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Read on to see an article posted on Clem's Diary of a Contrarian Investor blog on 19 August 2015:

Don’t Trust the Miners

There IS ‘value’ in the market but I won’t buy it.

It’s the miners.

However, I’m sure you can’t trust a word they say.

China companies and resource stocks all go in the same bag for me: the rubbish bag.

Over the years their explanations, excuses and the outcome as a group of companies has been so appalling it is easier to chuck the whole lot in the dustbin than go on a hunt for a few unicorns amongst the many wounded snarling predators.

This is galling because I like the miners right now; they press every contrarian button on my contrarian dashboard.

…But I must resist.

I expect many of the big companies to follow the forlorn path of Avocet and Petropavlovsk into meltdown and opaque restructure, where assets vanish into a mist of buyers whose name you have never heard of and likely will never hear of again.

They will be pillaged.

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While billions have and will go astray in the mining and resource world, no one will be investigated, let alone brought to book. Layers of offshore secrecy will hide the robbers from sight. It’s nauseating and means that the whole sector must be treated like Chinese AIM stocks, as a kind of pariah.

Perhaps in a few years, the unicorns will stand alone, the rest turned to ashes and then will be the time to buy, because in the end everyone will understand that the many fallen companies were little more than shams and this will besmirch the real companies and they will be very undervalued as a consequence.

This could take years. It is better to spend your money on wild living than hand it to thieves, so if you can avoid both, one day there will be fat pickings. But not for a while I fear.

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Read more sample articles:

21 Sep – RSA/Zurich Merger Collapses

28 Sep – Anatomy of a Contrarian Value Investment

6 Oct – Aquarius Platinum Takeover

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