- Bill Prast
Is it all worth it?
Updated: Jan 17
This article was written by Bill Prast. All views and opinions expressed are strictly his own.
Once upon a time, long ago and in a land far away, I was a graduate student in a major American university.
As J P Hartley aptly said in his opening words of The Go-Between, “The past is a foreign country, they do things differently there.” And so it was more than half a century ago. Distance learning on desktop screens and virtual webinars were not how you were taught, or even more importantly, how you learned to teach yourself.
You listened to the faculty, learned from their comments and whether or not you agreed with everything you were told was less important than remembering what they said and why they said it.
My field of study was and still is the economics of the extractive industries, and one of the individuals who was instrumental in those academic years was Dr James F McDivitt, who served as a member of the committee supervising my doctoral dissertation.
Professor McDivitt was a Canadian mineral economist, particularly knowledgeable about resource policy options but gifted with an unusually eclectic mind. Able to present complex information in clear and simple language, he was a respected author and his 1965 book Minerals and Men remains a classic introduction for non-specialists to the world of non-fuel minerals.
Jim’s thoughts were provocative. On one occasion, he said in passing that the entirety of the global mining and metallurgical business, considered over historic time, has clearly been unprofitable. More has been squandered in searching for, extracting, processing, and shipping those things we sever from the earth’s crust than has ever been returned in the form of tangible profits. It is not a zero sum game, it is a casino and the punters have lost more than they’ve won. Nature is the croupier.
He noted the Japanese approach to securing their mineral raw materials did not rely on speculative exploration programmes led by Japanese companies. The approach preferred by Tokyo was to provide an assured market to the bonanza-seeking explorers from the English-speaking part of the world. If pray tell a North American or Australian company were to discover something of value, the Japanese would be there to finance its development, and sign a supply agreement under reasonable terms. But not to fund any early-stage field work. This approach worked for Japan, and still does.
Nevertheless, being a Canadian he was well aware of the numerous penny stocks that proliferated on the regional exchanges there, and had a track record of success that was the envy of his peers and those of us graduate students who followed the stock market.
His investment strategy was simple. Buy shares in very small Canadian juniors during the dead of winter when the country is frozen solid and there is no news. It doesn’t matter too much which companies you choose.
Wait for the spring thaw when the first rivulets of enthusiastic press releases begin to flow, describing what is hoped to be a successful year of field work. Sell on rumours. Bank the money. When the weather window closes in the autumn and the disappointing field results have duly been reported, wait for the share prices to decline and repeat the process.
McDivitt was the best proof reader I have ever met. I learned the hard way to emulate him. Indelible in my memory is the happy morning I brought my freshly-typed and absolutely completed doctoral dissertation into his office for his signature and final approval. I would graduate next month. He was well aware of what I had been doing and this was a mere formality. Right? Wrong.
He glanced at the massive document, didn’t turn a page and said, “I reject this. It is unacceptable. Take it away.” I was crushed. Terrified, actually. “But why?” I asked.
“Look at the title page.” I did.
The submission date in November had a transposition. Novmeber. I sheepishly beat a hasty retreat, found my typist, got her to churn out a new cover page while I waited, and returned to see him immediately. McDivitt was happy, I was relieved and he had made a good point. Typos do not speak well for your work.