Erik Wetterling – Riding The Resource Sector Down To The Abyss For The Eventual Outsized Gains When Sentiment Turns
Erik Wetterling, Founder and Editor of The Hedgeless Horseman website, joins us to review how he is reshuffling his portfolio and adding in more beta optionality plays and small micro-cappers, in addition to the traditional quality alpha plays. He points out that you don’t want to be in beta optionality plays at the end of a long uptrend, but that is not where we find ourselves at present. Conversely, when there has been a long corrective move lower in the gold and silver stocks, and we see extremely depressed valuations for cashed up developers with ounces in the ground or even producers, that getting into more of these call options on higher metals prices and a sentiment turn can be a rewarding experience.
We discuss that many that have been waiting for breakouts in mining stocks before taking positions have been perpetually wrong-footed after a series of false breakouts, and that they’d have been better served buying into the downturns when sentiment readings were near their lows. He believes it is important to find companies with quality teams and projects that have the access to capital to survive this low sentiment, so that they can thrive when sentiment improves.
Some of the quality “alpha” companies discussed that have weathered the storm better were Western Alaska (WAM), Snowline Gold (SGD), Goliath Resources (GOT), Eloro Resources (ELO), K92 Mining (KNT), and i-80 Gold (IAU). Some of the “beta” companies with optionality to rising prices and improving sentiment were Nighthawk Gold (NHK), Integra Resources (ITR), Wallbridge Mining (WM), Liberty Gold (LGD), and Bonterra (BTR).*
*Western Alaska, Goliath Resources, and Eloro Resources are sponsors of The Hedgeless Horseman website, and Erik has shares of many of the companies mentioned in this interview in his portfolio.
* Shad has shares in i-80 Gold, Integra Resources, Wallbridge Mining, and Liberty Gold.