Episode 29: Adrian Day – Natural Resources – The Asset Class on Sale

Adrian is President & CEO of Adrian Day Asset Management they personalize their investor’s holdings to meet their clients underlying needs. Different clients have different stocks with their firm, and for that reason, the performance will be different. They manage accounts globally and hold equities from around the world. They also invest in smaller market cap companies but are very careful with their due diligence.

Many gold mining companies have written off billions of dollars in assets that were purchased at high prices. There are exceptions like Franco Nevada who held onto their funds and did a buying spree when prices were low. Many companies don’t work with the underlying financial cycles. There seems to be a direct correlation between management payroll and assets being written off.

He discusses the various bad decisions that mining companies have been making. Decisions like buying assets when prices are high, dilution of shares and overpaying management. Junior explorers often don’t have any revenue, so they dilute their shares to raise revenue. The values of these companies have to go up enormously just to maintain the shareholder’s value. The mining business can be tough when only one in ten thousand mining anomalies, for example, will ever become a decent productive mine. There are a few companies that have properly invested funds into finding real assets and their share price has done well.

Gold has underperformed the broad market. As an investor, you need to compare and contrast asset classes. Gold stocks have done even worse than gold; mining stocks is one of the few asset classes that are undervalued today.

Talking Points From This Weeks Episode
• Gold stocks are considerably undervalued.
• Few gold companies have managed their companies well through the bear market.
• Today is the right time to be buying good gold stocks.

About Our Guest
Adrian Day is considered a pioneer in promoting the benefits of global investing in this country. A native of London, after graduating with honors from the London School of Economics, Mr. Day spent many years as a financial investment writer, where he gained a large following for his expertise in searching out unusual investment opportunities around the world. He is President & CEO of Adrian Day Asset Management. He has also authored two books on the subject of global investing: International Investment Opportunities: How and Where to Invest Overseas Successfully and Investing Without Borders. His website is: www.adriandayassetmanagement.com

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