Bill Powers explains how to make your first million dollars via junior mining stocks. In this 1-hour MSE episode, you will learn:
-How to think like a junior mining insider
-The quickest way to uncover potential mining 10-baggers
-Why the Three “I”s are better than the 9 “P”s
-How to make, and keep, your first million-dollar gain
0:00 Introduction
4:08 Future results of speculations are uncertain
6:08 S.A.D process
10:35 Develop an efficient sifter
12:38 Flawless junior mining investments don’t exist
16:06 Triple-I Sifter
18:13 Igniters: what will move the stock price up?
25:41 Igniter: commodity price rise
31:48 Igniter: marketing / promotion
37:44 Igniter: value recognition (perceived or actual)
43:46 Incentives: what motivates management?
52:23 Inhibitors: what will cap the share price?
58:28 Final thoughts
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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 you are listening to Mining stock education I’m your host Bill Powers and in today’s show I’m going to teach you how to make and keep
Your first million dollars via Junior mining stocks as I set forth a new paradigm that I’ve articulated to best accomplish this in my opinion ion in this episode you’re going to learn how to think like a junior mining Insider you’re going to learn the quickest way to uncover potential mining 10 Baggers
I’m going to discuss why the three I are better than the 9 PS we’ll delve more into that and you’re going to learn how to make and keep your first million doll gain it’s possible and if you say I don’t have a lot of money now well I’ll
Tell you in advance that the first step is to hustle find ways to generate more income apply yourself to to learning how this sector Works what to look for in junior mining Investments and then be courageous at the right time when the best opportunities are presented to you
And you can see those life-changing gains that’s that’s the formula and if you’re not willing to work hard to earn the capital you need to then deploy into the right opportunities then that first Million May evade you but if this is something that you’re willing to set forth both in
Your efforts to earn and then your learning to apply and leverage that learning in this sector this could be something that could work in your favor I’ve developed what I call the three eyes and these three eyes were developed for two people the first is my young 12-year-old son
Who has shown both interest in and aptitude in investing and in finance he’s read through the Rich Dad Poor Dad books and every time I’m discussing Finance or investing he has an open ear with great questions so this articulation is a way for him to begin to view Junior mining Investments and uh
So it’s simplified but it’s not easy to be successful at this but this Paradigm I’m going to set forth is simple for him to understand and apply and it’s also useful for listeners who I’ve received multiple emails over the last few months people asking me for input on their portfolios portfolio review
I don’t offer any of that I’ve never asked listeners for money in the eight n years that I’ve done this and I don’t want to I don’t write a newsletter I let you know what I invest in it’s a sponsor based show but for those listeners that
Email me it’s better than just to be told an opinion it’s better to to learn a paradigm that you can then begin to apply and even if you don’t like the Paradigm you can critique critique the Paradigm what I’m going to lay out for you here it’s like a skeleton but you
Got to add flesh to it and you add flesh to it via your experience listening to interviews calling management interviewing management yourself going to conference rubbing shoulders with people in the sector developing a network listening to professionals see if they’re right or wrong having conversations with people that have been
Successful in this sector getting burned yourself being successful and then doing a honest humble critique of why you were successful all of these things is going to add flesh to this skeleton I’m going to give you a grid these three eyes but then you got to fill in the grid and so
You you can take this and it can be a paradigm that you can begin to apply to potential Junior mining Investments but you still have to do the work and it’s going to take years years for you to really get good at this I was told upfront that it’ll take you 10 years
Before you actually know what you’re doing in this sector I want to point out up front that this is speculative what we’re talking about we are not Biff from Back to the Future the future results of our speculations are uncertain if you recall back to the Back
To the Future movies and I’m assuming that youve watched them with Michael J fox in one of them in older grabs the gry sports Almanac with the complete Sports statistics from 1950 to 2000 then he goes back in time and he’s talking to a younger Biff in an old
1950s car and he’s trying to convince him saying listen this Sports Almanac I have in my hand it is worth millions of dollars if you just follow this and place your bets according to the results that are in this you’ll be successful well the younger Biff who wasn’t very
Intelligent didn’t believe him and then on the radio there is the ending of a sports game so older Biff looks in the sports Almanac he says the end score is going to be this few seconds later the announcer announces the end score of the game that was in question younger Biff
Believes him so then as the the movies play out you see subsequently that the younger Biff became very wealthy because he had the results of all the sports games via this Sports Alman in advance so he knew the end result when he placed his bet which really wasn’t a bet
Because he knew the end result you and I are placing bets hopefully educated bets hopefully intelligent speculations but even when you think you got a good setup and even when you think you you got it to where you’re going to make a ton of money it can work out to where things
Still go wrong so we’re doing the best we can as you apply this approach to Junior mining Stock Investing it doesn’t mean you’re going to be 100% SE successful but we’re trying to set ourselves up to have probability in our favor that’s what we’re talking about
Here I’m going to go over my sad process and the three eyes sad Saad I’m currently in my ninth year as a junior mining investor I’ve looked at hundreds of Junior mining Investments I’ve talked to CEOs over zoom in person at booths at conferences a phone calls
Because of the show i’ I get a lot of people reaching out to me I’ve talked extensively with investors and entrepreneurs in this sector who have made millions of dollars via Junior resource stocks I’ve observed how and what move Mining stock share prices and so what I’m going to share with you is
