Old warriors

The difference between going into battle to wage a war, and going into battle to win a war

I was taught there are only three universal rules in prize fighting:

1. Take no unnecessary risks.

2. Do the job with a minimal amount of violence.

3. But if the other guy wants to play rough, make sure you play rougher.

Number three is tricky. Prize fighting isn’t like investing. The human body has a shelf life. When you can no longer physically do what’s necessary to win, no matter how diligently you prepare, it’s time to walk away before you get hurt.

You’ll get this on Sunday morning Toronto time, but as I’m typing this out a few old warriors are finding out what happens when you hang around too long.

Enforcer Ryan Reeves, almost 37-years-old and in the first weeks of a three-year contract, was a healthy scratch as his Toronto Maple Leafs speed-bagged the Vancouver Canucks 5-2. While nobody can blame him for following Logan Roy’s advice - the fact remains Reeves can’t skate, can’t score, can’t defend and, most importantly for someone in his line of work, can’t fight at an NHL-calibre anymore. Since the guy who replaced him got two points and his line mates each scored a goal, he’s not likely to play again anytime soon.

Reeves is better off than James Toney. Toney is a multi-time former world champion boxer, but he’s now 55-years old and suffering from brain damage. Toney fought Donovan ‘Razor’ Ruddock in an exhibition match Saturday night. Ruddock, 59, is best known for standing in the pocket and taking two beatings from Mike Tyson. They fought to a draw apparently on a $30 pay per view.

While all three of our old warriors shouldn’t be fighting anymore, only Reeves seems to have the option of walking away with his faculties intact and money in his bank account. Toney and Ruddock were paid millions of dollars over their careers and didn’t save any of it. Reeves may end up riding a bus for the next few years, but he’ll cash every paycheque.

Bringing this back to investing, I think our prize fighting rules can be modified as follows for the nuclear winter of a junior commodity market we’re in now:

1. Take no unnecessary risks. (Let’s keep this one)

2. Do the job with a minimal amount of violence activity and leverage.

3. But if the other guy wants to play rough, make sure you play rougher. Understand what you own and why you own it. But if you’re going to sell, sell first.

That seems right. No points for waging a war. Just for winning one.

Consolidating and High Grading

My base case for 2023 was markets would give me the opportunity to accumulate assets on the cheap that I expect to be worth significantly more in 2024 and beyond. With Twitter/X circling the drain I’m finding more value in doing podcasts and meeting people in person to talk stocks. This podcast with Andy Millette will probably be more helpful to a retail investor, but it encapsulates my current thinking.

• This is not the time to be invested in any company that needs to tap the equity or debt markets.

• Consolidate into my best ideas.

• My bar is really high for adding a junior resource stock to the portfolio. There’s so much opportunity available with less brain damage.

Portfolio Updates

I won’t try to list everything I’ve done since my last newsletter portfolio update. The major moves were dumping Athabasca Minerals and Altiplano Metals at a loss, luckily before they went looking for cash and fell through the floor. I also blew out all the marginal junk in the portfolio like Pieridae, Prospera, Algoma, Cipher and Enwave at a small collective profit before they could do any damage. I was early, but I took profits on my big oil and gas winners Petrobras, Permian Basin Trust and MEG Energy.

On the whole I’m happy with my strategy of panicking first. Aside from saving me a lot of money, it cut down the number of positions and financed a big part of the US infrastructure trade that’s been a winner for me …

• AtkinsRealis - the former SNC-Lavalin - has climbed from $32.50 to $43.75 since March with a lot more room to run.

• Centrus Energy is on its way to $100 in a uranium bull market

• Spark Power Group generated a return of more than 100% in less than six months after accepting a buyout at 82.5 cents.

• Midwestern Energy Emissions is on its way to multi-bagger status after settling a patent infringement lawsuit on Friday. Terms haven’t been released yet.

I have been adding to Vulcan Minerals below 20 cents and Minera Alamos anytime it drops below 28.5 cents. On the tin front: I took my lumps and swapped out Metals X for Alphamin.

A little boxing to close

Remember James ‘Lights Out’ Toney for the all-time great technician that he was. Not the broken and broke man who put his life on the line Saturday night.

2003: Toney vs. Jirov

Toney beats the odds to dethrone the previously unbeaten IBF cruiserweight titleholder Vassiliy Jirov.

1992: Toney vs McCallum 2

I can’t believe I only watched this fight for the first time a few days ago. A rematch of their draw nine months earlier, Mike McCallum and Toney go the distance a second time. This is right up there with the Jirov fight and the knockout of Evander Holyfield as one of Toney’s greatest performances.