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Jekyll Island Series – Eric Sprott: Keynote: Make no mistake… We are in a Resource Bull Market

Eric reminisces about the early days of Sprott and where we are today in the gold market. He points out that Gold holds it’s value, unlike fiat money. It’s hard at times to recognize that we are in fact in a bull market; however, we are as the TSXVenture Exchange has had an excellent rally over the past couple of years.

Price increases in the gold market have a significant impact on the profit line of a company. Price is more important than production. We are in an exciting environment for speculation. Some things are speculative, and some investments are well reasoned sure bets with limited down-sides.

Eric says to look for opportunities where you can get multiples on your money and where the downside risk is less than 50%. If you know you have a good investment than all you have to do is sit back and wait for it to play out.

Mr. Sprott discusses several companies that he has a stake in and why he thinks they are good opportunities. It’s difficult when you have a winner to determine how much further a stock can go up. You need to look at how much higher it can go up and look for even better opportunities. Try not to get scared out of your trade. Eric doesn’t believe in technical analysis he prefers fundamentals.

Company management shouldn’t be conservative when it comes to pricing things they should be realistic. As investors, we need to know what is going on. You want to see the future early and know where things are going today not next year.

How do you find out what is going on? First of all, you listen very carefully, and you have to read things critically. Connect the dots. If the information is in the public domain, you can use it. Sometimes smart people are talking about companies and what they are into. You have to learn to use whatever you can, and the Internet can be a great resource.

Talking Points From This Week’s Episode

• Gold is in a bull market even though it may be difficult to recognize.
• To find good opportunities you need to do your homework.
• The Internet is a great resource for doing research
• Eric discusses various opportunities and successes in the juniors.

Eric Sprott has more than 40 years of experience in the investment industry. After earning his designation as a chartered accountant, Eric entered the investment industry as a research analyst at Merrill Lynch. In 1981, he founded Sprott Securities (now called Cormark Securities Inc.), which today is one of Canada’s largest independently owned securities firms. In 2001, Eric established Sprott Asset Management Inc.