One of the oldest lies in the history of human civilization is that money can be free or cheap.
The lie permeates everything from get rich quick schemes, to the lottery, to monetary policy to disreputable gold miners, to science itself.
Case in point: every year or so, a news story is published suggesting that scientists can create gold from lead.
It’s such an old trope that I’m not sure we know when the concept of alchemy (turning base metals to gold) even began. 1,000 years ago? Maybe longer?
It seems like every major civilization from Imperial China, early Muslim dynasties, European kingdoms through the renaissance – they all tried it! Amazing to think of these vastly disparate cultures all trying the same nonsense.
More amazingly still:
The concept persists!
The Independent (a UK-based newspaper) just published this story two days ago, about physicists doing alchemy.
Of course the details matter. These physicists would have needed to spend billions or maybe even trillions of dollars to make a single ounce of gold out of perfectly good lead.
The lesson:
There are no shortcuts. Unless you have a supernova star on hand, you can’t make gold out of lead. And unless you have a high quality mine, you can’t even mine gold at a profit.
Even at high prices, the economics are tilted against low grade mines.
The temptation is to just buy anything with a good story or to buy an ETF.
But the reality of gold investing is much more boring and pedestrian.
It just requires the same kind of diligence, judgment, patience and planning as any other venture.
I know gold is shiny, but business is black and white.
You’re either doing the necessary hard work to find value among the rubble, or you’re not.
There is no alchemy. There is no secret magic formula for turning mud into gems. There’s only hard work.
Anyone who says otherwise is lying to you for their own benefit.
The secret is really just doing the work.
That’s why this week I’m traveling to Vancouver for another conference.
It’s not because I like being away from my family or being in Canada during a massive snow and ice storm…
It’s because these conferences are filled with mining executives. And sometimes the only way to know if a company is the real deal is to talk to someone one-on-one. Eyeball to eyeball.
I’ll be posting some of my insights from Vancouver next week.
I’m excited, because every time I go to one of these events, I find something useful. Something potentially profitable.
Stay tuned…
Best,
Garrett Goggin, CFA, CMT
Lead Analyst and Founder, Golden Portfolio