, but care­fully selected stocks. We know these stocks extre­mely well and sleep very well despite high capital invest­ment. Curr­ently we are holding two large port­folio positions.

2. Higher return = less risk

The common economic theory says that a higher return is only achieved by accep­ting more risk. However, in the commo­dity markets, other laws apply. In our opinion, the higher the possible return of indi­vi­dual stocks, the lower the risk of loss of a portfolio.

GMN Insight: If you are right about an invest­ment that gene­rates a 500% return, then you want to profit from it to the maximum and have real asset growth. It is no use if you then have only 5% of your port­folio invested. However, if you have 25% or more invested in a stock and it quin­tu­ples, then you have more than doubled the capital of your entire port­folio with just one investment.

3. Extreme pati­ence and extreme determination

Not taking action is often the best option. Many inves­tors over­esti­mate doing versus doing nothing. Be extre­mely patient, rarely act, and when you do, act with extreme deter­mi­na­tion. The investor with the grea­test amount of pati­ence and emotional resi­li­ence to market fluc­tua­tions wins.

GMN Insight: During the holding periods of some of our most successful invest­ments (e.g., Claude Resources, Atlantic Gold) of over 1000%, the stock prices of the compa­nies went side­ways for over two years at times. It takes a funda­mental convic­tion for an invest­ment, its poten­tial and manage­ment to remain unper­turbed by falling prices and, ideally, to re-buy.

4. Buy what nobody else buys

You will achieve the grea­test returns if you buy asset classes/stocks that no one is curr­ently inte­rested in. As soon as these become en vogue, you are already posi­tioned and a few % up. In short: When the main­stream media talks down an asset class or stock, you should look closer.

GMN Insight: From 2016–2019, hardly anyone cared about gold mining stocks. Main­stream finan­cial media was focused on ETFs, Wire­card and tech stocks. We couldn’t think of a better situa­tion and made very good money on Atlantic Gold or Kirk­land Lake Gold even when gold prices were side­ways. Curr­ently, rela­tively few inves­tors are inte­rested in uranium stocks. We will there­fore shortly intro­duce a Uranium Private Placement in order to be posi­tioned early for rising uranium prices.

GMN Private Placement List

Using the Private Place­ments common in the commo­dity sector and our pre-selec­tion, you will auto­ma­ti­cally meet the above criteria and have an edge over market parti­ci­pants who do not have access to Private Place­ments. Register here for our private placement list and invest toge­ther with us.