On Friday November 16, 2012 at 11:00 am Benjamin Cox presented “How to Survive and Grow in a Down Market” at the San Francisco Hard Assets Conference. Benjamin Cox is the Founder and Managing Director of Oreninc, a boutique merchant bank and research firm focused on early stage exploration and natural resource fundraising. Mr. Cox also serves as the CEO and as Director for Roche Bay plc and Aston Bay Ventures, junior exploration companies focused on iron ore and copper respectively in northern Canada. Previously Mr. Cox was a Senior Analyst with D.E. Shaw, a major U.S. hedge fund.
During the presentation, Mr. Cox focused on three main points:
What to remove from your portfolio when the market takes a downturn
How to successfully find stronger assets
Useful tools available to the public that help to astutely make these investing decisions
Everyone needs to reevaluate their holdings periodically and this is especially true during down markets. One of the most significant decisions to make is which “losers” to toss and which “winners” to snatch up. In his presentation, Mr. Cox discussed how to define “losers.” For example, does the flagship property have a material resource statement, or has management told you it’s just around the corner at every conference over the last five years? Is the company raising money productively, or has your stake been heavily diluted so management can cash in while exploration goes unfinished? Lastly, being sentimental about your investments won’t make them better; sometimes you need to walk away even if it means a loss.
The next step is finding the right “winners” for you in order to replace the “losers.” Mr. Cox explained his thoughts on the importance of intelligently selecting commodities for investment purposes. According to Mr. Cox, these decisions should be based on supply/demand constraints with regards to global economics, mine pipelines, foreseeable mine shutdowns, and natural scarcity. Mr. Cox then spent time highlighting key factors in choosing winning companies, looking at good management team’s traits and what makes a good project. Strong projects will be defined both in terms of resource in the ground, geological location, and development hurdles. Hurdles discussed will include political risk, corporate/project ownership structures, permitting risks, and NIMBYism (Not in My Back Yard) risks.
The final portion of the presentation divulged and discussed tools that investors can use in order to make smarter, more informed decisions. These included resources such as Google Earth, USGS, Sedar(corporate filings), and geopolitical risk assessment. Mr. Cox also reviewed how Oreninc’s research, including free reports, can help determine which companies are “winners” worth pursuing, and which are “losers” worth kicking to the curb. At the conclusion of the presentation, a brief Q&A was held.
This article is also featured by The Prospector Resource Investment News and can be viewed here.
Thank you to everyone who attended the conference over the weekend in San Francisco. If you have any further questions or would like a sample report, please email firstname.lastname@example.org