It’s not a formal membership-fee type of club, more a casual once-a-year gathering of 20-25 mining people at a steak restaurant in downtown Vancouver. We meet in late January to contemplate the state of the industry, drink good red wine and pick stocks.
The rules are simple. Everyone gets to chose 1 mining stock with the caveats that it can’t be a company you work for and it can’t be halted or private. At the dinner, whoever chose the stock that went up the most over the year is declared the winner.
Everyone who attends has to bring a $100 bottle of wine except for the winner, who eats and drinks for free. We run it like a fantasy hockey pool with the overall loser picking first for the coming year, but last place also gets to run the club for the next 12 months (which is why yours truly is running it this year. Thanks for nothing Volcanic Gold…)
This is where it gets a bit more interesting, because we also track the overall performance of the portfolio of stock picks, naively believing a) that we’re somehow smarter than the average resource investor and b) that we represent an experienced and deeply knowledgeable group of mining insiders who should know what they’re doing. Yeah right.
Two years ago we thought we were the bees knees. Our portfolio was up an astonishing 250%. In fact, our record was so good, if we were a proper hedge fund we’d have ranked almost the number 1 resource fund in North America. If you’d invested $500 in each stock we picked, you’d have made close to $32k profit. Not bad for 12 months.
For the last 24 months, reality has bitten. The market has put us firmly back in our place while lustily kicking our butts down the sidewalk, up the alley and into the back yard. Year-to-date our portfolio is down 26% and, tellingly, 22 out of 25 stocks we picked are in the red. To be fair on us, this is a reflection largely of the “nobody gives a fuck” state of the resource sector which is veering dangerously close to a 10-year low.
On the bright side, I’m leading the pack. My pick, Evrim Resources, is up a gratifying 196% which means I’m currently on track for a nice free wine tasting. Chin chin!