The Paradigm I’ve come up with the skeleton to use my previous articulation and the flesh that I put on that skeleton based on my own effort Insight experience and wisdom that I’ve learned from others I’ve turned five figures into six figures and then as I progressed I’ve turned multiple six figures into
Multiple seven figures via Junior mining stocks had losses along the way but at this point my gains my wins far exceed my losses because you have to know when to bet big and that’s part of what we’re talking about here I’m more prone to have fewer companies in my
Portfolio in place more meaningful bets on fewer companies others even my friends don’t believe in that approach so critique me for what it worth if that’s not your style if that’s not what you’re comfortable with don’t do it use what I’m sharing with you today to critique your own approach maybe you
Want to incorporate some things I say maybe you want to incorporate nothing of what I say or maybe you say I like this Paradigm and I’m going to move forward with it and you can critique it over the years but I’m going to give you some perhaps not new ideas because other
People have said I’m sure a lot of what I’m going to say however the the the Paradigm that I’m going to lay forth it is a new articulation and what I’m going to share is more applicable to sub1 million market cap companies and even much
Smaller than that I invest in a lot of sub20 million market cap companies that I hope grow to 100 million I invested in a $8 million market cap that grew to over 300 million market cap now there’s delution along the way with share issuances and such I invested in a 20
Million market cap that went over 300 million market cap there was a lot of delution but in both of those cases at one point I was up 10x and and one of them 12x and I I did a significant initial investment that returned six figures in one and seven
Figures in another so what I’m sharing with you again is what I’ve done the sad process sift analyze deploy sad sift analyze deploy you want to sift through the masses of companies because there’s a ton of them out there I was considering I haven’t done one in-one
Meetings in like four years since uh the issue of uh the crisis of 2020 I was thinking about going to a conference again and doing one-on ones I signed up I went through about the 40 or so companies that were listed spent a couple hours doing that and I came to
The conclusion you know I’m not interested in any of these right now so I don’t even know if I’m going to follow through on the invitation to go but I’m bringing that up to say that you have to develop a good sifter you want to get to
Your nose quickly you want to filter through the masses and then after you filter through the masses with your sifter then you want to go more in depth don’t go in depth on a company if it has if you hasn’t passed through that initial sifter that you develop and
Create don’t waste your time going doing a deep dive on a company that’s not even worth it but after you sift then you go into more detailed analysis then you deploy your cash according to the opportunity the better opportunity where I feel I have like more of a competitive Advantage I’m
Going to deploy more cash so you have to develop your sifter and the quickest way to a junior mining 10 bagger is to develop an efficient and focused sifter you’re looking for a potential outperformer when I bet big I want at least a 3X within three years 3 to 5x
But I want to have that potential three or 5x also have the potential for a 10x if I’m going to bet big on a small cap it’s got to give me at least a potential 3x return I want an outperformer with limited downside ideally and in my opinion what I’ll term
The triple ey sifter is a better starting filter than a valuation spreadsheet for juniors there is a role of putting together valuation spreadsheets you know we we each have a different bias or strength or way in which we like to sift through and analyze some people just like they live
In an Excel sheet and that has its place however the more early stage something is and the more small the market cap is in terms of your initial filter in my opinion the valuation spreadsheet plays less of a role when the bigger the company gets and you’re it’s a $300
Million market cap now and you’re comparing this development company to that development company or this producer to that producer and you’re looking at earnings per share and npv and nav and cost per ounce in the ground spent and uh Enterprise Value per ounce in the ground or pound in the ground if
It’s copper not gold that has its place those comparative metrics however I don’t think that’s the best place to start for the sifting and thus I’m laying out what I’ll turn the triple I sifter there is no Flawless Junior mining investment let’s point that out you want to avoid the Fatal
Flaws and you want to make sure the strengths outweigh the flaws you’re going to apply your own unique individual judgment knowing that there are no Flawless Junior mining Investments sometimes I’ve invested in a company and then somebody will email me and say but did you know about this this
And this and I’m like yep I knew about all those things um thank you for that information and I determined that the opportunity if the company is successful is good enough and that there’s enough strengths to hopefully overcompensate for those weaknesses so that I’m still going to make money and
I’ll be able to shell sell my shares for a higher price some point in the future there is no perfect mining investment another case in point I have two very successful very smart friends who Focus exclusively on the junior mining sector one of them is invested in a particular company Junior Miner
Developer SL Explorer has a nice resource and and I said said you know the guy pays himself a million dollars a year in salary and compensation for a non-revenue generating com company in this market which is a tough Junior mining Market he’s like yeah I
Know he’s like but you know I think with what they have in the resource and there’s not many opportunities out there and this particular commodity I just think when the commodity runs the investment is still going to do good he said I don’t disagree with you the guy
Pays himself way too much but I still think I can make money on the stock well I applied my unique individual judgment said I’m not going to touch that thing my friend with a lot of experience says I’m aware of that it’s something I’m looking at but I still think I can make
