At the end of every year I ask readers what they learned in the year just passed, and what they are committed to in the new year. I'm not one for New Year's resolutions, however, I do believe that the turning of the page to a new year offers an opportunity for reflection and assessment.
As financial market participants we can easily see what our results were, where we erred, and where we were successful. Oftentimes there are common themes in our unprofitable trades/investments, just as there are common themes in our successes. If I had to list my biggest lessons from 2021 they would be:
- Allowing trades that are working to work for longer (being more patient in taking profits).
- Choosing health (both mental and physical) is always a good choice.
- Learning to be stingy with my time and avoiding unnecessary distractions. Whether it's your time or my time, time is valuable. I usually know within five minutes of talking to a CEO or reading a pitch deck whether I'm interested. No need to spend more than five minutes on the ones that are clear "NOs".
- It's never really "different this time".
- Don't bet against Santa.
In 2022, I am committed to reducing my stress levels while delivering the highest quality writing and market results of my life.
Now let's hear from the CEO.ca community. I asked two questions (What was your biggest lesson or most memorable market experience in 2021? What is your biggest commitment or goal for 2022?) and the responses are presented without edits.
@CautiousNow - Biggest Lesson: Not just the importance of riding a winner, but remembering how to ride a winner-having a plan in place for potential proceeds; assessing the relative value proposition of new target positions against trying to hold out for maximum price on the winner and potentially sub-optimizing the return on the new opportunities; and, most importantly, staying grounded and remembering the things of greatest importance in your life.
Goals for 2022: Being much more disciplined on position sizing respecting early-stage exploration companies and new positions; positioning more fully on “don’t worry, be patient” stories that can withstand market turbulence; and having dry powder on hand to take advantage of special opportunities, particularly in December when there are so many quality names on sale.
@drjimjones - My most memorable market experience in 2021 was my discovery of Emerita Resources at .23 cents, I say this not because of how it's outperformed (up 1300% to date with a path to be 100x from when I first entered in the low .20's) but because it challenged me to upgrade my due diligence process.
I learned to employ unconventional means to get the "data'' to model my thesis, one example is the EL Cura Deposit on IBW, it was drilled by Rio Tinto in the 80'S but no one has the drill core data, all that is known is Rio internal documents state "2 mt at high grades". So I had a hole in my model. I needed more data.
After hours of google searching various ways of searching "El Cura Deposit" eventually on Linked-In I found a resume of a Geologist, buried with his credits, he had worked for Rio in the 80's in Spain on El Cura exploration program as an intern.
I cold called him at his home in BC, we had a chat about what he remembered and even offered to look through his garage for files for the missing data and send them to me.
I found the data I needed and thus doubled my position below .70. Later, it came public that Tafigura prior to losing IBW to Emerita had filed a massive drill program focused on El Cura. Where there's smoke...
My goal for 2022 is to spend more time in the present.
@Excelsior - The 2021 rollercoaster year for me started off with a well-timed trim with my dual-listed silver stocks into the #SilverSqueeze in early February, paired with harvesting some gains in Copper, Palladium, and Lithium companies, the wild ride higher in Uranium stocks, some good swing trades in Meme stocks and Crypto miners, and yet all while my large position in gold and silver stocks languished for most of the year. While it was a fun time to be a commodities investor this year, it was abysmal in the precious metals for the most part, so a strange bifurcation there.
A bright spot was being part of a half-dozen mergers and acquisitions this year in my portfolio which provided some solid premiums and got the animal spirits moving again in the sector trying to pick who would be next on the menu.
My biggest commitment in 2022 is to continue delivering the resource sector solid company interviews, market technical analysis, and macro economic insights from thought leaders, with my partner Cory over at the KE Report. May 2022 be a prosperous year for investors here at ceo.ca
@discoveries - Most memorable market experience in 2021: You are never too late to invest in a Tier1 World Class Discovery. Look what happened to NXE, GBR and GGP-ax. All were down 60-80% from their highs during the last severe corrections. Their recent gains (and M&A) show that fundamentals matter.
Goal: Continue to pivot our portfolio to the most valuable Top 100 discoveries worldwide, to show the world Discovery Investing can make the difference.
@Hunter - Great Bear made my year! But seriously, lesson wise, I need to be able to clean my house better. I am littered with starter positions in too many names.
My goals for 2022 are to clean up above to allow me better to take advantage of opportunities that present themselves, and have the cash to do that. Too much of my $ is always tied up in too many names, and I need to make sure I am more liquid, with more of my holdings kept in cash to put to work.
