I didn’t discover the pre-production sweet spot (PPSS). It’s been called that for decades. But it was understood that while predictable, and hence sweet, the gains tend to be modest. As far as I know, I was the first to quantify those gains.
Averaging around 100%, PPSS return on investment is far better than anyone I knew expected.
I published the results of my initial PPSS work back in January of 2017. My then boss Doug Casey was very surprised by the numbers I found. But he couldn’t argue with the data. Facts are facts. So we called it the Golden Runway and speculated accordingly.
It was legendary resource investor Rick Rule who recently told me that my PPSS work may be the most important thing I’ve done in my investing career. After failing to find any flaw in my thesis, he too adjusted his course to speculate accordingly.
What makes the PPSS so great?
It’s not about moonshots. This isn’t tossing the dice on a huge jackpot with long odds against us. It’s about predictability.
About 95% of the companies that start building a mine, entering the PPSS, emerge successful.
Predictability is the holy grail for investors. It’s the closest we can get to knowing the outcome before we invest.
That’s what makes the PPSS so special.
Putting this theory into practice, I’ve bought into four PPSS plays since launching The Independent Speculator. As you can see on my public track record, two of these trades have closed:
- Lundin Gold (LUG.TO). I sold for a 49.7% gain when the company exited the PPSS. That’s despite massive social upheaval that disrupted transportation in Ecuador, where the mine was built, and forced the government to flee the capitol.
- Continental Gold (CNL.TO). I sold for a 53.4% gain when the company was taken over by a large producer before it could finish building its new mine in Colombia. And that was despite several murders of company personnel, which caused share prices to tank.
Yes, those are only 50% gains, but they were despite market downturns and other setbacks—and a win’s a win.
The jury is still out on my remaining PPSS plays. I’m very bullish, however—and looking for more. Applying the PPSS strategy is my top investment priority.
Improving my ability to predict high-return PPSS outcomes is my top research priority. I’ve been working on this for three years and have made some progress.
I’ve also incorporated the latest PPSS cases into my dataset and updated my findings.
I’m making this research available to you in a new Special Report which you can download free of charge.
You’re welcome to subscribe to The Independent Speculator in order to see which PPSS stocks I’m putting my own money into.
But the strategy itself, and my latest refinements on how to best employ it, are yours for the asking.
It’s in my self-interest to help you make a lot of money, so I truly hope this free research does exactly that.
Sincerely,
