All this month, I have been posting articles on the Oil and Oilers, Gold and Goldminers and Copper and Copperminers here at billcara.com, at Williams Market Analytics and at 4-Traders.com. I hope my readers have found them both informative and, to this point, in-the-money.
As part of the WMA Cara Capital Managers team, my chief responsibility is now to manage the Natural Resources Portfolio Strategy, which has been in development testing for the whole year. Today we released the Factsheet, which will soon be SEC-filed in the company ADV for public consumption.
The Factsheet describes the strategy as follows:
The WMA Cara Natural Resources Portfolio Strategy offers exposure to precious and industrial metals, energy and other basic materials required by a growing world economy. Using rigorous investment analysis, we invest in a portfolio of 12 to 20 fundamentally attractive companies with market entry and exit timing based on our proprietary trend & cycle studies. Our long-term plan is to achieve higher risk-adjusted returns than passive buy and hold strategies such as the benchmark S&P North American Natural Resources Index by participating in equity markets when sentiment is bullish while carefully preserving capital during negative environments. We also seek to support our clients’ lifestyles despite inflation and provide diversification benefits through low correlation to traditional asset classes. The portfolio is managed by senior analysts and advisors with expert working knowledge of these industries.
Any interest should be directed to “Owen Williams, CFA, DBA” via [email protected]
Admittedly, I have much more industry experience with mining of all types than I do with Oil & Gas, however, I have studied the energy industry with great interest for some 18 months now because I believe it is late in a lengthy and exaggerated Bear cycle, which has provided incredible opportunities for portfolio gains in the next two years.
Within mining, some of you will know that I have personally visited mines and been underground with management and industry analysts from Quebec to North West Territories including at the Arctic Circle, and throughout British Columbia and down to Colorado. Some companies I personally arranged the financing for and took one of them public on the Toronto Stock Exchange. Over a career spanning about 35 years, I have attended mining conferences in many cities including the Prospectors & Developers of Canada in Toronto at least two dozen of those years plus many others in San Francisco and New Orleans.
About 30 years ago, I recall the first meeting I had with Peter Brown who had invited me to visit his office in Vancouver for a personal discussion that he said was important. As I knew his high profile reputation, I accepted. Meeting privately, his first question was, “How many promoters would you say you know?” Since I knew that Peter had financed more natural resources companies in Canada than all the major banks combined, I proudly answered, “From 600 to 800. Personally.” He replied that when I had been recommended to him he hadn’t heard my name before, so he checked with his six biggest clients who frequently raised capital in Toronto, asking who they dealt with in the East. Peter was quite surprised to discover they all dealt with me, whether it was at Dominion Securities or Dean Witter. They recommended me. So, just a few minutes into our initial meeting, Peter stood up, reached across the desk and said “I want you to build Canaccord Capital from scratch in Eastern Canada. As my personal partner, I’m offering you whatever capital you need. Do we have a deal?” Before I blinked in amazement, he extended his arm for a handshake, which I accepted. I sat back down and remember mumbling these words, “Peter, I have met you for just eight minutes and you’re going to back me with how many millions?” His answer was “Millions” and he was always a man of his word. Shortly after that, I leased about 13,000 square feet on the penthouse floor of the Toronto Stock Exchange and my life was changed forever. Canaccord, under Peter Brown’s leadership, grew to become a notable world player in the securities industry. I moved on to start my own Exempt Market Dealer so that I could manage many of my mining company clients with their needs in the capital market. However, I attribute my success in being introduced to Peter Brown and after that to the incredibly hard work I had put in over the previous six years, much of it with hundreds of associates in the mining industry.
Not all of that experience was enjoyable. Once, I returned from one field trip having caught pneumonia from the underground mines I visited. On another, where I visited four silver mines that had been owned by the Hunt Brothers of Texas, the CEO, Mine Manager, Merrill Lynch mining analyst and I were caught unawares in dynamite blasting just 100 feet away while we were trapped underground. Our group had just exited the silver mine at Great Slave Lake, enabling the miners to return to their work, when the mine manager asked the CEO if he wanted to check out some exciting findings of the past few days. Still in full gear, we descended about 120 feet via rope ladder down a five-foot wide hole that had been blasted from the surface to the mine level. It’s an escape route called a manway. Talk about claustrophobia?
After reaching the bottom, we crawled along a four-foot high, beam-supported tunnel to a point we were being shown quite obvious veins of high-grade silver. Suddenly we were flattened and stunned by a series of incredibly loud explosions. Laying in the water, I expected my life to end in seconds from what was likely a mine collapse. Instead, I heard one of the others say, “They shouldn’t be doing that!” and I thought, amid the explosions, that maybe we’d live. Climbing that rope ladder to get out, I’ll tell you, was much easier and a lot faster than going down. We were so shocked, we quickly boarded the nearby float plane and took off. On a fly over, however, we saw two analysts from New York, the ones who refused to climb down that rope ladder, waving from the shoreline. In our fright, we had left them by mistake. After picking them up, the plane returned to Yellowknife, moving the next day north to Great Bear Lake at the Arctic Circle, where our small group toured three more silver mines. Unfortunately, on my return to Toronto, I discovered I had permanent loss of hearing in one ear.
Yes, I have earned my stripes in the mining industry. The stories I could tell if I had the time. But, time is not to be wasted as now I have a Natural Resources portfolio to oversee. I look forward to telling you all about it. I hope you will be interested.