Diehards and Last-Ditch Campaigns

TORONTO – “This is the worst I've seen in 30 years.”

The scene was the recent Sprott-Stansberry Natural Resource Symposium in Vancouver. The subject was mining equities. And the opinion was becoming familiar …

Golden pet rock as found in nature … the Camel Gold Nugget – 9,3 kg

Photo credit: Arthur Lukyanov

The price of gold is down by about 8% over the last five years. Precious metals miners, as measured by the Market Vectors Gold Miner's ETF, are down by about 70% over the same time.

GDX (at the top) vs. gold over the past five years – click to enlargte.

Mining execs say banks won't return their calls. Promoters say they are thinking about taking their firms into cloud computing, video games, or Chapter 11.

“What do you know about cloud computing?” we ask.

“Nothing. But I know gold mining. And I know it's no place to make money.”

In the broader markets, everything was green on Wednesday – almost. The Dow was up. Oil was up. Shanghai stocks were up. But gold fell $2.50 in New York to close at $1,096 an ounce. And it was down another $10 in overnight electronic trading.

Here at the Diary, we are champions of the down and out. We support diehards and last-ditch campaigns. Partly, it's a romantic and poetic attachment to the underdog. But there's a practical reason, too: There's often money to be made in woebegone assets.

We favor Russian and Greek stocks… provided you have a very long time horizon for your investments (and a strong constitution to boot). The Russian and Greek economies are said to be at death's door.

More woebegone assets: RSX (Russian stock market ETF) and GREK (Greek stock market ETF). The woebegone stuff is what one actually needs to buy if one wants to make serious money investing in the long term. Often this takes a lot of patience and a good stomach. But it is is almost always worth it – click to enlargte.