Mining data on precious metals

Bob Perry, 58

Occupation: Retired Canada Post financial analyst

Portfolio: Silver Wheaton Corp., Minefinders Corp., Gold Wheaton Gold Corp., Franco-Nevada Corp., European Goldfields Ltd., Nevsun Resources Ltd., Silvercorp Metals Inc., Northgate Minerals Corp., Active Control Technology Inc.

His Strategy

When Bob Perry began investing in individual stocks on his own five years ago, he focused on oil and gas, partly because he is a believer in Peak Oil theory and the economic consequences. But Mr. Perry, who lives in Quispamsis, N.B., some 20 kilometres outside of Saint John, soon found himself seeing far more potential in the gold and silver sector.

How His Approach Has Changed

Mr. Perry used to focus on the more speculative small-capitalization stocks, and was rewarded with some good profits. However, the sting of last year's market collapse made him "change his ways" and shifted him more toward larger-cap stocks.

His Favourite Stock

Silver Wheaton Corp., has been a real winner for him, and was another big reason for Mr. Perry focusing on metals. What appealed to him was the company's business model. "What they do is put X number of dollars into a mine and buy a percentage of the silver that comes out of the venture at a fixed price." This leaves the company without exposure to rising fuel, labour and other production costs, he says. It also means the stock is highly leveraged to the price of silver. He first purchased the stock in 2006 for between $10 and $12. Silver Wheaton last closed at $13.08. Why he Likes Precious Metals

"The U.S. is printing money at an unprecedented rate. That's bound to create inflation, and gold and silver do well during inflationary times."

How He Picks Stocks

A business analyst and a Certified Management Accountant, Mr. Perry digs into the numbers. He also watches BNN (Business News Network) regularly, and will often turn to the Internet for research. He uses the regulatory site, sedar.com, to look up company filings such as prefeasibility studies. He also thinks it's more than worthwhile subscribing to two leading gold stock newsletters, the Hard Rock Analyst, and Gold Stock Analyst.

Best Move

In late August, Mr. Perry bought warrants on Franco-Nevada Corp., and within two weeks was up 45 per cent. He likes warrants because of the leverage, but warns that can amplify losses as well.

Worst Move

One big disappointment was Gold Wheaton Gold Corp., which applies the Silver Wheaton strategy to gold producers. He bought in when it went public in the summer of 2008 at the 50-cent issue price, and the shares last closed at 24.5 cents. "It was just bad timing. They bought at the wrong time, and then tried to raise financing when everything went flat."

Advice

"Do your homework and don't be lazy," Mr. Perry says. "I think a lot of people may get caught up in hype, but if they look at the financial statements to see if the profitability is there, that might tell a different story."

Want to share your strategies?

E-mail tony.martin@sympatico.ca