Portfolio Update: Long Gold And Silver Juniors

Its been a while since my previous portfolio update (see here) and I've completed my change of direction. I've dropped junior base metal mining stocks almost completely and have switched to junior precious metal mining stocks. I expect I'll be posting an up-to-date profile of each of my holdings over the next couple of weeks.

The only base metal mining stocks I continue to hold (NRDS.PK and GPXM) are those that are so illiquid that I knew going in that I was going to hold until they achieved their potential (or went bankrupt trying). I knew I would not be getting out just because of some set backs or a change in my outlook on their commodity. NRDS.PK continues to be well-undervalued at foreseeable copper prices and GPXM continues to be a producing moly microcap with excellent exploration upside.

Here's my portfolio by individual company and metal. It does not include a roughly 5% position in SKF, the "ultra short" financial stock ETF. This probably deserves a separate post, but when I look at the bruising the house-building stocks have taken and how long they have been falling, I think the financial stocks are in for a long period of falling stocks prices and have a small bet accordingly.

After a close look, you'll agree that this is an insane portfolio according to the commonly accepted guidelines employed by certified financial planners. This is because:

• Its highly concentrated in a speculative sector (precious metal mining stocks) that seems to be at the top of a cyclical high.
• Every single stock is either a micro-cap miner (with significant aspects that make them incomplete from a conservative investor's standpoint) or is a troubled mid-sized  miner (I consider these to be turn-around candidates).

Here's why I do not consider this to be insanely speculative:

• If you include the discounted cash flow value of my day job and my paid off home the above portfolio is only 50% of my net worth.
• I am watching the precious metal sector very, very closely and intend to exit if it turns sour.
• Apart from metal prices, each of the stocks while having significant risk, has risk that is specific to that individual risk. This risk is thus diversified across the stocks.
• I understand each company pretty well and understand both their upsides and downsides.
• Each position (except NRDS.PK and SST.V) is small enough that I can exit within a day or two should I decide its appropriate.

Even with these considerations, I realize I am accepting much more risk than an ordinary investor would want to face. So, I don't recommend that you do what I am doing. That said, each of the above stocks are worth looking at as speculative buys. Each has a good potential to double (or more than double) over the next 12 to 18 months.

Here's my portfolio by metal.

Here's my portfolio by country. Those in the "other third-world" category are not in relatively low-risk countries (e.g. New Guinea, Ghana, etc.).

Comments

[MontyHigh]

Thanks for the comment. Will take a peek at SBB.V and SVL.V.

[drooyrich]

Hi, just came across of your blog and on fr and gss I could not agree more since both are in my account - among the silver juniors (I am heavily in juniors) I like SBB.V and SVL.V, both incredibly undervalued with huge potential - also, have you looked at Uranium juniors ? I have Fiu.to and Stm.v bought recently - thanks