Subscribe Now to My FREE Newsletter (Join 5,000+ Subscribers!)

Eric Sprott, the Canadian kingpin financier of junior mining/precious metals companies, was on my wish-list of investors that I wanted to interview for my 2016 book, Market Masters. However, that interview didn’t pan out (maybe the sequel). Commodities were in a slump, but Gold finally bottomed out at the start of that year, steadily rising out of the bear market.

This morning, I stumbled upon a good interview with Eric on Financial Post that I want to share: https://business.financialpost.com/commodities/mining/billionaire-eric-sprott-dishes-on-his-golden-investment-spree-its-like-being-at-a-table-with-a-winning-run

Investing in junior mining / precious metals companies isn’t in my wheelhouse, but there’s definitely some parallels to investing in Micro/Small-Caps, and it’s still important to get inside the head of successful investors who’ve got the knack for bagging winners.

As I read the interview, I pulled out insights and summarized them below for you.

Eric Sprott on Tenbaggers, and the Discovery Process:

– Sprott launched an investment blitz, the likes of which the junior mining precious metals sector had seldom seen, doling out somewhere between $200 and $300 million in a matter of just a few months to acquire large stakes in about two dozen companies, most of which have never earned a dollar of revenue

– Sprott takes a birdshot approach to investment that spreads his money far and wide

– “You’ve got to have the dream, right?” he said. “You’ve got to have the dream you’re going to find something.”

– “The guy gets up at ungodly hours, he might get up at 2 a.m. studying,” said Conor O’Brien, a former capital markets manager who joined Sprott in May to help with the investment blitz. “Neither one of us are geologists, we’re just financial people that can do mathematics, as opposed to the geology. We more kind of conceptualize, and dream and kind of multiply.”

– Sprott was an early investor in Kirkland Lake, was appointed chairman in 2015, and one year later helped engineer its merger with Newmarket Gold Inc., a small gold producer in Australia. Not long after, the newly merged company discovered high-grade veins at two mines, which propelled its stock upwards to $63 per share.

– Many investors pride themselves on not selling when a stock hits a bump, but Sprott said it is equally important to not sell when the stock rises, at least not until it’s gone up five or even 10 times, a so-called tenbagger.

– “I’ve had lots of tenbaggers and the important thing is to stay in it,” he said.

– But when his stake in Kirkland Lake reached about $1.3 billion earlier this year, and it looked like gold prices would keep rising, Sprott said he decided it was time to sell.

– “I still have a lot of money in Kirkland and it’s a great company, but it’s not a tenbagger from here,” he said. “And I like tenbaggers as opposed to 100 per cent. It’s just my nature.”

Read the full interview w/ Eric Sprott here:  https://business.financialpost.com/commodities/mining/billionaire-eric-sprott-dishes-on-his-golden-investment-spree-its-like-being-at-a-table-with-a-winning-run 

Subscribe Now to My FREE Newsletter (Join 5,000+ Subscribers!)