What’s really healthy about this market is that the big money that’s coming into the sector this time is very different than the big money that took the sector up last time. The big money that took the sector up last time was dumb money. It came in the generalist mutual funds, it was momentum-oriented, it was retail, and it was generalist, not mining or resource-specific. The money we are seeing in the sector now is coming from sovereign wealth funds, private equity funds, strategic partners. And it has a focus that’s strategic to get control of product flows like gold and silver but also copper, lead, zinc, oil, and gas for commodity-short cultures. Places like the Middle East, North Africa, India, and China.
What’s important is the matchup between the expectation of the investors and the time frames they have involved — five, six, or seven years — and the needs of the industry they are circling. So ironically the soft market serves the interest of those buyers.
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