Brian Leni of JuniorStockReview.com shares five pro tips for successful 2024 resource investing in this monologue. He also reveals three mistakes he made and two successes he achieved in 2023.
Brian Leni is the founder of JuniorStockReview.com which exists to offer information, ideas, and strategies for managing speculation in the junior resource sector. Brian first discovered mining stocks about 18 years ago and was immediately intrigued. In 2014/2015, Brian anticipated that the resource sector was closing in on a bottom, and he wanted to access more capital for the expected up-cycle. So he sold his home and then invested 2/3 of the home sale proceeds into resource stocks. By August 2016, he saw his invested funds triple in value. Due to his large gains, Brian quit his professional job as an engineer and now devotes his time to researching and investing in mining stocks.
0:00 Introduction
0:40 2023 Mistake #1: Sell more in bull market frenzies
3:05 2023 Mistake #2: Better align the market cycle with company’s Lassonde curve
4:55 2023 Mistake #3: Differentiate between the inevitable and imminent
7:25 2023 Success #1: Good picks & successful profit-taking
9:03 2023 Success #2: Patience sitting on the sideline
10:46 2024 Success Tip #1: Use level two data
12:24 2024 Success Tip #2: Open an Interactive Brokers account
14:00 2024 Success Tip #3: Write out your investment theses & price targets
16:05 2024 Success Tip #4: Read these two book recommendations
17:23 2024 Success Tip #5: Create a list of ten rules you’ll abide by in 2024
Brian Leni’s website: http://www.juniorstockreview.com/
Brian’s Twitter: https://twitter.com/Junior_Stock
YouTube Playlist for New Mining Investors: https://www.youtube.com/watch?v=7SW96tD9Kdg&list=PLEk-3nAisq6z3BTO_g_M_tg7JoC-dAsP8
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#goldstocks #miningstocks #resourceinvesting
You are listening to Mining stock education where you’ll learn from the top leaders in the natural resource sector and uncover quality mining investment opportunities welcome to Mining stock education on today’s episode you’ll be hearing from me Brian Lenny a resource sector investor and editor of Junior Stocker premium I’ll be giving you an
Introspective look at what went right and what went wrong in 2023 for me I think it’s a great opportunity for you to learn from my mistakes and hopefully avoid them plus I’ll be giving you five things I think you can do in 2024 to be a more successful and consistent
Investor so let’s start off with the negative where did I go wrong in 2023 um I definitely made a few mistakes and I think it’s best encapsulated in terms of the timing of my investments you know none of these points I’m going to cover are necessarily new to me uh but the
Mistakes oh you know definitely overemphasized that I need to be better in them and uh I think it starts with selling more in those five momentum to frenzy type settings and you know these are these bull market type settings um I need to be better at at selling you know
Over the course of my investing career which has you know been over 10 years I’ve had two years in particular that I’ve done very well in there two bull market years which is 2016 and 2020 and looking back especially to 2020 I think I give myself a medium grade in
Terms of what I sold um but I definitely didn’t sell enough and that is a problem now looking back over the last two years but in 2023 and how that has kind of carried over um in 2020 like I did take profits and I moved some of them into New
Opportunities and I took a portion of it and put into real things I think that’s actually even a side point that could even go with the the things that you should do better in 2024 is when you have profits I think in the junior resource sector uh obviously you take
Them and you move move them into new cheaper opportunities um but you have to be putting that money into real things Junior companies are floating abstractions you know none of in some cases these companies have nothing but a hope and a dream and it’s that company’s
Ability to sell that dream to the market and if they’re recognized that’s kind of where their value comes from and you need to take hold of that idea and make sure you know you’re putting money onto your mortgage on house improvements maybe you need a new vehicle maybe you
Need your can invest in a real business that’s cash flowing or maybe even further education for yourself all these are real things that I think you need to have at least a portion of your profits going into at all times and especially in those years those bull market years
You need to uh take a full advantage of them and and execute in that way so I give myself a medium grade and really what I say that is because uh looking back on the performance over the LA this last year and but how it’s tied to 2020
And how I redeployed that money uh I could be better with my my timing one of the points that I’ll also kind of go over is you know I I think I’m a fairly self-aware person and I make it a a priority to be to be one I my competency
Level puts me into a lot of investment in developers and I’ll Define developers as companies that are sort of pre- resource you know they’ve already made their Discovery they have a resource or maybe an economic study and these companies are highly successful able to the lon curve and you more and more I
Invest in this sector the more I’m reminded that I need to better align the market cycle with the company cycle if these are aligned and you you have full recognition of of where that company actually is and where the market is I think you can make the the timing aspect
