In the first segment of this interview, the subject was “Gold, The Great Gamble”. In the 2nd segment, we discussed what type of stocks to pick and why. In this last segment, we give specific stock picks.
SmallCapPower.com: Do you prefer producers, near-term producers or pure exploration plays?
Cyna: Number one choice is near-term producers. We’re not as comfortable with pure exploration plays versus a project where they believe that they have found a significant deposit and that deposit has been drilled but not yet totally proven.
SmallCapPower.com: What about the prospect generator model?
Cyna: We’re not especially in favor of those although some of them have succeeded. Golden Valley Mines Ltd. (TSX.V:GZZ) is one. And they have a gold prospect near Osisko Mining Corp.’s (TSX:OSK) Canadian Malartic gold mine.
A whole bunch of companies have tried that model. In that particular model a company goes and finds a deposit but in order to do that they generally will pick up as many properties as they can and then try to drill them. Some companies drill one for five holes. Some companies drill more. When they find what they consider their prime asset or the company builder, they’ll often try to get rid of all of the other properties that aren’t quite as high on their list. Therefore, when you’re trying to follow those secondary deposits or those joint ventures or those other companies that have formed, what you’re trying to do is follow the secondary assets. We don’t ascribe to that belief. As a general rule we’ll go with the company that’s got the prime asset.
SmallCapPower.com: Let’s go by commodity, starting with copper. What are some names that offer upside in the copper space?
Cyna: Well, Mustang Minerals Corp. (TSX.V:MUM) is a good example and they’re in Canada.
SmallCapPower.com: What about small-cap silver names?
Cyna: The first choice there is Argentum Silver Corp. (TSX.V:ASL), but I’m a director of that company so I’m biased. Another choice would be Soltoro Ltd. (TSX.V:SOL), which is also a very good company.
You centered some of your earlier questions on gold and while gold may not be our favorite commodity, we think gold is still a wonderful place to be. One of the favorites there is Lexam VG Gold Inc. (TSX:LEX). Lexam’s CEO, Thomas Meredith, is a honest guy whose first priority is running the company, rather than running the stock market. And recently that company appointed Rob McEwen as chairman, who has a stellar reputation in gold. I don’t think that you could choose a better company that has more upside.
SmallCapPower.com: If a retail investor was looking to play the small-cap space, what advice would you offer them?
Cyna: We started the blog some time ago to help the average investor understand what they were doing when buying stocks. We would often see people buying stocks on a tip from a neighbor or a broker. We think that you should never buy stocks on tips.
We wanted to give the average investor a way of understanding the language that the market professionals use. Most of the information in the blog is common sense: this is how you analyze what a stock is; this is how you pick a stock; this is what an ETF is; this is what a mutual fund is; this is what a junior stock is, and so on. Our blog is to educate people in how to look at these types of stocks.
Toles: Not only that but to make sense of all of the craziness that you hear from the talking heads on TV. And to help investors avoid panic situations by teaching them to be patient and unemotional in their decisions.
Each investor should have their own set of rules, their personal criteria for purchasing something and selling it, too. They need to stay focused on building their own set of rules and criteria and then following them.
Cyna: The next point I want to make is that when the so-called professionals make a suggestion, because you usually make your picks based on somebody’s suggestion, ask common sense questions about that company because companies operate on common sense. A company will not zoom up in value if you hear some gossip somewhere. By the time you’re buying it, somebody in the inside is selling it. And that’s a very dangerous situation.
So when somebody suggests a stock to you, look at the stock and do your own investigation. Never buy something unless you have done at least a minimal amount of your own research. And all of that information is now available to every investor.
The Cymor Strategic growth Funds and its principals may hold positions in each of the securities mentioned.
We may or may not have positions in the securities we name. In making an investment decision numerous factors must be considered including portfolio balancing, timing, cash and capital reserves, asset allocation and other factors. Readers are strongly advised to do their own research. Matters discussed contain forward-looking statements that are subject to risks and uncertainties and actual results may differ materially from any future results, performance or achievements expressed or implied.
Views expressed are opinions and not investment advice. Persons investing should retain a licensed professional to guide them and not rely on the opinions expressed herein. This report is neither a solicitation nor a recommendation to buy or sell securities. We are not a registered investment advisor nor a broker-dealer. The information contained herein is based on sources which we believe reliable but is not guaranteed as being accurate or a complete statement or summary of the available data.