@TheGalvanizer - Well that was quite a year and left me wanting 2020 back. The roller coaster was topped off with a life changing transaction announced between Kinross and Great Bear. It’s been an amazing journey and an honour to work with the whole team but especially Chris, Bob and more recently Calum. In many ways Great Bear encapsulates the very best one could hope for and why we tolerate investing in this sector. That said and perhaps the lesson I have watched play out is that the search for ten baggers is not what we should be looking for. They come but I think one needs the discipline to be peeling a position down so a residual portion of one’s initial holdings can play to that result but maybe along the way you have taken profits and redeployed as the cumulative impact of 1x - 3x and parlaying is I think a better approach in this sector to long term success. It’s certainly my approach outside of my insider holdings.
As for 2022. Head down, continue the day job and turn the corner on what was an ugly year although still one of pretty reasonable relative performance. That said it’s a BS crutch to say well we didn’t fall as much as your peers. Falling means shareholders lost money. Not acceptable and I plan to reverse that in 2022 for all our loyal MAI shareholders as they deserve nothing less. Cheers and hope 2022 is a bountiful year for you and your followers.
@xenophon - 1) 2021 reinforced the importance of retaining a healthy cash balance; a reserve to deploy into select short-term opportunities. A defining feature of the junior resource market is periods of illiquidity, sometimes painfully long and at other times, fleeting, when a determined seller presents an opportunity to the private investor. My 2021 was a year of many small wins. Having free cash on hand allowed me to be nimble and take advantage of opportunities that had more to do with market liquidity than fundamental operational issues.
2) For 2022, I look to remain nimble, which means nurturing a cash reserve and not being excessively concentrated in any one investment. To hold true to that goal, I need a complementary mindset. My compass or guiding thought for 2022 is that we are at a phase in the junior resource market when opportunities will regularly present themselves; we are in a target rich environment. If I miss one then I know there will be others. Similarly, there is little to be gained by owning too much of something, since that might restrict my ability to realise other opportunities.
@tommy - The biggest lesson last year is to not overthink a nascent bull market and grab it by the horns. Last winter I started working on an idea for a startup and brought together some awesome people to get it going. Unfortunately I was too easily put off the trail by a skeptical partner and too comfortable in my situation to push as aggressively as in hindsight I should have. THREE of my buddies I discussed the idea with ended up starting a company like I had envisioned and raised significant sums for their business plans. I had the consolation prize of getting to be a small investor in their companies but my chances for a life changing win passed because I was too cynical and lazy. You have to maintain optimism as a promoter and not overthink it. Failure is not trying and failing. Failure is not trying at all.
I’m not going to cry poor me because I had an awesome year in 2021. We sold our business which was unexpected, thrilling and nerve racking all the same. Nothing compares to that.
What is your biggest commitment or goal for 2022?
A savvy investor friend asked me this question recently. I told him that I’ve become wary about goals because they have been, in my experience, a commitment to be unhappy until said goal is realized. His response totally gutted me when he said, “I see victory has defeated you.”
To him, being healthy, a good father and husband is the baseline. We must challenge ourselves every day to the point of being grossly uncomfortable in service of others.
I continue to want to be happy. This means to shun comparison to others and ego-desires. To sleep well, be kind, be of service, especially in my home. To foster deep loving laughing relationships with others. To maintain good health. And God willing, expand my territory.
Goals are outcomes. Fixation on outcomes is a path to unhappiness and unreasonable demands on others and life itself. Outcomes are more successful and the journey more enjoyable when we trust in the process (IE show up and do the work) and let outcomes be what they may.
I’ve had goals to lose 20 pounds and achieved it only to put it back on. Or goals to make money and achieve it only to move the goal posts. The fun is in getting the money, not having it, Bill Bonner says.
This is how I plan to let go of goals and have a good year. Thanks for asking me to share.
Tara Christie (CEO @BanyanGold) - The most memorable market experience was to see the transformation of Banyan in 2021 and the pathway for continued transformation through 2022. We started with a vision, optioned the AurMac properties in 2017 and with solid science, great people, capital discipline and a strong vision we are now on the way to significant resource update and with lots of blue sky exploration potential. The financing in August, was pretty memorable as well, being able to raise 16M with no warrants with institutional shareholders shows we have a whole new level of support and vetting of our project and team. We have momentum in our share price and our project and an exciting trajectory ahead.
We are gearing up for a continued resource expansion in 2022 with a 30,000 m drill program to build off the Resource update that we are on target to put out in Q2 – 2022. We have said that we feel that the 4 km x 5 km that we have focused on at AurMac has the potential for 3-5 m ounces, with our resource update and drilling in 2022 starting in January, we plan to show the market we are serious.
@TrevorHall (Mining Stock Daily) - Biggest Lesson: stop loss everything.
Commitment: Launch and nurture MSD Extra, a new product coming soon.