Money in the stock so I’m still in it I was chatting with my other friend he agrees with me he’s like man that guy pays himself way too much and then when he had a little success with that company we were chatting then he went
And got himself to be an Insider in a couple other companies so he’s just playing The Insider Junior mining game here and then I went through the mdna and I’m like oh nice they’re paying themselves hundreds and hundreds of thousands of dollars of rent one of the this is one of the
Companies he’s investing the one that he makes a million dollars off of salary in stock compensation a year he’s also paying using the company to pay the rent on a building he and some others own and he’s involved in other companies and I’m sure those other companies if I look
Through it in the mdna that those companies are also paying to rent the same building so it’s a way that these guys milk more money away from shareholders to themselves to make sure that they win no matter what well my friend still believes that even though there’s this
Flaw kind of in your- face flaw in my opinion that’s why I’m an AV void on it he still thinks he can make money with with it so there is no Flawless Junior mining investment but you’re going to have to apply your own unique individual judgment the triple ey sifter and I want
You to remember these three eyes igniters incentives Inhibitors the triple I sifter igniters incentives Inhibitors this is what forms my sifter or my filter when I get an email or somebody requests a meeting or I’m looking at going to a conference and I’m quickly going through companies to see
If I’d want to meet with them this is the articulation of how I look at it the igniters what will move the stock price up the incentives what motivates management the Inhibitors what will cap the share price and this simple articulation if you can just remember these three three things when you’re
Sifting through what’s going to move the share price up what motivates management what’s going to cap the share price or prevent it from moving up the igniters the incentives and the inhibiters why the triple I sifter pneumonic others have spoken of the nine PS people property financing spelled
With a pH paper politics promotion push pitfalls price and that can be a helpful Paradigm in articulation a pneumonic device for investors to to think through those different issues and so it is it is useful however in terms of being a sifter I find that if you think in terms of igniters incentives
Inhibitors it’s an easier Paradigm to apply it helps retail investors think more like Insiders and it focus focuses you on your relative entry point relative to these igniters that we’re going to talk about and relative to where management got in and so that’s what you want to focus on
Early an early stage company this matters more what’s going to move the share price up what are the igniters you got to know here’s your next three things to memorize you got to know the only three reasons why a small cap mind stock goes up number one there’s a commodity price
Rise number two marketing or promotion and number three value recognition value whether perceived or actual and that’s such an important Point sometimes you hear shareholder excuse me CEOs talk about I’m here to create shareholder value don’t just think in those terms you need to think about about is what is
Considered or spoken of as value going to be recognized by the market to where there’s an influx of buyers of the stock so that the share price goes up because at the end of the day you are a fractional owner of a publicly traded business and so you want to sell that
Fractional ownership piece that share of the company for more than you bought it so you have to think in terms of value recognition what’s going to cause value recognition so for the audio only listeners you can’t see what I have on the screen for the YouTube listeners but
I have a chart kind of a visual representation of these three igniters commodity price marketing or promotion and value recognition so when you’re sifting through a potential Junior mining investment and you’re analyzing these three igniters and where this investment opportunity as it’s being proposed to you at this very moment
You’re analyzing your entry point relative to the commodity price has the commodity price moved what is your downside what is your potential upside that’s what you’re asking marketing how well has the company been marketed is the company known what’s the potential for the stock price to go up
Just based on marketing or promotion or has there already been a premium that’s been built into it or maybe you have a management team that’s been successful in the past so all of their deals are overpriced I know some very good management teams with great name recognition that a lot of my friends
Won’t even touch because they say they got a good reputation but because of the good reputation all of their deals are overpriced so that’s what they concluded and so how much marketing premium there’s a lot of things you got to learn and it takes years to observe
Just the Shady aspects of how Junior mining stocks are marketed what’s effective what’s not the different tribes that market Twitter versus chat rooms versus YouTube podcast promotion versus email promotion the different types of investors that different types of marketing bring in this is going to be you’re adding flesh to this skeleton
It’s going to be you filling in the the grid that I’m laying out here but I want you to think throughout your learning process about like how am I growing in my observation of what marketing works when it works how it works and what marketing doesn’t in terms of Junior
Mining stock promotion so you’re asking yourself what’s the upside in marketing what’s the downside value recognition you here’s where you can start to bring in your Excel spreadsheet if you like to do that and you could say what value do I think is there actual value or perceived value
And then what’s the downside and what’s the upside so with the triple sifter you’re analizing these three potential igniters of the stock price and you’re saying where is that now because often times how companies are promoted and how they’re set forth they’re like listen this is a great
Deposit high grade high margin da da da compared to them we’re better compared to them we’re better compared to them we’re better okay that’s fine and everything they’re saying may be true however you’re only concerned about buying this share price at one point and selling it for a higher price so if all
Those things are true does that mean there’s a lot of marketing premium already built into the stock does that mean people have already recognized most of the value that is there in fact they may be valuing future success into the share price already that’s probably not
