TGR: Rick Rule has cautioned against generalizing about the entire junior mining sector as a whole, because so many of these companies don't find anything. How do you decide which resource investments are worth looking into? Are there criteria? Is there some kind of a litmus test that you use?

DC: Rick is absolutely correct about that. Although the sector is capable of going upwards 10 or 20 times as a whole, most of the stocks in it are total garbage. The only gold, uranium, silver or whatever appears on their stock certificates, not in the ground they control. There are thousands of these little stocks, and yes, we have criteria we use to evaluate them. We use a tried-and-true due diligence process we call The Eight Ps of Resource Stock Evaluation to separate the wheat from the chaff among speculative investment opportunities.

TGR: Would you share that with us?

DC: Sure. This is a guide to help investors ask the right questions about every individual company they're considering. This list comprehends the essential, but you could write a book about each of these eight points.

• People: Who are the key players in the company and what are the track records of the companies they've managed? This is by far the most important criteria.
• Property: What resources are in hand, and what (if any) are the additional resources they expect to find? How well proven are they? Assessing this takes geological and engineering expertise.
• Phinancing: Does the company have enough cash to meet its next-phase objectives or have the ability to finance the cost of reaching those objectives? It's no longer a case of grubstaking a prospector and his mule.
• Paper: Capital is almost always raised from the issuance of new shares. Is there a lot of cheap paper out there that will keep the share price down? Will new or existing warrants or new shares dilute your own shares? Who owns most of the paper?
• Promotion: How and when is the company going to get itself (and its stock) noticed?
• Politics: Is the country or region mine friendly and stable? Are foreign investors welcome? Is there environmental resistance?
• Push: What's going to move this stock? Drill results, merger or acquisition, increase in the price of the underlying commodity, resolution of a legal issue?
• Price: What are the potential price moves of the underlying commodity that could have either a positive or negative impact on the value of the company?

Full article: http://equedia.com/blog/view.php/How-to-Speculate-Your-Way-to-Success-Doug-Casey?utm_source=April+22%2C+2012&utm_campaign=April+22%2C+2012&utm_medium=email