10/20/2010
December 3, 2017
10/11/2010
December 3, 2017

10/15/2010

I am currently in Mongolia. It’s bloody cold here and it’s only October. (I thought I posted this when published, but realize I didn’t)


Kuppy, with your superior knowledge of many holes in the earth, have you knowledge of any LITHIUM miners you might care to recommend in North America ?

I have no knowlege of Lithium miners in North America. I’ve written about Lithium before (please use search). I think that it’s not a viable investment in North America as none of the hard rock North American companies are cost effective and it all comes down to cost. There is a massive supply of Lithium worldwide. It’s like saying you are bullish on sea water. So you need to focus on the cheapest producers, and those are in Atacama b/c they can dry it cheap. Then you need to purify it. If I wanted to play lithium, I’d do it using some other method than miners.


Brilliant commentary on this blog. thanks for sharing your views.
Re Mongolia i was wondering what they dont have, that they cant make when the boom occurs. Is it maybe Silver still the cheapest element on the periodic table

I’m wondering the same thing about Mongolia. I have a few ideas, but I still need much more research. I just extended my trip another week. There’s way too much potential to figure it out in 10 days.

I am not too bullish on silver at these prices. I figure that the industry’s all in cost of production is around $12-$14. That means that it’s nearly double the price of production now. That’s historically been ‘danger zone’ for commodity investments.


Alt Drillers: Did you have a look at Boart Longyear

Yeah, I bought a PILE of it at 7 cents during the crash (before the reverse split). At least it’s liquid…. That’s probably the most positive thing I can say about them.

When you’re the biggest guy in an industry (15-20% market share) you only can grow at the pace of industry growth + changes in market share. These guys continually lose market share, even though they are constantly overpaying for assets. I am not interested at these prices. I prefer to focus on Major Drilling when it comes to large cap drillers. However, on most valuation methods, Energold is cheaper, more profitable and has a stronger balance sheet. More importantly, it’s growing like Kudzu because they have a much better product with higher returns on capital.


Hi Kuppy,
I realize you cannot give specific investment advice, however I would appreciate knowing the general percentages that each of your positions mentioned make up in your portfolio if possible.
II am trying to balance my portfolio between miners, exploration and bullion and any insight would be greatly appreciated.
Thank you for the tremendous service that you provide, giving those with much less experience an insight into the investment world.

I am hesitant to talk about percentages because different percentages work better for different people and I do not want to influence people to do something that isn’t right for them. Small cap companies can be very volatile and are more fragile than mature companies. I wouldn’t want someone to make a big investment in just one smaller company. If you want to invest, you need to do it in a diversified way as part of a larger portfolio. For now, I think that the way I categorize my investments as very large, large, medium and small is sufficient to give a sense of scale.

Just remember that exploration companies aren’t businesses. They’re burning matches. They go up well when people are optimistic, they COLLAPSE when the mood changes. I try to keep these positions quite small. I learned this the hard way.


Kuppy, I am just wondering why you don’t just buy real estate in Mongolia? It seems to me every boom in developing countries was led by real estate booms. I know you know Mongolia way better than me. Any thoughts?

I’m looking into it. There’s big money to be made in real estate, but all real estate is local. Unless you know the local markets, you are liable to do stupid things. Don’t forget, you have to manage real estate. Unless you are in the country full time, it’s probably in the ‘too hard’ category, unless you want to buy 20 units and hire someone to watch after it.