Olive Resource Capital Explain Their Biggest Wins and Lessons from 2024-2025

Key Concepts

• Post-Investment Review is Crucial: Systematic analysis of past investment decisions – successes, failures, and rationale – is fundamental to improving the investment process.
• Long-Term Value & Conviction: Prioritizing fundamental value and maintaining conviction in long-term investments, even during volatility, is key. Avoiding short-term trading is emphasized.
• Information Advantage Drives Outperformance: Identifying opportunities where the market underappreciates key information is a core strategy.
• Sizing & Position Management Needs Improvement: Consistently under-sizing winning positions has resulted in missed gains.
• Bull Market vs. Skill: Recognizing the influence of a bull market and the need for objective self-assessment to differentiate between luck and skill.
• Copper & Platinum/Palladium Outlook: A positive outlook for copper, driven by supply disruptions and increasing demand, and anticipation of a similar “big move” in platinum and palladium.

Market Context & Retrospective Period

This episode of The Compass is a retrospective analysis of investment decisions made between July 2024 and late September 2024, conducted during an exceptionally active market period with strong performance in silver, gold, and stocks despite the typical year-end slowdown. The hosts, Sam and another host, utilize clips from previous episodes to facilitate their review.

Successful Investments & Key Returns

Several investments yielded significant returns during the review period. Omai Gold Mines (OMY) experienced a 10x increase from $0.125. K92 Mining and Terrace Resources both delivered returns of 220-260% compared to the GDX (VanEck Gold Miners ETF) return of 130%. AngloGold Ashanti (Anglo) saw a 300% return from November 2024 to the time of recording, driven by the gold price rally and the potential of their Nevada Rain project. Arizona Sonorin returned 300% from the initial investment, benefiting from anticipated permitting changes under a potential second Trump presidency. Selfish Royalty (FISH) achieved a 300% return following a discovery hole announcement at their Spring Valley copper royalty asset in Nevada. Fresnillo delivered approximately a 500% return.

Missed Opportunities & Lessons Learned

The review also highlighted missed opportunities. Spartan Discovery was identified as a potential investment at the Beaver Creek conference, but hesitation resulted in a significant missed gain. Silver investments (MAG Silver, Fresnillo) were undercapitalized, limiting potential profits despite identifying Fresnillo as a superior asset. The hosts acknowledged the regret of missed opportunities, referencing Warren Buffett’s quote: “Everybody thinks I’m so smart because I’ve done all these great deals, but if you only knew the trillions of dollars that I’ve cost this company with the things that I have not done that I should have done.”

Copper & Metals Strategy

The firm began increasing its copper exposure in late May, anticipating a market re-rating that materialized with the Grassburg event in September, leading to investments in Ivanhoe Mines and Arrow. Sterling Metals experienced a 300% return from September 30th to the present, driven by positive results released at that time. A bullish outlook for copper remains, based on the principle of buying commodities when they are out of favor, exemplified by the IBO event at Kakulo. A similar “big move” is anticipated in platinum and palladium in the fall, a prediction initially made in a previous episode.

Investment Process & Methodology

The core methodology employed is a systematic retrospective analysis of past investment decisions, focusing on identifying successes, failures, and the underlying rationale. This involves fundamental analysis, thematic investing (e.g., copper demand, favorable permitting environments), and a long-term perspective. The firm’s structure, lacking redemption mechanisms (perpetual capital), provides an advantage by allowing them to weather volatility and maintain positions.

Self-Assessment & Investor Profile

The hosts emphasized the importance of rigorous self-assessment, particularly in a bull market. They cautioned against confusing market momentum with investment skill, stating, “It’s very easy when you get into a market like this to confuse a bull market for brains.” Regularly reviewing portfolio holdings – understanding the original rationale, evaluating current relevance, identifying mistakes, and planning for future iterations – is vital for understanding one’s investor profile, risk tolerance, and appropriate investment behavior. Analyzing why a potential investment wasn’t made is considered as important as analyzing successful calls. Investing in junior mining is acknowledged as “hard,” reinforcing the need to celebrate successes.

Future Outlook & Episode Plans

The 2025 episode series is concluding, with gratitude expressed to viewers and Olive Capital shareholders. The first episode of 2026 will focus on a medium-term outlook. A potential discussion regarding selling gold holdings is anticipated in January, considering seasonal trends in Q1.

Conclusion

This retrospective review underscores the importance of a disciplined investment process centered on fundamental analysis, long-term conviction, and continuous self-assessment. While benefiting from a strong market environment, the hosts emphasize the need to differentiate between luck and skill, and to learn from both successes and failures. The firm’s positive outlook on copper and anticipation of a similar move in platinum/palladium, coupled with a commitment to rigorous post-investment review, positions them for continued success.