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started in January 2016 that saw +160%
returns followed by a three-year sideways-
to-down move that ended late this past
spring. This causes us to believe the best
years lie ahead for investors in this sector.
However, investments do not go up
in a straight line and in early August we
warned that short term technicals were
deteriorating and traders (which we tend
not to be) should prepare themselves for
some short term sideways-to-down action.
This has occurred and now we believe
we are close to corrective lows and this
short sharp correction has seen most of the
short-term damage. (See top chart)
This leads us to one of our favorite sec-
tors of the metals markets – Explorers and
Developers. In Canada, we are blessed with
an abundance of rich resources that are for
the most part, hunted for by smart, hard
working men and women that are working
12-16 hour days in the short season they
have to work. They are constantly training
to better understand the districts they are
working in. Here in British Columbia, the
exploration season is more than half over
and soon we will begin to receive assays.
It is an exciting time for investors
beyond the ups and downs of day-to-day
trading. The goal of these explorers is to
discover economic deposits that will one
day replace depleting resources.
Of interest to this writer are this sum-
mer's results from British Columbia's Golden
Triangle where receding glaciers and new
geological theories are helping geologists to
tap into this vast, mineral-rich region.
Investors are reminded that patience is
often required to reap the rewards of min-
eral discovery.
n
John Newell is a portfolio manager at Fieldhouse
Capital Management. He has 38 years of
experience in the investment industry acting
as an officer, director, portfolio manager and
investment advisor with some of the largest
investment firms in Canada. Newell is a spe-
cialist in precious metal equities and related
commodities and is a registered portfolio man-
ager in Canada (advising representative).
778-330-3008 John.Newell@fieldhousecap.com
