Read on Twitter
Sprott has moved down the food chain, which is what big investors do in a bull market. Of necessity, he finds himself buying positions large enough to be a reporting insider in many cases. He has to because, thanks to past successes, positions smaller than that just don't 1/9
move the needle for him. Eric's not stupid. He knows he's putting himself in a position where, unless he wants to carpet bomb a company's stock, he may only have one out: takeovers. He's betting a bunch of that companies he's bought that do, or will, have resources will 2/9
get bought out or that, in the late innings of a giant bull market, even a 10% plus holder can sell without the market caring, or that there's been enough dilution that he's under 10% and no longer reporting. I'm sure Eric doesn't want to be the "Pinetree Capital" of this 3/9
cycle (you'd have to be around the resource sector for over 10 years to get that reference). He won't be, because he's playing with his own money, not other people's. I'm sure he accepts the fact a bunch of the scores of positions he holds ultimately go to zero. 4/9
It's the cost of doing business. That will come later. Right now, he's "Uncle Eric" and a ton of retail money follows him into every deal he becomes a reporting insider on. Again, Eric's not stupid and well aware of the impact his name has. I don't think he's courting it, 5/9
really, but he's happy to use it to advantage. Does Sprott get better deals on pricing and warrants than just about anyone else? Hell, yeah, he does. Why wouldn't he? As long as the market thinks he has the royal jelly, a CEO would be a fool not to take his money. The 6/9
increase in market value he gets from Sprott's name is a large multiple of whatever dilution created by doing the placement. And Sprott has a reputation for writing follow up cheques when needed. He's a great shareholder to have. All that said, he's playing the odds, just 7/9
like all of us. By all means, follow Sprott into deals. He's a smart guy. But remember how much of the gains from Sprott placements are pure momo. It won't salvage the deal if later results are crappy or metals go the wrong way. And, at some point, the law of large numbers 8/9
will catch up with Sprott as they do for everyone. The Sprott premium will dissipate. When that happens, don't hate on the guy. He's a brilliant speculator and a good guy, He's not holding a gun to your head if you buy in later. We're all grown ups. #gold #silver $GDX $GDXJ