One you want to put too big of a bet on if all of that is built into the stock price already and then the commodity price in addition to that did the commodity price go up 70% in the last year are you sure it’s going to keep running because if it’s not there’s
Going to be a pullback and there’s going to be a massive pullback and drawback in the stock so that’s why you’re starting with the triple sifter by saying these are the igniters where is my potential entry point how much of the commodity price can still run or fall marketing how much marketing
Premium if any is in the stock value recognition how much value is already recognized in the stock so the ideal igniters setup for a potential 10 bagger or outsize profits would obviously look like what I’m showing on the screen here for YouTube listeners for Audio Only listeners I’m showing the actual
Commodity price at a low point the actual marketing at a low point the actual value recog recognition at a low point with the potential upside significant in all three categories so if you find something like this in my opinion and I tend again to bet bigger on fewer companies and that approach is
Not for everybody in a portfolio but this is what I look for realize that the igniters are interrelated so an increased commodity price usually results in a greater perceived value and marketing spend an increased marketing spend can result in a greater perceived value an increased perceived value can open up a financing
Window which results in a greater Market marketing spend so even as we are talking about these three different igniters they’re all interrelated to some degree an example is an exploration company with a project next to a new discovery can receive new interest and flow of funds and there so in this
Example because of the discovery next door an exploro now has a greater perceived value what was moose pasture a week ago is now this could be the next great discovery perceived value therefore they could have new interest flow of funds and a potential Rising share price the commodity price rise as the
First igniter in my opinion you need to start here you have to start here because even when you have good management that may have a cashed up treasury if if the commodity price is not rising or the investment Community is not confident that the commodity price will at least stay where it’s
At this these these little Juniors they just sell off and it can be brutal and this is something external to management regardless of Management’s motives their skills or ability if the commodity price isn’t strong or moving up you’re not going to make money likely in junior mining stocks unless it’s
Discovery and with discoveries you can do your best research but you just never know and the probability is so low so you want to set yourself up with a higher probability I do speculate in explore Coes but I’m not speculating right now beyond what I’ve already done but when commodity price moves then
I tend to speculate more because the commodity price supports the share price it supports supports future fundings and then the discovery if there is one is rewarded more because the commodity price is moving when it’s moving in the other direction the exact opposite show them show the market a discovery and get
No love and your stock sells off 8% on the Discovery because people use it as a liquidity event because they’re scared they’re fearful and they want to go into cash some of your shareholders I’ve seen this happen too many times to note this is the most important igniter
To time correctly the commodity price rise so if you like to study macro and you want to be in this sector try to get your edge here get the macro right then find the best micro opportunity identify the commodity that you think is poised and I’ve used this examples in previous monologues before
But I was researching vadium before vadium took off some years ago now it was 2017 or 18 something like that and then I had my eyes on Largo resources which was a vadium company at the time I didn’t buy it but then vadium just flew
And then Largo went like 10x in like a year or 18 months something like that and so that’s what you look for you want to get the macro right and then find the best micro opportunities get positioned because if you get positioned in those micro opportunities specific company
Specific small cap company that is mining or has a resource of or is exploring for that commodity that’s about to go 3 5x in the commodity price man that’s where you make those quick and easy and easy is a relative term in the sector because you put in the hard
Work those gains are the easiest and you want the easiest gains that’s what Rick rule if you listen to him at all I’ve been interviewing him for years and he’s all over the internet sharing a wealth of knowledge you want those easy gains those gains off the bottoms after
It moves and it’s 3x the commodity price what it was 12 months ago just be careful there could be gains left but the certainty of a continued parabolic move is a lot less than that move off of the bottom if you’ve identified it correctly and the nice thing about the
Resource sector and I know we focus a lot on gold and copper and oil on this channel and other Commodities and I focused on uranium not as much recently but in years past as well that there’s always a commodity primed for a bull move so gold could be in a
Pullback but lithium could be doing well copper could be pulling back but this year uranium’s been doing well and sometimes the Lesser followed smaller Commodities can present unique profit OPP opportunities and let’s look at one that I didn’t participate in but many did and that would be 10 from 2020 like
The end of the first quarter through the beginning of 2022 the tin price went 3x so the price of tin goes three-fold in two years so you get positioned in a good tin company alphaman resources Corp a FM on the Venture in Toronto and you look
At what the share price did during that corresponding period where tin win 3x the stock went from 13 cents and peaked out at $139 so there’s your 10 bagger a 10 bagger in two years why because you found a bull move that you concluded was likely to happen in a lesser followed commodity
Tin is not copper it’s not iron or it’s not nickel it’s not oil it’s not gold or silver it’s not as followed but because there’s always opportunity in the resource sector you’ve identified it and then you identified a company that you thought was good and alphaman resources Corp goes from 13 cents to
