A few stocks I am buying
By March 13, 2022– Published on
Readers always ask what is in my portfolio. I don’t share this, typically because I don’t recommend anyone follow my advice. My risk tolerance, time horizon and available capital are all unique to me and dictate a lot of my market activity - so it would be impossible that what works for me would work for you.
My friends who write ‘advice style' newsletters are always dealing with headaches - subscribers who take their direction, but apply their own time horizon and risk preferences and then bombard the author when the trade isn’t working out the way they think it should.
I don't envy them one bit. My newsletter is like my playground - I can write about whatever I want. Talk smack about Trudeau one week, talk shop the next. But since so many of you are curious, I’ll share a couple of stocks that I am buying right now. In total I’ve got 40 companies in my portfolio, which is entirely too many. I have been and will be continuing to consolidate some positions in order to simplify my life.
Given the state of global affairs, I am re-balancing - for me, that means more commodities. So I will share four commodity plays and then one nutrition company that I am getting pretty excited about.
I will re-state:
I absolutely do not give investment advice
None of the companies below paid for the exposure in this letter
On that note, a few things I am buying in the market right now…
Nova Royalty - NOVR
Nova was the first mover in the copper and nickel royalty space. I met CEO Alex Tsukernik shortly before he took his company public. He used his early advantage to lock up agreements with nearly all of the world's top producing or near producing copper and nickel mines. It struck me as the safest way to play the green energy revolution - despite the fluctuating supply and demand economics of the less necessary elements in the rare earth metals space, copper and nickel are steadfast, irreplaceable ingredients in electric conductivity and battery manufacturing. NOVR is my proxy for the copper and nickel price. If I believe the cost of both metals will rise in the next decade (and I do), then NOVR is my leverage on that rise. I don’t obsess over the share price, I dollar cost average in and expect to hold this company for a decade. I am still buying.
Aris Gold - ARIS
If there was ever an all-star team in the mining industry, this is the first round's picks. Frank Guistra came on my show in November of 2020 and told me that the “team” was going back in one more time. The “team” being himself, Ian Telfer and Neil Woodyer, who in their previous escapades created Endeavor Mining, $8 billion market cap and GoldCorp, which sold to Newmont for $10 billion. Not the worst track record. The executive team gets better as you go deeper. It is early days for Aris and the gold market has kept the price low, but I was too young to invest in Endeavor or Goldcorp. So Aris is my only chance to sit court-side for Michael Jordan’s Chicago Bulls. I expect to hold this stock for the decade.
Pure Gold Mining - PGM
Rick Rule told me years ago that he would have made 10x more money and worked half as hard if he had only invested in the same 3-4 entrepreneurs. I believe that for my generation of investors, Mark O’Dea is one of those entrepreneurs. Mark came on my show in 2020 and told my audience they would be pouring gold bars by year's end. He did it. Since then, they’ve realized some operational challenges and the share price plummeted. O’Dea made the hard call and replaced his CEO, but now has to wait for the market to regain trust. I am not waiting. I am adding to my position now. They are a high grade gold producer in a great jurisdiction (Canada) and are lead by one of the most competent and serially successful teams in the mining business. No brainer. I also own Mark's copper company, North West Copper, NWST.
Tier One Silver - TSLV
This is far more speculative - but long time readers know I am bullish on Chairman Ivan Bebek. He is still a young man in the context of his resume - he has delivered 500% and 1800% returns to shareholders with his previous companies, and as I shared above with Mark O’Dea, I believe that success often begets more success. I speak with Ivan frequently, he is still a workaholic with a massive chip on his shoulder and feels like he hasn't done enough to prove his value yet. I love that. The wild card for TSLV is the first time CEO, Peter Dembicki. I knew Peter when he was an advisor at Canaccord Genuity, I invested in a handful of his deals. I have watched him very closely over the last year to see how he transitioned to becoming a company builder and can say that this man has come home - this is where he should have been all along. He hasn’t put the puck in the net yet (it’s an exploration company), but he just released his phase one drill results from his Curibaya project and they showed two rockstar holes. I had Peter on my show last weekend to run through his recent results and affirmed to my audience that I would increase my position 24 hours after I published the video. I did. And 24 hours after that, I bought some more. I am also a shareholder of Chairman Ivan Bebek’s gold company, Fury Gold, FURY.
Outside of the commodity sector, here is something interesting…
Long time readers will recall Else Infant Nutrition (Ticker: BABY), a company I discovered through my Cantech Investment Conference in Toronto in 2017. They had a patent to disrupt the infant formula space with a nutritious, sustainable, dairy free alternative. From our first round of investment, the company delivered a 2000% return.
The same team that supported BABY’s go public process introduced me to another milk alternative company, Hope and Sesame - a sesame based milk replacement. The ticker is MYLK. Initially, I thought the alternative milk business was becoming too mature… but some recent developments have caught my attention.
Contrary to popular belief, oat milk, the darling of millennial latte’s, is not a healthy alternative to dairy.
Here is why: Glycemic Index (GI)
GI is a number that ranks the speed at which sugar is released into the bloodstream. The smaller the number, the less the impact the food has on your blood sugar.
Simply put, a GI score of:
55 or less = low (good)
70 or higher = high (bad)
Believe it or not, apples and donuts have a similar amount of sugar:
An apple, with a diameter of 3 inches will have roughly 19g of sugar
A doughnut, with a 3.5 inch diameter, will also have roughly 19g of sugar
However, you may notice that you feel very different after eating an apple versus eating a doughnut.
Glycemic index. The GI score on that doughnut is 76 (high/bad). The GI score on the apple is roughly 38 (low/good).
Less blood sugar spike, less rush, less crash. Additionally, high blood sugar is a root cause of damage to blood vessels, increasing risk of heart disease, stroke, kidney failure and nervous system degeneration.
What does this have to do with oat milk? The production of oat milk involves adding enzymes that break down the oat starch into simple sugars, creating a sugar called maltose. If there was a super villain in the sugar world, maltose would be it.
Remember that 76 GI score on the doughnut? Maltose scores a 105.
If you are a lover of oat milk lattes, I apologize for going down the rabbit hole on this one. But when it comes to nutrition, I am all about the rabbit holes.
Second data point, Russia is the world's second largest producer of oats, so I am very curious to see what happens to the supply economics of the core ingredient.
None of this means that Hope and Sesame is a winner, but the dots are starting to connect for me. I recently procured a pallet of Hope and Sesame products for my local coffee shop in Squamish to give it a test run - I’ve asked them for brutally honest feedback. I’ll be sure to share if it is anything material.
That’s it for now. Have an epic week.