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February 6, 2020 | PS on PPSS: A Rising Tide Does NOT Lift All Ships

Lobo Tiggre, aka Louis James, is the founder and CEO of Louis James LLC, and the principal analyst and editor of the Independent Speculator. He researched and recommended speculative opportunities in Casey Research publications from 2004 to 2018, writing under the name “Louis James.” While with Casey Research, he learned the ins and outs of resource speculation from the legendary speculator Doug Casey. Although frequently mistaken for one, Mr. Tiggre is not a professional geologist. However, his long tutelage under world-class geologists, writers, and investors resulted in an exceptional track record. The average of the yearly gains published for the flagship Casey publication, the International Speculator, was 18.5% per year during Tiggre’s time with the publication. A fully transparent, documented, and verifiable track record is a central feature of IndependentSpeculator.com services going forward. Another key feature is that Mr. Tiggre will put his own money into the speculations he writes about, so his readers will always know he has “skin in the game” with them

Investors like to say that a rising tide lifts all ships. It’s a nice idea, but clearly not true. Some investment ships—even in the pre-production sweet spot (PPSS)—have huge, gaping holes in their hulls. They stay right on the bottom. Others have hidden holes or weaknesses and sink after an initial surge. Or, abandoning the metaphor, an average increase doesn’t mean all investments will increase.

I bring this up because after I published my latest PPSS research, a friendly reader asked if I’d not have been better off keeping my PPSS research to myself. After all, if the strategy works, why give it away? I could just use it to make money for my paid subscribers and myself.

In truth, I thought of this after I published my original research three years ago. By then, of course, it was too late.

But even if I hadn’t already let the cat out of the bag, people would soon have seen the pattern in my speculations and figured it out. It’d be pretty obvious as the portfolio filled with companies building their first mines.

I decided there’s no sense trying to hide it.

Besides, what I’m giving away is a general speculative investment strategy built on years of research. The devil is always in the details, and that’s where I shine.

Consider. The average numbers are quite compelling. The average gain for companies that succeed at building their mines is around 100%.

But that’s an average…

The top five winners from a construction decision (CD) to First Pour (FP) delivered gains of:

  • 578%
  • 700%
  • 704%
  • 869%
  • 876%.

Fantastic!

But the bottom five yielded:

  • -83%
  • -76%
  • -69%
  • -67%
  • -57%.

Not so great.

It’s possible to take major losses betting on PPSS plays without careful due diligence.

Yes, almost 74% of all PPSS cases yielded some sort of positive gains, but that doesn’t mean that all of these were substantial gains. Here’s a closer look at that:

  • Of PPSS companies that built their mines, 9% failed to yield any positive gain at all.
  • Some 5% yielded negligible or minor gains (less than 20% over almost two years).
  • And a good 45.7%% yielded only modest gains (less than 40% over almost two years).

Bottom line: While PPSS plays are a much safer way to play, you can’t just throw darts at the PPSS board and expect to make a fortune.

That should provide your Due Diligence Guy with a bit of job security.

That said, as I do advance my research of what makes for a top-five performer, I am thinking of keeping that special sauce to myself. Subscribers will have the advantage of my guidance in this regard—or perhaps a leg up on figuring it out from my speculations.

That seems fair to me. I hope it does to you as well.

At any rate, that’s my take,

 

P.S. In case you missed it, here’s the page where you can download my new PPSS report—which does include new findings.

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February 6th, 2020

Posted In: Louis James

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