Work out much better for you and you know some cases you’re probably better to have your money in cash or some other part of the market maybe a producer that’s got cash flow sort of regard less of where that metal price is uh to keep your money in that hold period until the
Timing is right now I I nobody has a crystal ball and can tell where markets are headed uh but I think there is that sort of sweet spot where you can get better with your timing and that’s that’s what I’m try to talk about um and again next to my competencies the other
Thing I like about buying the developers is that they have intrinsic value in in themselves uh having a resource means there’s actually something in the ground and that you can assign a value to and you can compare it to how the Market’s valuing it and this is really how you’re
Going to make money is by buying those companies with intrinsic value that are selling for less than they’re worth and then hopefully they have a good plan on how to get Market recognition moving forward and and of course you’re going to make mistakes across this it’s just
Getting better at it and that’s that’s where I know I can be better moving forward 2024 and Beyond the last point I’ll leave you with and definitely is something that I have to remember or catch myself um not confusing is the difference between inevitable and imminent uh you can come
With a logical sort of order of things and you can say wow you know if this and this happens then absolutely this has to happen yes that’s probably true but it doesn’t say when this is the big difference between inevitable and imminent is timing I use a perfect
Example and it’s one that I thought a lot about is the 2008 crash 2008 happens it’s a worldwide catastrophe financially uh like leading into the states but many other Western Nations especially had to do the same thing they flooded the market with liquidity meaning you know quantitative easing and they lowered interest rates
Toter low levels you know housing markets go crazy this and that go crazy and really I thought to myself wow you know we have to be on that precipice of this thing falling apart and you know finally getting everything back everything’s gonna have to go back to
More sound money principles and such the fact is it’s just not that way or it’s not that way in the you know imminent um as I thought it was you know really you look at the last since 2008 the last whatever we is like almost 15 years you know things have moved moved
Along at a snail’s pace and besides covid happening in 2020 really in the gold market we could have been sitting in the same position you know as we were in 2013 2014 2015 I’m not sure that necessarily anything else would have happen just kind of floating away sideways and so it does
Show you that you know the you can form a logical argument for something but it doesn’t mean it has to happen tomorrow and whether that’s with this Green Revolution or the gold market and the amount of debt in the system or whatever you want to look at oil Market uranium
Um you know everything can logically line up but it doesn’t mean it has to happen tomorrow and thus you have to make make sure that you’re not totally reliant on that timeline as the leading principle of why you’re investing and hence why you can’t use commodity pricing as the reason to invest because
Getting that that right is super hard and uh it’s a lesson that I think unfortunately everybody typically has to learn by by losing money so that’s the negative side or where I went wrong so let’s talk about the the positive side where did I go right 2023 has been a positive Year from
A portfolio standpoint especially if you compare it to 2022 which is pretty brutal I I made a couple picks at the end of 2022 and then the beginning of this year or new Investments and I thought of those four or five picks you know the top two were really good sold
One for a good profit the other one we took some profits on the middle one or two did kind of nothing and then the last point was definitely a mistake and it was it was a mistake of over optimism I suppose um but again a good learning
Experim experience but it sort of leads into this other point um that I had that I think I did well is selling positions early in the year and sort of early in the investment uh to ensure that it didn’t get worse and that I avoided sitting in Q4 this year um which ended
Up being terrible now it’s popped up the last two weeks of November and into December um but you just never know when that’s going to happen but you know for those that waited for Q4 to sell you sold at a drastic uh price reduction compared to the beginning of the year
Because I don’t know if you recall but you know especially in the prec mods Market there was some optimism heading into q1 of 2023 and you know that’s when I took advantage of adding some positions taking some profits and as soon as the market sort of rolled over I was very
Happy that I did and it just shows moving forward you know I need to cut things that aren’t working as soon as possible and not wait to the end of the year um to sort of get rid of things this flows into another point I I think patience has definitely been a big
Point um besides those four or five picks that were amongst probably a two or three months time span I really sat on my hands and for a lot of people especially as a newsletter writer that’s not the the reader most favorite thing everybody loves the picks but I think
