Exclusive Interview – Peter Grandich: “I’ve Now Committed 75-80% of My Investment Dollars to The Junior Resource Sector”
May 1, 2012 | By Tekoa Da Silva
I had the chance once again to speak with Peter Grandich yesterday, publisher of The Grandich Letter and author of “Confessions of a Wall Street Whiz Kid.”
It was an exciting interview as usual, as decades of investment knowledge and experience pours out of Peter when he speaks. For those who don’t know, over the last 25 years Peter is one of a few people in the world to have correctly called major market tops and bottoms—warning investors of the 1987 top, the 2007 top, and the 2009 bottom—within days of their actual nominal peaks and bottoms.
During the interview, when asked about the junior resource sector, Peter said during this depressed market he has, “Committed a cardinal sin of my own…Because of how cheap they got [select junior resource shares] weeks ago, I’ve committed an extremely large sum of money, probably close to 75-80% of my investment dollars towards the junior sector…Several of them I probably have seven figures in it—I’m not saying that to brag, but to give an idea of how much I’ve so called bet the ranch here.”
In discussing the oversold levels of one of his client companies and personal investments, Peter commented on Alderon Iron Ore. “Here’s a company that I’ve called the son of Consolidated Thompson, it has all the same management, it took all the same [corporate] maneuvers to develop a resource in Canada of iron ore—and less than two weeks ago they announce the world’s second largest steel company (and China’s largest steel company) bought a 19.9% stake at $3.42…and what did the stock do since then? As we talk it’s trading at $2.89. So the thought process is this—are the people who sold it after that news—are they smarter—or were the Chinese that paid $3.42, will they end up being smarter? I’m betting on the Chinese.”
Commenting on signs of a bottom in the junior resource market, Peter added, “I recently I posted an article that noted how many juniors were selling at a large percentage of just their cash holdings, some above, but they’re selling for less than what their cash is worth. These are things that take place at bottoms not tops. While it’s painful, and we’ve seen that pain exaggerated…when you see 1/10th of the normal volume of daily trading and the stock is down 10-15%—that’s just people selling at any price, into a no-bid market. Those markets happen towards the end of a bear move, not in the middle or the beginning.”
When asked about the recent directorship appointment of famed investor Jim Rogers to the board of Spanish Mountain Gold (one of Peter’s largest investments and consulting client), he commented, “Having been acquainted with Jim over the years, and probably one of the handful of experts that I look up to…putting his name on this would serve no financial reward to him that he couldn’t gain elsewhere…I have to assume he believes there is validity and hope for them to develop [a producing mine]. If and when they succeed, no one is going to say, ‘Oh, Jim Rogers was the key,’ but if it fell on it’s face, blew up or turned into a nightmare scenario, his name would get stained, and I don’t see a man of that [stature] taking that risk unless he feels there is really something of value there…it would come as no surprise to me…that he and or some of his closest friends end up becoming shareholders as well.”
This was just a short sampling of the many issues(the stock market, energy, Europe, & more) Peter spoke about during this must-listen interview. It is required listening for all serious investors.
To listen to the interview, click the following link and/or save to to your desktop:
Interview also posted to our YouTube Channel
To learn more about Peter visit “The Grandich Letter” at Grandich.com
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