The Amazing True Story of 1,880% Returns in Seven Years

Greetings from Vancouver, British Columbia...

I'm typing this from a desk overlooking Coal Harbor... one of the most beautiful sights in Canada.

I'm "camped out" here at the resource industry's ground zero for a month. If you want to know what's happening in mining, you've got to know what's happening in Vancouver. I plan on meeting with 40 or so companies before returning home to Florida in August.

But first, I took part in one of the largest conferences in financial publishing, the Agora Financial Investment Symposium. Attendance at the conference was about 30% larger than last year. When I spoke last week, I faced 900 attendees... all wanting to hear about opportunities in resources and mining.

The highlight for me was listening to one of the world's best investors, Rick Rule, speak about commodities. If you don't know Rick, you should. He knows more about natural resource investing than anyone in the world. And he's behind one of the greatest investing feats of the past decade.
 
The MC introduced Rick by reading a letter. Rick recently sent the letter out to the members of an investment partnership he formed seven years ago. He pooled a pile of money together to invest in small mining companies at the beginning of the commodity boom.

The gist of the letter was, a $20,000 investment over seven years with Rick has returned $69,000 in disbursements (basically dividends). That's a phenomenal yield... But get this: Due to capital appreciation, that original $20,000 has a current value of $327,226. That's a 1,880% return in just seven years. 

So what did Rick have to say?

First, he's sure the commodity bull market is alive and well. He cites the length of the last bear market – 20 years. The resource industry simply didn't invest enough money to bring copper, lead, oil, and precious metals to the market. We're mining discoveries from the 1960s and 1970s. It takes years and years get a giant mine up and running.

Second, he's bullish on small mining stocks today. They've taken a beating this year, which is producing investment bargains.

Rick displayed stock charts of all the mining companies attending the conference. The charts looked terrible. The credit crisis has sent investors running from riskier assets like mining stocks. Financing new projects is getting more difficult as bankers pull in their horns. He says small miners are fairly priced right now... but they'll be downright cheap by December. 

So... take it from Rick. It's his job to find the opportunities in small mining stocks. And he says later this year, there will be an amazing one. Stay tuned for updates.December is his target because of a wrinkle in Canadian tax law. In Canada, you can write off a loss retroactively back three years. Investors can admit their mistakes and get a check from the government. This tax "overhang" should lead to a lot of investors selling their shares to take the loss. Rick is planning on loading up on the bargains it will create.

Good investing,

Matt Badiali