8 Mar 2012
Just reporting on my four days (March 4 - 7, 2012) at the Prospectors & Developers Association of Canada (PDAC) annual convention at the Metro Toronto Convention Centre. This is its 80th year and over 30,000 people attended the convention this year -- the highest number ever!
To my best recollection, I first attended the PDAC convention either in 2001 or 2002. For several years, I registered for free and newsletter writers and corporate presentations, as well as the Investors Exchange which housed hundreds of resource companies. A few years ago, I paid for an admission to the trade show, just to see what it was like, even though I don't work in the mining industry. I really enjoyed visiting booths of the various Canadian provincial governments, as well as governments outside Canada, which showed what their countries have to offer.
Last year, I attended a short course for the first time, on "Investment Fundamentals: Understanding mineral exploration and resource development and the relationship to company stock prices." It was a full day course with half geology and half investment. The lunch was a great opportunity to meet people. I chatted with University of Toronto Ph.D students and also met some folks from RBC. Both were there to learn aspects of mining investment that they were unfamiliar with. The geology really overwhelmed the RBC folks, but, since they have more clients investing in resources, they were there to learn. I enjoy both the geology and investment lessons -- they are both my "comfort zones", which is probably why I have been drawn to mining investment all these years.
This year, I became a member of PDAC. I get all the benefits of being a member of an association, including a great discount on the convention as a "delegate". For me, that meant not only being able to attend the talks for investors, corporate presentations and Investors Exchange, it also includes the trade show, opening ceremony, and technical sessions. There were also several presentations by representatives of different countries which I did not attend. As well, all attendees are invited to join companies who organize their own corporate presentations - enticing investors and others with cocktail parties. Like other trades/industries, there are award shows, dinners, galas in the evenings to keep attendees entertained. I went to some events last year but did not attend those extracurricular events this year. I did meet some friends at PDAC and we had dinner one evening. In just four days, one could not possibly be bored and run out of things to see and do!
My goal as a delegate and member of PDAC this year was to learn a lot! I definitely did that this year! My mind is always on thoughts of what would make me a better investor and learning from industry professionals on how to evaluate the company and projects is invaluable! The flavour of the year is graphite and vanadium and other specialty metals and minerals will also make headlines later on, if it has not done so yet. I like to stay ahead of the crowd. I try to read resource magazines and listen to the professionals, who will provide information well before mainstream media from which most people will receive their information. By that time, I will hopefully have done my homework and will not be deceived and be swayed by the crowds who really don't know much. They simply hear the "good news" or "bad news".
One of the things I have learned from Warren Buffett, called the most successful investor in the world, is to know your investments. I recall many years ago, when Warren Buffett was asked whether he owned internet company stocks, he said, no, because he did not know much about the internet. I said to myself, if the world's most successful investor, Warren Buffett, will not invest in something he doesn't know, who am I to take those chances? I started by reading up on security analysis of sectors I was interested in. At first, it was Diamonds and Mining. Security Analysis may sound dry to every day folk, but, even if you have a professional investment/financial advisor working for you, I think that if you are giving someone else your hard earned money, you should be aware of what they are doing with it. I assume that you want to be in a better financial position than you were in the past. What I am trying to say is, if you want to invest in mining stocks, learn about mining, mining companies, and what they are digging up from the ground. It is risky to give money to someone that you don't know. Most of the time, it benefits THEM -- the financial advisors, the fund managers, the company. You need to think of what benefits YOU.
Let's say, you are going to a grocery store to buy bread. First of the all, it's easier if you know why bread is good for you and that's why you want to be able to identify what bread looks like. If you see a loaf of bread costing $1.99 in Toronto, then, you would hopefully know, that's a really good price. So, a $3.49 loaf of bread is kind of high but it is a "regular" price for some of those known brand names at the store. You can either wait for a sale (like me), and buy 2 loaves or you can buy one and pay the regular price. As an investor, you ought to learn what is good for your portfolio through self-education and asking your financial advisor, in order to determine whether something is good value. In other words, is it "on sale" or not? Many people end up buying a stock when it's so overpriced. Those who bought it at a lower, undervalued price, will make greater profits. Those who bought high, well, you end up with less money in your pocket, or, as I say, less coffee (or espresso) money!
In the March 1st episode of KaTsZoNe, I wrote about "Time". I mentioned that I had "an obsession to be on time'. I also have another obsession and that is to help people, which is also a good thing and a bad thing. Sometimes, people don't want my help with something, so, it may seem that I am just taking over their lives by helping -- that is not a good thing. Then, there are times when people who want help and if I am able, I will help. However, when it comes to financial management, I am not a professional, and although I am comfortable with managing my own finances, I still cannot say that I have become like Warren Buffett. I would suggest to my friends that they seek financial professionals who can work with them. I know it is not easy to find someone you can trust because the minute you find a good one, they might leave the company or go into another field. So, you have to be prepared to take on the responsibility of looking after your finances. You need to learn, so, you will not easily be deceived. If you recognize a "sure thing" which looks "too good to be true", you should not only be extra cautious, I think you should walk away!
When I started looking into resource stocks about ten years ago, my financial advisor at the time admitted that he did not have the team in his company who had a good grasp on this sector. He could not make resource stock recommendations for me. I decided to take my money out and began to do my own research and asked reliable professionals and investors. That's how it all started for me. There were times (especially during labour strikes) when I did not receive a salary. But, if I had to, I knew I could sell some of the stocks I had -- they always seemed to do well when I found myself times of possible shortage of income. I remember my earnings on stocks and mutual funds were equivalent to my salary at that time.
PDAC is such a well-organized annual event and it has taught me so much. But, on a day-to-day basis, I cannot rely on conferences and conventions alone. So, when it comes to financial management, it is a year-round lesson. I keep your eyes and ears open to news. I subscribe to good journals and magazines. I have access to professionals and other reliable people for advice.
I think the best thing that happened to me was when I had that quick conversation with my former financial advisor who happened to be on Business News Network (BNN) today.
I am off work the rest of this week. Sometimes, attending a conference is more exhausting than going to work! I have lots of information to sift through and I may have to type up some notes. I am going to look into possible new investments. I have also been thinking of taking geology courses, but, that might not be anytime soon - just something on the back of my mind.
Next event - Van Halen on March 17th at ACC! From rocks to rock music! Woohoo!
Hope all is well and remember, spring is almost here! Woohoo!!!
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