By Louis James, Chief Metals & Mining Investment Strategist
NEW YORK (TheStreet) -- I've always wondered why we tend to glorify pirates and treasure hunters: the Indiana Joneses, the Jack Sparrows, the Long John Silvers. I think it's because most people, while it may not be reflected in their daily lives, are adventurers at heart.
Don't we all dream of digging a hole because we just know there's something there, and hearing that telltale clunk of our spade striking the lid of a treasure chest filled with gold doubloons?
Fact is, the precious metals mining sector -- although by many derided, as Doug Casey says, as a "choo-choo industry" -- is one of the last bastions where wannabe daredevils can still dream big.Most of the companies my subscribers and I invest in are explorers looking for gold, silver, and other metals. Of course today there's a lot of science involved in finding those modern treasure troves. That includes the latest technologies, like XRF guns, to assay rock samples right in the field. And some geologists just have that spot-on intuition about how mineralization twists, turns, plunges, thickens, pinches out, breaks off and reappears. However, we can't -- and shouldn't -- underestimate the role of luck in every discovery. Mother Nature likes to hide her treasures well, plant false clues and bury them deep. That's what makes the treasure hunt so exciting, difficult, and ultimately (when successful) profitable. Here's a secret that most mainstream investors don't know: There are literally thousands of mineral exploration companies, and MOST of them will never discover anything. The money these companies raise in the market will be poured into the ground, and chances are that it won't ever do any good. This is what makes identifying companies likely to make a significant discovery so difficult -- and therefore so enormously profitable when you do.
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