Erik Wetterling – Value Investing Versus Trading – Having A Coherent Strategy In Junior Mining Investing

Erik Wetterling, Founder and Editor of the Hedgeless Horseman website, joins us to share his perspectives on being a contrarian value investor in junior mining investing, versus the more common sporadic trading approach based on sentiment and momentum.   We review, once again, that despite the higher gold and silver prices, and movement in the larger cap producers and royalty companies, that most of the junior stocks are still lagging and not confirming these moves higher in the metals.


Erik contrasts some of the valuations we saw pre-discovery in previous frothy periods of speculation in junior miners, and contrasts that to the present environment we bad news is severely discounted, and even good news only produces muted responses, if any.  He continues to see unrealized value in juniors across the board, but especially in those companies that are continuing to derisk projects and that are conducting meaningful work, but are not getting rewarded for it.  Eloro Resources (TSX.V: ELO) is one company he highlighted as an example that just put out one of their bear drill holes to date with little reaction.

Click here to visit Erik’s site – The Hedgeless Horseman.

    Mar 10, 2022 10:24 PM

    Thanks, Erik. I topped off my holdings in ESK, LAB, NFG, and LIO this week.

      Mar 11, 2022 11:08 AM

      Velcome Bonzo!

      LIO and NFG have probably done more than the other two that has not been discounted so really like them. If LAB gets an “NFG” type hit then that could really fly. Eskay is my largest position and I think this coming field season will be even more exciting than 2021 but it’s not cheap at face value… With that said they own so much of prime ground!

        Mar 11, 2022 11:28 AM

        Thanks again, Erik. What are your current thoughts about NuLegacy and Novo?

    Mar 10, 2022 10:41 PM

    This is it! The USA has set the stage for the Criminals on the COMEX to declare “Force Majeure” and close out their naked short positions in gold…AND SILVER!

    We always knew that in the end the Banksters would NEVER cover their shorts and now they have an excuse…IT’S RUSSIA’S FAULT!

    Hang on tight to your metal!

    SILVER ALERT! USA Blocks Russia Gold Sales and Sets Up COMEX “Force Majeure” END GAME!! (Bix Weir)

      Mar 11, 2022 11:07 AM

      No issues Jerry, we have all we need in the canyon.

        Mar 11, 2022 11:13 AM

        That seems to be the story……… Old Bix , likes to advocate…. 🙂

    Mar 10, 2022 10:53 PM

    Been a good few days……kodiak is moving up nicely with a pickup in volume….been selling my short term winners and buying some more impact…..keep the charts coming please Matthew…..uranium at $60/lb now ( at least that’s what trading economics site said) and the stocks had little reaction today.

    Mar 10, 2022 10:43 PM

    Welp, US Senate just passed another trillion & a half spending bill. Guess they’re counting on inflation being transitory, until it’s not

      Mar 12, 2022 12:47 AM

      If they print up another Trillion dollars from thin air, then by default that is inflationary. The government and Fed is well aware of this and have been all along. Their “transitory” argument was a convenient narrative meant to jawbone people in a false sense that it was only pandemic related, and only suckers fell for that load of nonsense. They positioned it that way so there wasn’t a stampede out of bonds, because why in the world would you want to hold a treasury note paying you 1.5%-2% if inflation was going to be 3%, 4%, 5%, 6%, 7%, 8% + ? (answer: no rational person would). So therefore, transitory was basically a dog whistle to tell the markets, “don’t worry this will all pass…. hold your positions.” Obviously it was a lie, and yet amazingly, most suckers on Wall Street and most “economists” fell for it. Well, as the saying goes…. “truth will out.” And boy did the truth ever come out… the CPI reading this Thursday was 7.9% headline inflation in prices, and that’s based on the crazy way they measure it. Remember when 3% and 4% was just going to be transitory last year? Yeah…. no.

      The creation of new money is the issue, not just supply chains, or year over year or month over month base effects. Inflation is showing up everywhere in life (not just the limited areas the CPI readings measure), and in larger percentages than what is being reported, because people’s purchasing power is eroding.