$139 now some would say yeah but that’s in the DRC man that’s a horrible jurisdiction I know it’s a geologically endowed jurisdiction and remember how we said there’s no Flawless mining investment some people won’t touch the deer some people will so again that’s a decision you would have to make because
I know people that would have said yeah tin could go on a bull move but I’m not going to invest in this company because it’s in the DRC I know others that did and made a ton of money so again that’s your own individual unique judgment because there is no Flawless investment
The next igniter is marketing or promotion how much marketing premium is built into the share price at the time that you’re sifting through because remember I said the triple ey sifter is better than the 9ps in my opinion because it’s getting you to think like an Insider it’s because the Insiders
Want to get in before everybody else they want to have the cheap shares and you have to think in terms of the same are you getting cheap shares even though you’re buying on the open market are you getting relatively speaking cheap shares how much Market premium is built into the share price
Insiders load up on shares before the marketing begins you want to be thinking in terms of the same line and maybe there’s been some marketing cuz the role of a CEO is to share and promote and Market the company that’s what they have to do it’s their job but has there been
A big campaign an effective campaign that’s really run the stock you need to think in these terms are you buying before or after a major promotion does management even know how to promote are they motivated to promote there’s some jurisdictions like in Quebec where there’s quite frankly
Do I say it I’ve metant what I would term some very lazy management teams because they have an access to Capital with some of the Canadian laws and flow through funds and such to where there is an arrogancy and a laziness when it comes to promotion that’s my experience
As a United States investor that is not every management team or company in Quebec however that is a number of them that I’ve experienced or there’s others that maybe had a big influx of funds and investment from a JV partner they have tens of millions in the bank and they
Are not as motivated to promote or they say well I like to focus on rocks and desktop studies I’m not as interested into that you better assess that when you’re thinking about this igniter when you’re talking to management you better do a little re YouTube research you better
Get a feel for what their I thoughts are regarding promotion whether they’re effective I was at a conference years ago and I was sitting in a room and it was exploro after explor Co doing a like a 15minute pitch SL presentation of their company one CEO gets up there and
Bores you to death and he’s like a scientist and it was kind of like I’m just going to be kind of crude and harsh here but it was like please give me money to fund my science project that I’m very interested in I like looking at rocks and I need
Money to look at rocks more okay forgive me if you think that’s too hard but you know what maybe he needed that feedback and I was like bore me to death then the next CEO gets up there and he presents on his company the project that he has
That he wants to drill out but he spoke to the desire to get wealth and what a discovery like this could mean if they hit they’re this market cap with this analog that they see here with it never being drilled before with these surface markers and these historical holes if we
Hit what this could mean for our share price and investors could be lifechanging so he spoke to the reason why I wanted to be there because ultimately I’m not a geologist I’m not in love with rocks I want to buy a share low and I want to sell that same share
Higher at some point in the future so listen and him his company was like an airplane taken off the Runway and it was like I wanted to grab my luggage and run down the runway after the plane and get on the plane there’s stories about how investment managers and people that
Manage institutional funds that there was a 24-hour rule that any time they listen to Robert fredland promote his company you weren’t allowed to buy his company within 24 hours of listening to him promote because he was such an effective salesman and promoter and so you had step back from that that buy now
Moment and just make sure that rationality prevailed with how you deployed cash and whether you should be in this company or not some guys are good at marketing some are not some come across as greasy-haired slickback used car salesmen others come across as integrity and effective and persuasive
And so you want a guy that comes across with Integrity but at the same time is persuasive at the Helm of the company that you would invest in because the share price will lag if you think you have real value but the guy doesn’t know how to articulate it and he doesn’t know
How to speak to why investors would invest in his company factor that in because there could be less of an an igniter when it comes to marketing and promotion then what’s the marketing plan if if you get that that from management you should ask them like what’s the plan to share the company’s
Story will these marketing efforts be effective what type of investors or dummies will they bring into the stock who are they marketing to is there currently an online tribe such as on Twitter promoting this story or does there need to be a tribe that’s going to follow and Champion the story online be
Developed you’re going to learn by experience you’re going to learn by likely getting burned but with this grid that I’m giving you that you’re going to fill in with this skeleton that I’m giving you that you’re going to put Flesh on you want to study the various tactics and marketing and
Promotional uh efforts of management and third-party marketers see what is effective see what’s not and you’re just going to learn from your own experience now we’re going to get to the third igniter which is value recognition whether it’s perceived or actual and I can’t stress that enough say the the
Share price goes up because of the there’s a Discovery Well I can tell you companies that I’ve owned that have had I thought meaningful discoveries that it didn’t go up because the particular Market didn’t reward it and you could have a deposit that you could say well look there’s so many
Ounces of gold there yeah but it’s run by people that nobody trusts or believe can sell it or do anything with it so the market’s valuing at that deposit at a near zero so don’t just think in terms of actual value if you’re thinking like gold ounces or billions of pounds of
