Book Review: Basic Investing in Resource Stocks-The Idiot's Guide, by Robert Moriarty

By Jayant Bhandari / March 09, 2019 / Article Link

In the recent years investors have lost a lot of money in the resource sector. This shouldn’t have been the case had investors paid attention to the work of Bob Moriarty. Exactly when the sector was losing money, Mr. Moriarty was investing in resource stocks—of the likes of Novo Resources and Irving Resources—that made him 10 to 20 times his investment. In some cases, more.


As Warren Buffet says, “People make investing… more difficult than it should be.”


In his book, “Basic Investing in Resource Stocks—the Idiot’s Guide,” Mr. Moriarty provides a common-sense approach to investing in the resource sector.


“You will make mistakes when investing, but make sure you make new ones.”


Those who have focused their investment life in the resource sector, as I have, tend to think that it is full of idiots and liars, or those living a lifestyle using shareholder money. Mr. Moriarty thinks that other sectors are worse.


Referring to the cryptocurrency mania—which he calls “Bitcon”—about which he started writing on 321gold when it was peaking, he says that total value of Bitcon has fallen from $800 billion to $136 billion. I thought that there was a typo. Had he written “billions” instead of “millions?” But his wasn’t an error. A massive amount of money has changed hands, from gullible people to conmen or street-smart traders.


But the biggest con of all is the fiat currency system that surreptitiously steals people’s money and puts the future generation into bondage. This cannot continue. A “great reset” awaits, for there are far too many systemic risks today.


A product of the fiat currency is the derivative business, a boondoggle that poses significant systemic risks.


All debts must be paid, and the world is awash with it. There are far too many black swans for one not to come into the scene. “The Gilets Jaunes movement of France is merely the opening scene,” says Mr Moriarty. That is where protecting oneself from what is another person’s liability is important, making gold (or silver or platinum or palladium or rhodium) one of the ways to preserve one’s wealth.


In the investment space, a lot of wealth is getting destroyed, misallocated or moving into the hands of conmen, private or public, leaving gullible investors high and dry. What one must learn early on is the concept of probabilities before one starts throwing one’s dice.


One, however, cannot depend on the advice of “experts,” which reminds me of “Nobody Knows Anything,” another book by Mr. Moriarty.


Mr. Moriarty advises people to have the courage—once they have studied their homework properly—to have contrarian thinking, even if it goes completely against the emotions of the market.


There is legitimate information in the market and there is noise. Internet should have made it easier for information to flow freely. Alas, it is noise that has grown bigger than the real signal.


“Change your mind when information changes” makes common-sense, except that most people are resistant to changing their views. The end result is that 90% of investors lose money. While Mr. Moriarty advises not to be a part of that 90%, he is happy they exist, to help him make the extra money.


Read the above words of wisdom in his short and sweet book, including the description of the resource industry, and some saucy stories of his investments.


Jayant Bhandari