@Brandon - I think the biggest lesson of 2021 is an extension of 2020: that the various industry players are not always in sync. 2020 was all about retail, maybe driven by boredom and a stimulus cheque in their back pocket, they were doing a tonne of trading and share prices were on the rise. However that same year corporates, PE funds, and the like were busy fighting fires and had no time for new investments. Cut to 2021, and the exact opposite has played out; retail has anxiety and is dumping their holdings, while the big players have been super active. 2021 was a big year for M&A, and myself and my close friends have all found that corporates are returning our calls and PE funds are reaching out. This disconnect should give retail pause: the gold space is consolidating, GBR just sold for a hojillion dollars, there was a bidding war for Noront, and so much more. If you're trimming your junior mining holdings instead of adding, you're mad.
I think the biggest goal for 2022 could be "keep doing good work", but that's pretty obvious. Really, it's to avoid being the first player to blink. The market is being primed for an explosion in this sector, and after such a prolonged drought it is tempting to take the first passable offer that comes along. That's a risky move, because what's passable today could look like you got fleeced in even a month. So for 2022 I'm making a commitment to be a "steady hand", which doesn't mean "sitting on my hands", but it means not allowing myself to be pressured to act, either by depression or euphoria.
@fingerprint42 - I think that in hindsight we will see 2021 as a transition year with new highs for Bitcoin, Tesla and the general market but 2022 is when the chickens come home to roost. Bitcoin and Tesla are leading the crash with the S&P soon to follow.
@Oops - 2021 was certainly an adjustment year to develop a better trading strategy. Learning the ability to make emotionless decisions in regards to some trades. No posts in channel, no feelings of guilt by trapping anyone else, just straight in and out. My commitment for 2022 is to minimize bag holding caused by minimal bid support as it can't solely be based on daily averages at time of purchase, but more forward looking. If everyone else in the room is waiting for a bid to sell to, don’t expect much share price appreciation. So in essence, will be keeping cards closer to the chest and share less for some short term trades to prevent missed opportunities to exit the trade without emotion.
David Lotan (Chairman, Aurion Resources) - In regards to my thoughts on 2021, I would make the following observation. For thematic investors, in particular those trading the resource cycle, it can take several years to profit from an accurate prediction. Along the way you can feel trapped in illiquid positions while capital is disproportionately flowing to more popular sectors: cannabis, crypto, telehealth - to name a few. I think it's important to understand that even when you're in the right trade - measured by risk, expected return and your own personal edge - it is unlikely to be the best trade. The individual investor's greatest edge over the asset management industry is his/her freedom to invest for longer time horizons - but the price of this edge is the likelihood of having to withstand long periods of relative underperformance.
@Martin - The power of a stock to go up on good promotion and little else surprised me in 2021. Reconnaissance Energy Africa became a ten-bagger for me before exploration even started. It had become a large portion of my portfolio, and it was impossible to value the stock and predict its share price trajectory as it was rising. I thought a long time about how I would feel if the stock continued going up compared to how I would feel if it went down. I sold the majority of my position for what I considered a huge win, and then watched it go up close to 4x from where I had sold. I was fortunate to sell the remaining stock near the 2021 top before it corrected by 65%. Even though I gave up a lot of potential profit, I was comfortable that I did the right thing by selling the majority well before it topped out.
My goal is to be disciplined in selling and take some cash permanently out of my trading account to invest in other ways.
@Chiel - Probably one of the most memorable moments of 2021 in general will be the Kinross offer to take out Great Bear Resources. We all know the story, it traded for 50c back in 2018, 4CAD in 2019, 6CAD in 2020 and this year it’s been taken out at 29CAD a share. This brings me to a reminder for myself to stick with the winners. With winners I mean extraordinary stocks that just standout as quality companies. Great Bear Resources was one of those extraordinary stocks.
Looking back I made some money trading GBR but honestly I don’t know why I sold my position. I probably could realise a profit at the time and use the money to invest in some other stocks. No regrets there as it must have made sense at the time. Looking back however it was always clear to me GBR would be taken out sooner or later. So I guess the lesson for me is to be more disciplined, have more focus on my portfolio structure and having a clear strategy. For me this translates to having clear exit plans for each individual stock.
I think this is an excellent question that is helpful for any investor to answer. Actually it did make me think and I will continue to think about it after during the next few weeks. My main goal for 2022 is to improve my technical analyses skills and use more technical analyses in 2022 to improve my trading results. I will dedicate time on an weekly basis to realise this goal.
I would like to thank everyone who contributed to this year's post. I would also like to wish everyone a happy new year and an abundant and healthy 2022!
DISCLAIMER: The work included in this article is based on current events, technical charts, company news releases, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. This publication is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions. Junior resource companies can easily lose 100% of their value so read company profiles on www.SEDAR.com for important risk disclosures. It’s your money and your responsibility.