Byron King On the Bull Market

Precious Metals
Gold Investing

Byron King of Agora Financial took some time to chat with the Investing News Network at the recent Sprott Natural Resource Symposium in Vancouver about the current bull market and how investors can succeed.

Byron King of Agora Financial took some time to chat with the Investing News Network at the recent Sprott Natural Resource Symposium in Vancouver about the current bull market and how investors can succeed.
“Cost and time are your enemy as an investor,” he said. “You want cheap discovery and you want it fast and those are the kind of companies that you want to be looking for.”
Listen to the interview below, or read the full transcript, for more of what King had to say.

Interview Transcript
INN: Hi, I’m Teresa Matich with the Investing News Network and here with me today is Byron King, editor of the Rickards Gold Speculator with Agora Financial.  Byron, thank you for joining me.
BK: Hi, Teresa. It’s great to be with you. Thank you.
INN: So, how does it feel to be back in a bull market?
BK: It feels wonderful because the bear market was really long and bleary. It was four years of what I call the mining zombie apocalypse, where things deteriorated, and declined, declined and they just kept waiting for something good to happen. And it just never seem to pop-up. And even companies that were doing really great work, they would drill a wonderful hole in the ground and come up with super grades or super discoveries, they’d announce it and people would sell into that happy event and boom, the price would go down again.
So it was tough to raise money. It was tough for companies to survive. A lot of management teams went away, and it was really frustrating, certainly, from a standpoint of someone who writes a newsletter, covering the energy of the mining industry, to write the letter and steer the readers in the right direction. But it’s good to be back. It’s good to be back.
INN: Right. And earlier we talked about – congratulations to the people who’ve hung on, but what about people who are kind of new coming into the space right now?
BK: Well, yes.  I mean, if you live through the zombie apocalypse, you are a survivor and good for you. For those who were in the space and who left or perhaps who are new to the space, I mean you’ve never invested in mining before, I have some really good news for you. We are on the early days, we are on the early upswing of what’s going to be a major bull market that’s going to rise, I would say for several years.
I think there are several reasons just baked into the cake of why this should continue. Nothing goes up in a straight line continuously. We’ll have some pullbacks along the way. But for those of you who missed the last six months because you didn’t believe it, or you were busy, or you were visiting Antarctica or something, if you missed the last six months, it’s still not too late. I would caution that a lot of the companies that were selling for dirt, dirt, dirt, cheap back in January and February, they’re not so cheap anymore.  You’ve got a hundred and 200, and 300 percent increases in share price but that’s considered that some of these companies, they’ve increased 100 or 200 percent after falling 90 or 95 or 98 percent. So there’s still a lot of upside left for some of these guys to recover.
And then these companies that we’re looking at, many of them are still – are relatively new.  Some of these companies that I’m looking at are really crystalized during the bear market. They had some money, they were able to raise some money.  They scrounged it together. They were able to put together a land package, for example, and tie up a bunch of claims that people were getting rid of, or they were able to do some, just some fundamental drilling. They were able to just eek it out, squeak it out. And now they are ready to take off.  
So a lot of the names that you thought about years ago and maybe you invested in a company and you lost some money, you’re never going to touch that company again. That company might not be there anymore, or the company might be under new management or the company is completely transformed into something else. So you really have to – it’s stock picker’s market right now in terms of where the upside is, but there is upside there, I assure you.


INN: And what are some strategies that investors can use to pick the right stocks?
BK: Well the number one absolute, do-not-neglect-this priority, you must pick companies with really good management. We talk about serially successful chief executive officers, company presidents, what have you. These are people who in the last two or three mining cycles, were able to build companies and let’s say, sell them and they got the money to prove it.
You are talking about people who have a gift, have a serious ability to put those land packages together. You are looking for geologists who’ve been able to make really strong discoveries in the past. You want people who, their minds are conditioned, their brains are quick acting, and they’re ready to go out there and make good calls and good decisions and not just try to re-develop some old piece of gold pasture that’s been through many, many hands over many, many years, that’s never made anybody any money. So the first thing to do is look for really good people.  
INN: Yes, meeting people in person is really important, and also getting a handle on the history of the project and how many times it has changed hands.
BK: Now a lot of these projects, I mean, there’s hardly anything new under the sun.  There was some famous book that said, “there’s nothing new under the sun.” But when you look at many of the projects that are being developed today, if you check the history, you will find perhaps that there was  mining 100 years ago. There was mining back in the 30s. That maybe a large company did a major program in the 50s or the 60s or the 80s or the 90s.  You are going to see that with a lot of these projects.
It’s very rare to come upon an absolutely just pristine greenfield project that has just never been kicked around or whatever. There are a few out there but not very many. So the history is important but also we’re looking at a different level of technology and a different level of capital investment these days.
You can do things today with metallurgy that you couldn’t do years ago, you can do things today in terms of data processing. I like companies that have a high tech approach to what they’re doing.  I mean, everybody who’s probably listening to our discussion right now probably has an iphone or a Samsung or whatever in their pocket. I mean, that’s one of the most powerful supercomputers in the world sitting in your pocket.
I mean, that kind of supercomputing power is literally millions of times more powerful than what took the astronauts to the moon back in the 1960s and 1970s.  So we have a lot of data processing capability today. And in terms of just accumulating big data, satellite data, aerial data, geophysics, geochemistry, surface mapping, putting it all together into an integrated package. In addition to the people who’ve been serially successful, you are looking for people who can apply hi-tech to the problem today, to the challenge today, to drive cost out of the equation.
You want to drive cost and you want to drive time out of the equation. Cost and time are your enemy as an investor. You want cheap discovery and you want it fast and those are the kind of companies that you want to be looking for.  
INN: Interesting. Thank you so much for joining me, Byron.
BK: Thank you. It’s a pleasure to speak with you.
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Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.
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