Junior Mining Stocks Are on The Verge of a Very Substantial Rise says Fund Manager Willem Middelkoop

[DipSard]

Fund manager Willem Middelkoop shares that junior mining stocks are on the verge of a very substantial move. He points out that the Toronto stock exchange venture index just made a new low relative to commodities. Thus, indicating we have probably reached a bottom. Willem discusses his fund’s approach to investing in this interview. He also warns retail mining investors that the Canadian venture markets are worse than the wild west because the bad players never get punished. Whereas in the wild west the bad guys eventually got shot. Willem Middelkoop is the chairman of the Commodity Discovery Fund’s management team and is ultimately responsible for the fund’s investment policy. Willem is one of the pioneers of discovery investing and is the author of seven books on economics and financial markets.


youtu.be/3ObZh12SyP0

Excerpts:

- we have large positions in some amazing discoveries in Australia
- Australia is really the continent where more and more discoveries are being made
- i think Australia is underexplored compared to canada, it's very hard to find new discoveries in Canada really grassroots new discoveries or people or in canadian listed companies so we're very successful in australia
- it took us a lot of time and energy to research Australia , it's totally different market and don't forget you have 3-400 exploration companies listed there as well and there's much higher regulation
- the only problem there is that the outstanding shares are often in the billions so you end up with share price of one or two cents but percentage-wise of course the gains can be incredible there as well
- so for retail investors, the best thing to do for a new retail investor to the sector, to find the macro tailwinds that are going to be the strongest in the near term and to buy the most quality juniors that are going to profit from those macro tailwinds

- main focus is new discoveries but our second focus is the re-rating in starting producers so we always have this list available
- will update this list of companies which will start production within the next 12 to 24 months but you need to follow them very closely and wait for a breakout in the share price because they have been often trending lower for years and then wait for the breakouts
- preferably six to 12 months before commercial production starts and then you should really watch the chart and the results so any early sign that the start of production is not going well you should sell them right away because they can end up going bankrupt as we have seen with a few of them or go down 98% but the ones who who start production and become profitable, they will often gain 100 200 300 percent and we've seen a few great examples of that even in the last few years
- it's a great market for professionals like us and it's difficult to play that, so your Elliott wave analysis which previous times i talked to you, you always use Elliott wave is that coinciding with this relationship between how low the tsxv is in relationship to the commodity complex, Elliott wave has greatly helped us to to actually to point where you are in the cycle so all these major cycles they have the same structure because the larger investment audience always well acts like a herd so they all start buying and selling around the same time and with Elliott wave it's quite easy to to learn where you are in the cycle
- we had this huge run in 2020 but it was only a run i think, five six months so that was the move one higher and then you had the correction which we're in since the end of 2020 and this will bring a bottoming pattern which is the two and where we are there now
- actually i think we're just starting to move out of that bottoming pattern or we'll break out very soon and then you're witnessing the start of the move three which is often the strongest and largest and longest move upwards, so we expect a move up like we've seen in 2020 which brought returns of over 100% in over a very short time frame, so we expect a jump of over 100% but that this jump will take much longer so that there could be a rally which would last or could last for years and bring precious metal stocks up 200-250%
- it can be compared to a jump we've seen in 2010 2011 after the Lehman crash, 2009 2009-2010 that was was actually a move five that's the last move in this long cycle and that was a gain for our fund of over 300% in in just two years so i think it's an amazing situation
- it's one of the best, it's almost once in a lifetime opportunity to enter this space and that's why we see a lot of inflow as well