    Mar 10, 2022 10:05 PM

    Does Erik buy sheep ?

      Mar 10, 2022 10:23 PM

      “Cheap” It’s a drinking game. Every time the Hedgeless Horseman says “cheap” we take a shot of bourbon.

        Mar 10, 2022 10:36 PM

        That explains it.

        Mar 10, 2022 10:38 PM

        I got a hangover thinking about it!

        Mar 11, 2022 11:57 AM

        And what are we supposed to do when he says sheep????😏

          Mar 11, 2022 11:27 AM

          Hopefully not get excited for the wrong reasons….:)

          Mar 12, 2022 12:28 AM

          Keep in mind English is not Erik’s first language, so I think he does a pretty good job overall.

          If he says “cheap” you take a shot, if he says “sheep” you pair it with a fine cheese made of sheep milk and crackers.

    Mar 11, 2022 11:16 AM

    Gold 1965 : First Support : Will It Hold?

    Mar 11, 2022 11:09 AM

    FREAKY FRIDAY ………….. Again…………..

    Mar 11, 2022 11:58 AM

    London Fix……. seems to come earlier…… now…….. should be interesting how gold ends the day…… jmo

    Mar 11, 2022 11:44 AM

    from zerohedge………..
    “Gold mines are literally gold mines.” – Peter Schiff

    I started this article with gold at about $2,050 and am finishing it with gold back under $2,000/oz, at about $1,991/oz. Such was the chaos that was the paper gold market over the last 48 hours. Regardless of where gold is trading when you read this, it doesn’t matter.

    First and foremost, it finally looks like we are getting ready for gold to trade with a $2,000-handle relatively consistently.

    Imagine that: $8 trillion on the Fed’s balance sheet, $30 trillion in debt and all of academia unanimously deciding that modern money literally has no substance to it – and we still needed a potential Third World War to get back over $2000 per ounce.

    Yeah, nothing weird going on in the paper markets, right?

    Mar 11, 2022 11:33 AM

    EXN- SOLD IT ALL (1200) @ $1.55

    Mar 11, 2022 11:55 AM

    I would like to add that Eric is one of my personal favorites. I like his honesty and have always been impressed with his fluency in English as a second language
    Keep those interviews coming!

      Mar 11, 2022 11:23 PM

      Hi Lake, I concur. DT

        Mar 12, 2022 12:32 AM

        Agreed guys. It is great getting Erik’s thoughts most weeks, and I’m always interested to see how he is sizing up risk/reward scenarios in the junior miners, which companies he feels are doing good work, and his contrarian value investing approach. Good stuff!

    Mar 11, 2022 11:32 AM

    Rule Of Law Breaking Down
    March 9 (King World News) – Garic Moran: We now have Canada freezing bank accounts, US freezing international reserve assets, and the LME (London Metals Exchange) cancelling trades that hurt their brokers. Things are moving fast; the rule of law is breaking down in our financial system: not good.

      Mar 11, 2022 11:36 PM

      Canada never froze bank accounts, The Bankers met with Justin Trudeau and Chrystia Friedland the next day and told them that the people involved with The Trucker’s protest and others were pulling their money out of the banks, Trudeau backed down. They were afraid of causing a 1930’s run on banking. That doesn’t mean they won’t try it sometime in the future. DT

        Mar 12, 2022 12:38 AM

        Yep. Nothing scares the banksters like a good ole’ bank run. Apparently this raised the eyebrows of US banks as well and some people reported having issues taking larger amounts of money out of their banks on withdrawal. It’s your money, but the banks tell you how much you’re allowed to take out, and now national governments are suggesting they can freeze your money if they don’t like your point of view. Really scary and it’s shocking that more Canadians were not uniformly outraged at the suggestion.

        This only builds the argument even further to get different forms of capital outside of the traditional fiat system in precious metals, crypto, or stored in real tangible goods and assets.

    Mar 11, 2022 11:51 AM

    GPL doing great again today. Heading north to fill another gap before a well earned rest.

