Today I’m going to share my stock portfolio with my readers.  Why am I doing this?  Several reasons:

1. Sharing information is powerful.  Many people have shared their ideas with me, and sharing information is the whole point of this blog.
2. Lots of people talk about their investments, but you rarely hear the whole story.  It’s easy to always talk about your winners and ignore your losers.  Sharing this information will put me on the record and hold me accountable for my investment decisions. Everyone can judge for themselves in six months, or a year, or five years, how my investments have performed.
3. They say that teaching is the best way to learn, and by sharing these ideas it will help me to learn more about them.

This is not a conventional stock portfolio and is definitely not appropriate for most people. This portfolio was designed for my specific circumstances and is very unconventional.  My stock portfolio is only a reasonably small portion of my overall assets and I’m in a position where I can afford to take large drawdowns on the portfolio without it greatly affecting my overall standard of living. This portfolio was designed to achieve numerous objectives specific to my personal circumstances:

• Protect against what I think is inevitable inflation.
• Provide me with the opportunity to take significant risks in return for potentially significant rewards. I’m not looking to grow these funds by 8-10% per year.  Anyone can do that by buying index funds and holding them for extended periods.  I’m looking to hit doubles, triples, and home runs.  In doing so, I’ll also strike out quite a bit.  That’s okay.  I know that’s the game I’m playing.
• I don’t invest in stocks that I don’t believe have the potential to at least double in five years.  Ideally, the stocks I invest in are small to mid-cap stocks that have the potential to turn into 5-baggers or even 10-baggers within 5-7 years. A person only needs a few 10-baggers in a lifetime to really move the needle.
• I really enjoy following markets and economics, so this is something that I enjoy doing, rather than a task to be done.  If I didn’t enjoy the process, I’d simply invest in index funds and spend my time doing something else.  Investing in different companies, in different industries, allows me to learn a lot during the process of doing due diligence, and I enjoy that.

A few additional points. I don’t really have specific trading/investing rules that I strictly follow.  I find that, in general, they don’t allow the creativity and flexibility needed to really be successful. One rule that I do generally follow is that I’ll only hold ten stocks at one time.  This instills some discipline in my investing outlook and avoids what Peter Lynch referred to as “di-worseification”.

If you’re managing a baseball team, you want your best hitters in the lineup.  Why would you let your 11^th, 12^th and 13^th best hitters take at bats away from your top ten hitters.  Another way to think about it is by thinking about the Austrian concept of diminishing marginal utility. Each additional marginal unit added provides less value than the previous units.

You’ll notice that all of my current holdings are resource companies. This would be considered insane by any financial advisor. But I really don’t care. It’s the sector that I think will outperform by a wide margin over the next decade and I’m comfortable with that concentration risk. I’m not opposed to stocks outside the resource sector and when I see value outside this sector I’ll invest there. I’ve invested in many different sectors over my lifetime, and I plan in investing in lots of other sectors going forward. But right now, I see the resource sector as the most hated, undervalued sector of the market and some of the best company values are here. So that’s what I own.

So…here are my current ten holdings along with their current price per share and market capitalization.

Alphamin Resources Ticker -AFMJF Current Price-$.63 Market Cap- $814 Million

Baytex Energy Ticker – BTE Current Price-$4.43 Market Cap- $3.82 Billion

Filo Mining Ticker – FLMMF Current Price-$14.09 Market Cap- $1.84 Billion

Journey Energy Ticker – JRNGF Current Price-$3.67 Market Cap- $224 Million

Meg Energy Ticker – MEGEF Current Price-$19.64 Market Cap- $5.80 Billion

Minera Alamos Ticker – MAIFF Current Price-$.21 Market Cap – $97 Million

Sprott Uranium Trust Ticker – SRUUF Current Price-$17.61

Surge Energy Ticker – ZPTAF Current Price-$6.88 Market Cap- $690 Million

VanEck Junior Gold Miners ETF Ticker – GDXJ Current Price-$35.48

Wesdome Gold Mines Ticker – WDOFF Current Price-$5.71 Market Cap-$850 Million

I plan to write one post per week for the next ten weeks to explain why I own each of these companies. And I do think about it as owning a piece of each of these companies rather than owning shares in their stocks. If you think about owning the stock shares, you tend to focus on the stock price. If you think in terms of being a partial owner of the company, you tend to focus on how well the company is doing rather than the stock price. In the long run these two things are the same. But in the short term they will frequently diverge. It’s important to know what you own and why you own it.

I’ll explain more about my investing philosophy as I write about each of these companies in the coming weeks.