Erik Wetterling – Is There An Opportunity Cost To Being A Value Investor?
Erik Wetterling, Founder and Editor of the Hedgeless Horseman website, joins us to share his perspectives on being a contrarian value investor in the gold and silver junior mining stocks, and dispelling common misconceptions around opportunity cost, and what an opportunity even is. Eric mentions that the price one pays to buy a stock is really the only thing investors can control, and it comes down to picking wisely, having patience, and using common sense to value where a company and project will be in 12-24 months. This is much different than the short-term trading approach based on sentiment and momentum, and challenging because people often default to short-term thinking.
Another area we discuss is the allure of multi-bagger returns in mining stocks, but few investors show the ability to buy when stocks are in disgusting downtrends, and hold for a long enough time period to get the bigger percentage returns. We review if sitting in a stock for months or years, that may even pull down, is truly an opportunity cost, causing one to miss other trends in motion.
We wrap up with a discussion of 2 companies that Erik really likes, that are doing good work, have good teams, and have the ability to be rerated much higher in his estimation: Nevada King Gold (TSX.V: NKG) and Goliath Resources (TSX.V: GOT).