Copper whatever it may be those metrics think in terms of value recognition because you’re buying a fractional piece of that company a share and you want to sell it for more in the future so you want that value to be reflected with more people buying that share so that
The share price goes up so that you make a profit on that share so think in terms of value recognition more so than even the language of a CEO value creation for shareholders sir I want value recognition I want to see the share price go up I understand you can’t
Control everything however this is what I’m looking for when I’m sifting through potential Investments I got a picture for YouTube listeners on the screen here and it’s from the kids book The Emperor’s New Clothes and you’ll remember that there were these swindlers that came to town that said they’re
Going to make the emperor you know the finest clothes and they get paid to do it and they fake like they’re making clothes at these Weaver’s wheels and then they go to the emperor and say here are your new clothes and there’s nothing in their hands and they put the
New clothes on the emperor and tell him how great he looks and the emperor is like looking at himself well I look naked but they’re telling me these are the finest clothes so they must be the finest clothes move forward in the story then the emperor is in a parade walking
Through the town and he does doesn’t have clothes on because he’s wearing in his head the finest clothes that these two Weavers who are swindlers could ever make him and people believe into the LIE believe into the perception that he has the greatest clothes and they’re walking and they’re like wow the greatest
Clothes and it takes a little kid to say the emperor doesn’t have any clothes on he’s naked and finally that douse of cold water against everybody’s face wakes them up out of their stuper gets them to think rationally and say the guy is walking through the street with no
Clothes on there are no clothes even though he was sold the clothes I give this as an example of perceived or actual the emperor actually didn’t have any clothes on however for a period of time people perceived that he had valuable clothes on this happens especially in
Exploration all the time so you need to say what future success or value is currently being given to this stock that could evaporate so quickly just like when that kid yells out the emperor doesn’t have clothes on and everybody’s like you’re right he doesn’t then everybody sells the share
Price this is why I want you to think in these terms of value recognition and perceived or actual what is valuable is debatable and arbitrary is the value perceived or actual I’m going to say it again and again remember you got the triple ey sifter you got igniters incentives which
We haven’t gotten to yet and Inhibitors which will keep the stock from rising of the igniters you’re next going to memorize that the three things that make the stock price go up our commodity price rise marketing or promotion and value recognition and in your mind you’re going to be saying to yourself
This is perceived value or actual value you have to come come to your own conclusion regarding that and it when it’s perceived value and there’s future success built in or something’s being valued that you don’t think is really valuable that’s when you keep close tabs over that stock
And and you you got have your finger on the cell if you need it because when things turn it can turn violently will this value be recognized and by who if you got a deposit who’s going to be the buyer is retail going to like this story
To cause a share price go up so think in term I’m repeating it for a reason think in terms of value recognition more so than value creation the language of a CEO effective marketing can get you to overpay for The Emperor’s New Clothes bad management or a poor jurisdiction
Will negate an otherwise valuable deposit do you remember New Foundland or New Finland in 2021 forgive my English pronunciation for my Canadian friends but do you remember the neology hotness that occurred when Newfound gold had their Discovery in New Finland and just anything that was in New Finland
Went crazy and then the same thing with lithium uh for the in the last year anything with a lithium name or was exploring for lithium was hot because of the commodity price and the perceived increased demand for lithium so there’s more value because it’s hot more perceived value there’s more perceived
Value because there’s a discovery nearby or it’s a hot sector or it’s a hot jurisdiction so keep tabs on all these things now we’re going to move on to the next eye of the triple ey sifter incentives what motivates management is their compensation reasonable are they worth it how much
Shareholder value have they created relative to what they’ve been paid over the years that’s that’s a metric I find myself looking at more and even asking okay you’ve been the CEO for 12 years how much have you been paid and I’ve had CEOs to where I’ve
Asked them how much do you pay yourself on a zoom call and then they said well that’s that’s in the public public domain you know you can look that up if you want to know and I was like really I took the time out of my day to
Have this call that you you’re a public CEO of a public company you shouldn’t be offended nor hiding the fact how much you make and make me look into the mdna you know what a turnoff that is to an investor when you say oh just look it up
Yourself when that investor took the time to talk to you tell me how much you make I make $175,000 Canadian a year I’m incentivized with these options I also have these restricted share units just lay it out how much have you made over the last de decade well I don’t know for
Sure but probably I’ve made about $2.5 million okay how much money have you put into the company thus far I’ve put into the company about $400,000 okay so this entity this gig has made you two million bucks over the last decade I don’t consider that skin in the game
I’m asking myself what motivates management meaningful skin in the game to me is substantial cash at risk relative to their net worth I also give management credit if they’ve done value adding sweat e Equity that they’ve contributed to the company or the project or to get things to where they
Need to go and you know it’s rude you don’t ask somebody what’s your net worth right but a million I’ve had calls with CEOs to where they told me they’re like bill I put a million dollars of my own money in this company and to be honest that’s my entire retirement account so
If I fail at this I’m not going to have retirement and this particular CEO even contrasted that he’s said you look at other guys that got cheap shares and they had some success so they’re worth 40 million bucks they put a million dollars into a company and brag about it