Sometimes it’s wise to do so and to me it was wise to do so basically the last year and a half unless you know you pick that right Market um I missed the uranium uh runup and uh I think you know obviously if you hit that then then
That’s great uh but unless you’re doing that sometimes it it’s wise to sit on your hands and in 202 and 2023 um we had companies that were you know putting out good news flow and their share prices were selling off they were being used as liquidity events and
When you see that sort of price action happen I think that’s a great time to slow down with the market and sort of take every moment as you go and if you have that certain buy Target that’s cheap enough for you then by all means you start buying and you buy in trous
Over a certain period of time um but slowing down and being patient is probably a good good way to be almost regardless of what markets you’re in and as I said before you know out of the plus 10 years that have been in um a resource sector investor really there’s
Only been two years that where you really wanted to push the momentum and that um I think it just shows you that being patient is is a bigger part of it than um being impatient so now we’ll move on to five things I think you can do to be more successful investor in
2024 uh the first one you use level two Market data and for the the newbies and I’ll be quite honest I didn’t really know what level two Market data was all about until I started trying to use it and so really I’ll start from the the level one perspective when you go into
Your brokerage account and you you want to get a Cote on a company and you want to see what the bid and the ask is that’s your level one it basically tells you where the bid is where the ask is and sort of the size you don’t see
Anything else you know if there’s more a lot more selling above that that minimum ask price or if there’s a lot more buying potential below that that buy price you have no idea you’re blind to it and until you get that level Market data where you can see that you have no
Idea I tell you after using this that for the last four or five years I think 100% um it pays for itself you know this level two Market data usually has a cost but I think it’s it’s included in in basically every brokerage firm out there
30 40 50 bucks per month uh there’s also a couple other websites co.ca is one that has a nice visual format it’s a little costlier uh but then again there’s some other advantages to how their their system is set up but it all depends on you and especially if you’ve
Never used it before then I would suggest that cheaper version get used to it and then you can expand on how much information you want to digest and how you want to digest it uh but I tell you after using that for again the last four
Five years there’s no way I would move ahead without it and to me it’s invaluable and more than pays for itself um especially in these hard markets Point number two open an interactive broker’s account now I’m not I’m not have no affiliation there for Brokers no sponsorship no nothing um
I’ve just used IB for a while now and especially being a newsletter writer that has a lot of international subscribers probably the number one question I get outside of if I like this company or that company is what brokerage should I use especially considering I’m not a Canadian or live
In Canada and have a Canadian account and I always tell them interactive brokers you know you get an IB account you can basically trade on almost any exchange you can buy these Canadian based companies on their home exchanges not the sort of not derivatives but the
OTC or whatever you’re going to get the maximum liquidity the best price action is going to come on those home exchanges TSX and the tsxv uh it’s got great exchange rates sometimes you’re going to have arbitrages between the different exchanges because you have access of the
Access of them in one account again you can play those arbitrages if if need be or if that’s something you want to do so again I think there’s a lot of value especially for international um investors to have an interactor broker’s account and I think again it’s a it’s a
Huge advantage over let’s say an American who has just your your regular American bank account or brokerage account that only trades OTC uh I think there’d be a major plus and what if there is a cost I don’t think there is um but not having it you know the
International Brokers account is going to be a big Advantage for you point three type or handw write a onepage summary out linning exactly why you’re investing in a company you’re going to want to write how much you think it’s worth what catalysts are going to propel it higher in valuation
And of course what price you’re going to sell it at you know for me as a newsletter writer I continually write all my thoughts down you know including the recommendation articles on a new pick and I’ll tell you it’s 100% a major factor in why You’ been is successful more consistently
Um over the last you know seven years since I’ve been doing this full-time it makes you crystallize the investment thesis you know you go through in a logical manner you go through that base value calculation it’s quantitative there is definitely some qualitative especially during the expiration
Companies to try of sort that out how you’re going to place value on a company that essentially has nothing um but it forces you to do it and then once you have that Baseline value established you need to sit there and think okay okay well why is the share price going to go
