Benj Gallander: These Industries Have Potential in 2018 | Summary and Q&A

TL;DR

Contrarian investor shares insights on the market mood at PDAC conference and discusses potential opportunities in the resource sector.

Key Insights

• ❓ The mood at the PDAC conference is currently positive, but the contrarian investor prefers a less crowded conference with more undervalued stocks to choose from.
• 😮 The resource space in 2018 is generally positive, with certain commodities performing well, but the rise of cryptocurrencies and marijuana stocks has diverted some investor attention.
• 🤑 The impact of US and Canadian budgets, particularly tax cuts benefiting the rich, raises concerns about long-term consequences and the potential rise in gold prices.
• 💓 The contrarian investing strategy focuses on buying beaten-up stocks with specific criteria and aims to exit before the market bubble bursts.
• 👖 Stocks that the investor currently likes span across industries, including mining, insurance, and the internet of things.
• 🫢 Opportunity is seen in the oil and gas sector, shipping industry, and drilling companies that have been heavily beaten down.

Transcript

Read and summarize the transcript of this video on Glasp Reader (beta).

Questions & Answers

Q: How does the mood at the PDAC conference this year compare to previous times you've attended?

The interviewee, a contrarian investor, explains that they have been attending the conference for 25 years, experiencing both good and bad times. They prefer a less crowded conference, as it indicates more potential buying opportunities for them.

Q: What are your thoughts on the resource space in 2018?

The investor highlights the positive performance of certain commodities like cobalt and lithium but also mentions the diversion of investment into cryptocurrencies and marijuana stocks. They express reasonable optimism but admit difficulty in finding bargains in the current market.

Q: Can you speak about the impact of US and Canadian budgets on the market?

The interviewee believes that both countries have made mistakes by focusing on tax cuts that primarily benefit the rich. They argue that the money should instead be given to the lower-income population to stimulate consumption. While this may provide short-term economic benefits, it could lead to difficulties in the future and potentially drive investors towards gold as a safe haven.

Q: What does being a contrarian investor mean?

The investor explains that they buy into companies that have been heavily beaten up, focusing on established companies with at least a 10-year track record and 100%+ upside potential. They prioritize financial ratios, management, and commodity sector analysis. They aim to generate high returns when others join the party and exit before the bubble bursts.

Q: Can you share any stocks you currently like?

The investor mentions stocks like Leagold Mining, GMP, Corridor Resources, and Stantec. They emphasize the importance of dividends and revenue generation by the companies they invest in.

Q: In which industry do you see the most opportunity in the resource sector?

The investor sees opportunity in the oil and gas sector, particularly due to the ongoing recovery, as well as in the shipping industry and drilling companies that have been heavily beaten down.

Q: What advice do you have for investors for the rest of the year?

The investor suggests paying off or paying down debt as a way to invest in oneself and reduce personal risk profile. They caution against seeking big returns through leverage and speculative investments without considering personal financial stability.

Summary & Key Takeaways

• The interviewee, a contrarian investor, shares their positive outlook on PDAC conference due to fewer attendees, indicating more opportunities for them to buy undervalued stocks.

• The resource space in 2018 is seen as positive overall, with certain commodities like cobalt and lithium performing well, but the rise of cryptocurrencies and marijuana stocks has diverted some investor attention from the mining sector.

• The impact of US and Canadian budgets on the market is discussed, highlighting potential short-term economic benefits but raising concerns about long-term consequences on stocks and the potential rise in gold prices.

• The contrarian investor explains their investment strategy, focusing on buying beaten-up stocks with at least 100% upside potential and using specific criteria like financial ratios, management, and commodity sector analysis.

• Some stocks the investor currently likes include Leagold Mining, GMP, Corridor Resources, and Stantec.

• Opportunities are seen in the oil and gas sector, shipping industry, and drilling companies, specifically those that have been heavily beaten down.