But it’s meaningless to them not to me relative to my net worth this means a lot and maybe they haven’t Struck it big yet and this is the first company that they’re at the helm of and they’re working their rear end off they’re working all their contacts they’re
Working 18h hour days and I don’t care if they get cheap shares if they’re via their Sweat Equity they’re adding value to this Venture Endeavor that’s how I look at it I don’t I want people to make money I just don’t want them to make
Money at my expense I want them to make me money at as they make money that’s what we’re looking for we’re seeing if the incentives are lined up if if they’re motivated to make me wealthy I’ve shared this story over previous years I’m sure there’s a lot of
Listeners that haven’t heard it before but former sponsor osino resources and the founder and CEO haodan we were chatting could have been six years ago at this point or something like that five years ago something and I invested in that company at 30 cents with a 50 Cent half warrant and then the
Share price ran up to a buck 60 or something like that and then the Takeover deal was announced a month or two ago at this point for like a buck 50 Canadian so that was a that was a solid exploration company win uh for me and we
Were chatting once at a conference and he said bill I bring all my friends into these deals that I’m in I bring my family and their money into these deals and the thing he hates the most is the thought of that he’d bring their money
In and they wouldn’t get it back or they wouldn’t make money off of his deal and he even referenced that in kind of like the exit interview that David fley and I did with him after they announced uh the sale of osino or the potential sale of
Osino and he also said to me at that time Bill I love making people wealthy one of my motivating factors is to have my investors get rich off of my deals have the people I bring into these deals these Venture deals make money I’m telling you that that is
The motivation that you want to look for and you can you can disagree with this or that or they should have done this or they should have done that you know those things are always going to be able to be debate of however that’s the motivation or that’s the heart that you
Want to look for because there are a lot of guys out there and a lot of you listening know who they are and you can point to concrete things to where they put themselves first above shareholders and a lot of these guys it’s almost like it’s Psychopathic
I don’t know maybe that’s too hard but they’ll still show themselves at all these conferences and I one friend pointed out he’s like man that guy did that he just gave the shaft to all those shareholders and Bill six months later he was at the conference walking around with no shame
Whatsoever and my friend’s like man is that like a psychopath I’m like yeah that’s that’s I’d be I’d be afraid to share show my face if I did to shareholders what what he did but apparently there’s no shame you contrast that with someone like ha that says I’m
In this to make people money that’s really what you want and people will articulate that management will will articulate it but do they really mean it and I can’t read people’s hearts fully but you try to get a sense as best you can with the discernment that you’ve been that you’ve
Developed over your lifespan and then you look at their track record because their track record is going to speak the loudest now if you’re going with a startup guy there there might not be the track record to look at that person could be mo motivated to make their
First big win and that could be in your favor some people they just they’re in it for legacy or or ego especially if they’ve already had a big win what are they still in it for I try to assess that and you want to invest in highly ambitious and competent management teams
That have a lot riding on the deal that you’re investing in because a a lot of these guys set themselves up in a bunch of different companies and they get the cheap shares and they’re going to then focus on whatever one takes off so if you’re investing and say I got this name
I’m investing in this name this well-known guy who had success here there and then you got to look at the fact hey he’s in eight other companies bro like if one of those takes off the company you invested in with his name it might become insignificant to him and he’ll leave it
Behind and I could name drop and mention someone to you that I talked to after I invested in the company and I knew the person I was talking to was friends with and had invested in this particular investor and I said I just put this amount of money in this
Small Junior company with your friend and what do you think the guy said he said if he actually focuses on that company he could be of use to it but your biggest risk if you’re counting on his name is that he pays no attention to that company and he only allows his name
To be used because it could be one of several companies that he’s going to make money off of over the next three years okay that’s the way it is but you want to invest in highly ambitious competent management teams that have a lot riding on the deal you’re invested
In do they even care about their reputation if they lose everybody’s money and bankrupt the company run it into the ground this this psychopath I told you about he didn’t care like avoid avoid avoid when it’s somebody like that you got to think in terms of inhibitors the
Third eye of the triple ey sifter what’s going to cap the share price we’ve been talking about what’ll make the share price go up the igniters we’ve been talking about what motivates management the incentives and now we’re going to talk about the Inhibitors what’s going to cap
The share price or prevent it from going up obviously a bloated share structure my Aussie friends might disagree with me a little but generally speaking if there’s too many shares out in too many hands it’s harder and it’s not a tight share structure it’s harder to get that
Share price to run there could be too many warrants out from private placements or convertible debentures or options from management or options to Consultants you should know the exercise price points and expiration dates if you’re going when you do this analysis of the inhibitors and if you’ve gone through you’re at
This third eye of the three eyes as you’re sifting through a potential mining investment then you want to spend a little more time on this for the executives and I know that there’s Executives that listen to the show and people in the industry I respect you and