Up why is the market subtly going to take recognition besides the middle price going up which is definitely one of the factors but remember there’s a plethora of other things that can happen to make a share price go up so you need to sort that out and you need to sort it
Out over a certain timeline so you write all this out and in a very concise and compact format and then finally and arguably the most important point that it gets most overlooked is what price you’re going to sell at Price targeting is something that you’re not just going
To pull out of your head you have to say Okay this is the base value this is what the company is going to do uh in the next year and this is what the share price should be after they’ve added all that value once they’ve done all that
Right for most people that’s going to be the time to sell and of course it’s Market dependent da da but this is these are the steps I think that most investors are going to have to take um and it’ll solidify not only why you’re investing in the company but it’ll also
Catch you if you’ve got too much emotion in the decision you’re trying to make um or you’re getting out of your comp as a sea level Point number four uh read managing oneself by Peter Ducker and seeking wisdom by Peter bevelin I’m a big uh promoter of self-awareness I think everybody needs
To be self-aware but especially as an investor I think it plays so much into our success because almost like with Point number three people have a tendency to get up in the clouds um they let a sales pitch you know kind of direct them into something that they’re
Really not or really shouldn’t be in such as expiration that requires a lot of geological knowledge uh requires a lot of time to go through news releases and you know you can get lost in it though because it’s so sexy and so I think you definitely need to First you
Take heed of of what you know and what you don’t know what your risk level is you read Peter’s book because he’s going to tell you all about human bias and this is something no matter how well you know yourself just just being a human in general you’re going to be susceptible
To the bias um although it’s what 25 biases or 26 biases and Peter’s going to take you through exactly what they are and then once you have an idea of human behavior and who you are I think you need to have a format for managing yourself and Peter ducker’s book is you
Know you know widely held as one of the best out there and so I think these are two great books to start with and this is a great lead into Point number five create a list of 10 rules rules which you will stick to in 2024 and what
You’re trying to do here is you’re trying to create a framework for decision- making no matter the market bearable emotion can creep in and you can get off um of where you want to be headed and it can take you out of your comfort level or your competency and you
Want to avoid that at all cost and so I’ll suggest a couple rules that you might start with so rule number one you’re going to execute on point number three I brought up you’re going to write a one-page summary for each of your inv Investments and you’re going to do it
For all the investments in your portfolio right now and every new one that you have rule number two don’t chase the share price if you go back to rule number one you’re going to write that summary part of that summary is going to have a baseline value you want
To buy something that’s selling for cheaper than it is and once you kind of sort of set that price whether it’s you know the thing is worth 50 cents I want to buy it for 15 cents especially in these bad markets you’re not going to chase it if it
Spikes up over 20 um you’re let it come back to you at 15 cents and that’s where you’re going to buy it volatility is your make it your friend not uh not the point that destroys you and so you’re going to wait you’re going to put your
Order in and you’re going to be you’re going to wait for it to come back at 15 cents and you’re probably going to add in I’m going to buy in three or four Tres to make sure that that share price goes down further I’m going to dollar
Cost average it Point number three or rule number three sell the company once it hits its price Target you know as I said you know so many many people get focused on the buy side and that’s great but what they forget to do or what they get susceptible is being way too greedy
When it comes to the sell side and this is a huge mistake because when profits are there profits can be fleeting in this sector you need to take them and like I said you need to take them redeploy into new cheaper opportunities or put it into real things and so
Selling is such a big part of about being an investor in this sector and you got to get a hold of it and for me that’s that one last point that I had that it took a mentor really to hammer into me and then again I still made the
Mistakes looking back to 2020 and then and then I could be better even in 2023 uh but selling is a huge part of it and you can’t be greedy you have to understand what Market you’re in take those profits um these are simplistic examples obviously you have to come up with your
Own but this is going to be a part of your self-awareness thing in which you you read from part four in those two books and how you’re going to create a framework for yourself and keep you in your in your zone of of Competency and comfort and if you do that I guarantee
You’re going to make better investment choices that’s it for me guys thank you for listening see you in 2024
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