    Mar 11, 2022 11:03 AM

    Michael Oliver: After $2100 gold and $28.15 weekly close for silver, watch out. He now advocates miners over physical………….Good listen.

      Mar 11, 2022 11:24 PM

      Thanks for posting that, Silverdollar. I would not have come across it on my own.

    Mar 11, 2022 11:39 AM

    Oliver was wrong two years ago……. on spot price call……on gold…..
    Not sure he is the guru, everyone thinks he is…….(I know, he is smart guy)
    I think he is wrong on silver.. at $28….. more like $30-32……
    But,…. he has the order correct…. gold, silver, miners…… JMO

    But ,,I agree with him on “WATCH OUT”……………….
    Have a great weekend.

      Mar 11, 2022 11:23 PM

      Jerry, I’ve seen enough of Oliver’s work that I feel confident in saying you can take his $28+ breakout level to the bank. His breakout numbers, up or down, are very different than his guesstimate targets that come after such breakouts. For example, I knew immediately he would be wrong about his guess for gold’s high in 2022 because the price charts said no way. Remember that his momentum charts give no price targets at all, just support/resistance levels.
      Oliver is better than a guru because his service gives signals that have nothing to do with opinion so placing trust in some character is not a factor at all. I’ve seen old copies of his work and not only did he turn bullish the gold sector in Feb. 2016 as mentioned in this interview, he also turned bearish the gold sector before the gold crash of 2013 as well as bullish the stock market. I can think of one always wrong yahoo here in the KER comments who called Oliver a yahoo several months ago despite the fact that it was Oliver who delivered those excellent turning points. Some people make a habit of talking out of their you-know-whats.
      So, I’d watch for that 28.15 weekly close for silver if I were you and let the price-only guys wait for a new high above the 30.35 high of last year.

        Mar 11, 2022 11:47 PM

        Thank Matthew……. for the reply…………
        Well, …. I will keep in mind the $28.15………… and thanks again…

          Mar 11, 2022 11:10 PM

          It seems like gold and silver miners aren’t rising entirely in concert with the futures price of the metals. What do you attribute this to? Do you think they will catch up?

          Mining shares are stocks and the hedge funds and vast majority of investors still believe that the stock market is the place to be and the current pull back is just another dip to be bought. Until the stock market falls hard enough to cause vast sums of capital to look for alternatives, the mining sector is well out of the spotlight. That will change. Gold above $2,500 for any length of time and silver above $30 will be enough to light the fire beneath the mining sector.

          zerohedge….. Andy Schectman, interview… just in…..

          Kind of the same thing , I was thinking when I posted……$30-32

            Mar 11, 2022 11:28 PM

            Jerry, since the January 28th low, gold went up about 16% while GDX, HUI, and XAU went up about 40%. That’s leverage of 2.5 to 1 which is normal/good. During the next leg higher, I bet it will reach 3 to 1 or better since FOMO will really kick-in among the retail crowd. I also think the silver miners will greatly outperform the gold miners. SILJ only beat the gold miners by about 2% during the Jan. 28 to March 8 move. From the June 2020 low to the August 2020 high, SILJ beat GDX by about 50% (69% vs 47%). Such action and more will return.

            Mar 12, 2022 12:08 AM

            Matthew………. thanks for the follow up……….

            Heard today……. Sat Morning…………. Sam Zell…….. now has a little GOLD………….

        Mar 12, 2022 12:51 AM

        Agreed OOTB. For the next move higher in Silver to be impulsive, and create a new higher peak, it must take out the high $29- low $30 resistance area that was tagged in 2020 and again in Feb 2021. That is the line in the sand most people will be watching for confirmation that Silver has broke out to higher level. Sure by $28.15 that will achieve other lessor technical factors, but making a higher price is the quintessential technical requirement to confirm the breakout, and where more momentum will build.

          Mar 12, 2022 12:09 AM

          Thanks EX…………. looking for that confirmed momentum…… to do some switching…..