The 2010 Toronto Resource Investment Conference

The 2010 Toronto Resource Investment Conference, held on September 25 and 26, provided an interesting context both to gauge the overall health of the resources sector and to reconcile the early stage recovery jitters and uncertainty that continue to weigh heavily on investors minds.

The focus for Cambridge House Conferences through 2010 is with the resource sector; gold, precious metals and other minerals.  The format featured speakers who offered investment advice to individual investors, investment dealers and fund managers involved in the markets. These speakers comprised analysts, fund managers, writers and advisors.  The event included heads of public companies involved in world wide resource exploration, developing new technology, green technology & clean energy, and emerging growth companies.

Nicole Evans, Account Executive and Business Development Advertising & Marketing for Cambridge House, confirmed approximately 162 exhibitors and 2600 pre-registered participants.  A relatively decent weather report for the last weekend of September supported attendance numbers.  Event staff expected overall participation to total in the range of 3000 to 5000.  The number of exhibitors this year represented approximately 6 percent  to 12 percent growth over the previous conference.

Springing Forward and Falling Back

Earlier in March, the palpable excitement and energy of PDAC 2010 seemed to be an indication that a new global bull commodities market was on the verge of being back and ready to lead a surge.  The pervading sentiment among many exhibitors and attendees seemed to suggest that underlying fundamentals were still in the inception stage; however, the signs that a healthier macro economic context were advancing.  The price of gold has increased an additional 18 percent since March, yet the overall mood of most participants at this weekend’s conference was resigned to uncertainty and lack of confidence.  The absence of a confirmed identity was also demonstrated in the diverse variety of speaker workshops.  Gold and precious metals (silver, platinum and palladium) were a strong theme, but other interests were emphasized including emerging markets, energy, hyperinflation, green investing, demographics, debt and prospering in a secular bear market.

Panel Highlights

One of the highlights of the well organized conference was Saturday’s keynote panel discussion.  The discussion was chaired by Michael Levy, whose expertise in gold and precious metals goes as far back as when gold was trading at $35 per ounce and was actually illegal to own in the US.

The panelists included both highly publicized and well reputed media personalities Kevin O’Leary and Diane Francis.  Kevin O’Leary started a very small software company in 1993 and through numerous mergers and acquisitions the company eventually sold to Mattel for $3.7 billion. Mr. O’Leary currently co-hosts “The Lang and O’Leary Exchange,” appears as a venture capitalist on the Canadian show “Dragons’ Den” and is a “shark” on the United States’ version of Dragons’ Den, “Shark Tank.”

Diane Francis is an editor at the Financial Post, entrepreneur, author, broadcaster, speaker and columnist. Diane has been a columnist for 25 years with the Toronto Star, Maclean’s, the Southam newspaper chain and Sun newspaper chain as well as a regular broadcast commentator on business and politics.  Diane has recently written on the uncertainty of markets, economies, interest rate environments and corresponding gold spot prices.

Key Takeaways

Kevin O’Leary began his remarks sharing a personal account of a very early lesson he learned in investing from his mother’s predisposition to purchasing “Bell Bonds.”   She would invest a third of her pay in these conservative and safe bonds that yielded 6.5 percent.  Her “myopic phobia” was passed along through a pervading message to both of her sons every Thursday, “never spend the principal, only the interest.”  Mr. O’Leary shares an element of this investment thesis with the overarching theme of deploying capital to countries where GDP growth will exceed 6 percent.  He has a very bearish forecast for North American capital markets, believing that a migration of capital from the developed world to emerging markets will continue for the foreseeable future eventually leading to the decline in quality of life for North Americans.

Diane Francis espoused cautious participation in emerging markets.  Her approach favors seeking largely capitalized countries which have exposure through their business and segmented revenue streams in the developing world.  She did, however, also see a large scale secular trend involving the gradual transfer of wealth from Western to Eastern economies.

The Future: Where to From Here?

In an environment with so much uncertainty and directional trading on low volumes it will be interesting next year to look back and recalibrate our thoughts and portfolios. Hopefully, the exercise will see us closer to understanding the proper analytical framework to properly allocate investments.

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