Investor in junior resource stocks rides commodity market's swings

LARRY MacDONALD

Special to The Globe and Mail

Robert Hirschberg

Occupation

Owner/manufacturer of promotional-clothing company

The portfolio

More than a dozen junior resource companies, including Lithium X Energy Corp., Pure Gold Mining Inc. and NRG Metals Inc.

The investor

The book Reminiscences of a Stock Operator describes how the legendary Jesse Livermore made and lost fortunes in the stock market. Toronto resident Robert Hirschberg has a similar story. And the trading slips to go with it, as he told Me and My Money.

His market adventure first came to light in a 2015 interview by CEO.ca. There was also a mention in the investment book, Market Masters (ECW Press, 2016). Here is a timeline for Robert Hirschberg’s story.

Beginning in 1981, a commodities boom sweeps his $20,000 in junior-mining stocks to a value of $850,000 in five years. But this is zapped by a margin call during the market plunge in October, 1987. (The value of his stocks fell below the loan value so the brokerage that had lent him money asked him to put in more or it would do a forced sale – which it did, at a loss to him).

In 2001, he put $20,000 of his wife’s money into Noront Resources Ltd. and Waseco Resources Inc. They, and some other trades, surge to $1.1-million by 2007 – thanks to another commodities bull market.

The crash of 2008 slashes the portfolio to $350,000. He takes $200,000 out and leaves the rest in the market because there are no bid-ask quotations for the remaining stocks.

The market roars back and by 2011, the “worthless $150,000 portfolio” has skyrocketed to a “magical” $15-million. Then a correction drives the portfolio down 70 per cent by 2014.

Currently, he is biding his time, waiting for the next upswing.

How he invests

Mr. Hirschberg looks for four things in a company: 1) executives with successful track records building up junior companies; 2) good assets; 3) access to funding; and 4) lots of upside (“blue sky potential”).

Lithium X Energy is headed by Paul Matysek, a geologist with a solid track record of developing junior miners over the past 30 years; lithium demand is rising due to new technologies such as electric cars.

Pure Gold Mining has properties close to a large, proven deposit; several million dollars are in the bank.

NRG Metals has property near a graphite producer, and small-scale production on a Guyana gold property with a potential for expansion.

Mr. Hirschberg monitors newsletters and websites (his favourite is CEO.ca). He also talks on the phone several times a day with people in the industry. And he attends industry conventions, such as the one run by the Prospectors & Developers Association of Canada.

Best move

It was getting in early on discoveries made by junior resource companies, such as when Diamond Fields Resources Inc. found the Voisey Bay nickel deposit.

Worst move

“Not getting out at the height of bull resource markets.”

Advice

“Play with money you can afford to lose.”

Want to be in Me and My Money? Contact Larry MacDonald at mccolumn@yahoo.com or his website.