Your presentation more even if I don’t invest when you give me these are the warrants out these are the options out these are the price points points this is the expiration dates when you do that work for me like mucho mucho respect that is that is a
Gift to investors and at least the intelligent investor and the sophisticated investor is going to appreciate and respect you more for it and honestly the dumb retail is not going to know the difference anyway so you might as well just put it in your presentation but that can take a lot of
Time or to kind of figure out but you got to know where those points are because if people have shares from warrants excuse me shares from private placements that also came with a warrant they are going to sell those shares and then exercise their warrants which means
At the warrant exercise price point and towards those dates there’s going to be a lot of downward pressure in the share price so you got to be aware of that they got shares in loose hands with fickle and unsophisticated Retail investors you could get a flood there
Could be eager sellers like previous bag holders from a p asked runup in the share price this is where technical analysis comes in place because as my friend Nick Santiago has taught me you know the share price is just indicative of human behavior and psychology so if
They bought at a certain point at a peak when the share price reached that you’re going to get an influx of sellers so you want to think about these things you want to know if there’s been any recent private plac placement financings because in Canada a lot of these
Financings not all now some of them are free trading immediately but most of them have a four-month hold so you want to know when that four-month hold comes off and in the week before that four-month hold you’re going to see a lot of selling pressure as the investors
In the private placement begin to short the stock to lock in their profits if there is profits to be taken and in my opinion I’ll just say this without naming names you will learn to avoid stocks with certain Finance years or Banks and there’s positions
That if I hold it in a certain financier or Bank gets involved in the stock I’m just going to sell and I’m going to walk away and you have to determine that for yourself just by observation you’ll determine the names that you like the names that you don’t
Like I’ve also seen institutions or funds that might have to sell unrelentingly now when you’re looking at your entry point you don’t necessarily know this in advance but you can ask the CEO and say hey are there any funds or institutions that own your share that
Might need to sell over the next six months that’s a question you could ask and hope they’re honest with you because I’ve invested with good CEOs that had technical success in which the markets got challenging and then funds and institutions had redemptions and they were forced to sell and when
They sell they are indiscriminate they are unrelenting and it puts a huge cap and downward pressure on the share price and can cut a market cap in half make it more difficult for the CEO make it more difficult to finance scares out retail and it’s like a self-fulfilling prophecy
On the way down you also got to pay attention to cheap shares and when the escrow releas is so if there’s been some cheap founder shares and this company’s been public for some years and maybe there’s new management I’m giving you an example that I’ve actually experienced
Myself then I’ve seen an Explorer share price destroyed when the previous CEO exe lead executive who was also a Founder relentlessly unloads his cheap shares and I mean pound the bid pound the bid pound the bid pound the bid finally I had it explained to me
Bill I’m sorry have no control over this guy he’s got his cheap shares out of escrow and he’s relentlessly pounding the bid and he doesn’t care the damage that he’s doing to the company so I’m just giving you some ideas to thought think about some Inhibitors there’s more
Than what’s on this list in front of you if you’re watching on YouTube bad management that’s not believable due to their past failure and Miss timelines that’s an inhibitor they lay out guidance they lay out the forward-looking statement but nobody believes them because they’ve cried wolf
Or they haven’t been able to hit only any of their self-imposed goals so that is a huge inhibitor or maybe it’s a bad reputation of a given deposit or a particular jurisdiction you want to be aware of that those are huge Inhibitors and remember the triple ey sifter this
Is this is the initial filter that you’re going to apply after it gets through this filter we don’t cover everything here but after it gets through this filter then you’re going to do your deeper analysis remember sad sift analyze in depth if it gets through the sifter and then deploy money
According to the opportunity that you’ve assessed after you’ve done your deeper due diligence and Analysis the triple sifter igniters incentives Inhibitors this is your Paradigm this is the skeleton that you’re going to add flesh to and of the igniters you need to remember that the three igniters are the commodity price
Rise marketing or promotion and value recognition and you’re asking yourself is the quote unquote value which is debatable and arbitrary is it perceived or actual in your opinion we’re looking at igniters in incentives and Inhibitors my final thoughts again the triple ey sifter it’s a skeleton you’re
Going to add flesh to you’re still going to have to do the Deep work if you want to learn how to fish and not just be given a fish you’re going to have to add flesh to this Paradigm and maybe you find that this Paradigm doesn’t work for
You and that’s fine too because it’s your money so it’s your decision but get to your nose quickly using this sifter if you decide to use it but if a possible investment makes it through your sifter that that time spend the extra time on due diligence but prior to that don’t
Waste your time remember Junior mining stocks are the best sector to make 10x or on10th your money you have to remember that it could work for you or against you you rent not buy Junior mining stocks you date not marry Junior mining stocks they are cyclical don’t
Invest unless you believe that you found a comp comptitive Advantage for yourself I hope the triple ey sifter that I’ve laid out here the three eyes igniters incentives Inhibitors is something that you can use and I wish you the best it’s a fun sector it’s also
Agonizing but you can make a lot of money you can lose a lot of money this is what I’ve used to get to where I am this is my articulation of my current thought process and how I approach this sector I appreciate your listenership this is Bill Powers signing Off
