Starting with Part 2 - looks like he's getting his capitulation
- because we didn't see a capitulation sell-off in conjunction with what I saw as a bottom in July of 2013 I thought we might escape one. And earlier this year I was saying we were going to trade in sort of a saucer shape recovery but channel with higher highs and lower lows, lots of volatility. It looks to me now there's a 50% chance of a capitulation sell-off, this year, starting very soon. My experience has been in three prior markets that the capitulation sell-off triggers the recovery.
- So if we get a capitulation sell-off my suspicion is that, at 61, it will be for the real dross, the juniors, the best remaining buying opportunity of my career.
- My experience has been that 7% or 8% of my decisions generate all of my performance, 100% of my performance. My winners have to amortize my losers and leave an acceptable rate of return. And the way you do that is with a warrant.
- My problem with this down cycle has been that I had expected a rational response from the issuers earlier in the cycle and I have been telling my clients for 12 to 18 months that this will be the final grand banquet of my career in terms of private placement financings with rational warrants and the type of recovery we experienced together in the early 1990s and the 2000-2002 market. I mean those were the two markets that made my career, that made my fortune. I had expected we would have had that experience in this cycle in the last 18 months, which did not occur.KK: Yet, perhaps.RR: I hope.KK: Is your view that some patience is still warranted.RR: I think you have to. In certain circumstances things get cheap enough.
Part 1 - Regions he likes for exploration
- So I'm more interested in mineral endowment and the cover charge relative to the political risk. In terms of gross mineral potential relative to exploration competition I like the Tethyan. So from Istanbul to about Mongolia, that is probably my favourite destination in the world.In the new fund I'm raising, if I had it closed today, I would immediately try and raise private placements in Russia. In the early 90s I invested with the Lundin family in Russia in a closed fund that was a 50-bagger. It was not easy. But it was cheap. And the geological endowment was spectacular. I'm also excited about southern Argentina. People hate Argentina.