I THINK MINING

   If you invest in mining stocks by the numbers and trends, you must read the article in the October 12, 2009 New Yorker.  The article is called The Secret Cycle.  I provide a copy of the summary of the article at the end of this posting. The complete article is at this link. 

  The story is that of Martin Armstrong.  He concocted a theory of economic cycles and used his theory to grow rich investing in gold.  That is until he was imprisoned for running a Ponzi scheme.  Still in prison, he writes long articles on the cycles that “govern” investing.  You can read most at his website at this link.  A bizarre collection of ideas.

The funny thing is many in mining and investing believe in cycles.  Recall Douglas B Silver and his Super Cycle that graced the pages of the SME magazine and conference last year–before the economy changed.  I remarked on all this in a previous posting . 

After the past few months, can anybody still be a believer in mining cycles?  We will have to come up with new theories to explain what drives mining and investing.  I write about my theories at this link: it boils down to managerial and technical competence and incompetence.

Here is the summary from the New Yorker site of the article on investment cycles: (more…)

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   A true story.  A young mining engineer asked his consultant: “Why are you so worried about putting your professional engineering stamp to this design? ” The crusty old consultant snarled back: “Because if the structure fails, the shareholders could sue the mine, you, and me.”   I interjected that there are class action law suites pending against those involved in Galore Creek and Bellavista.  This brought silence to the room.  The young mining engineer agreed to the necessary testing and analysis. (more…)

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