Welcome back for the first edition of Off The Handle for June, 2021. In this episode, I spoke with @Excelsior, who has been a wealth of knowledge for user of CEO.CA since 2016. @Excelsior recently announced on the #Index that he joined on to the KE Report with Corey Fleck and posted good intro interview they did together that you might want to check out also. https://ceo.ca/@excelsior?749607f6ecf9
Thanks for listening everyone, I appreciate it more than you know.
Here's the breakdown of the highlights:
- @Excelsior's background and how he got interested in the resource space - [00:01:28]
- How @Excelsior invests in the resource markets (diversification) - [00:03:17]
- Building his own "ETF"s and his methodology - [00:04:26]
- Anomolies that pique @Excelsior's interest as an investor - [00:07:53]
- Where @Excelsior finds value on CEO.CA - [00:09:46]
- Going deeper into his involvement with the KE Report - [00:17:31]
Vaughan: Good morning, everyone, and welcome back to another episode of Off the Handle. Today, I have with me user @Excelsior, whose real name is Shad Marquitz. Excelsior joined the KE Report earlier this year, another great place for you guys to go and get information, insights and listen to companies and CEOs talking to Corey Flecking and now, @Excelsior also.
Vaughan: Hey man, how you doing? Nice to see you in person.
Excelsior: It's nice to see you in person as well. I'm doing good. I just wrapped up a big interview and trying to do a webinar with the company and it was trying to keep all the balls in the air. We've had a busy week at the KE Report.
Vaughan: Good for you. It's cool that you're a part of that over there. I mean, it's good to see you guys growing.
Excelsior: [00:01:02] want to grow the site. We want to grow the audience. We want to grow the number of companies we cover. We want to get more generalist on. We don't want to be a pump site. We want to be more like a news site where we're covering the news as people have it and say, OK, unpack your news. So that's what our goal is: to just cover more companies that we think are solid, good, well-run companies.
Vaughan: For our listeners. Tell us a little bit about yourself prior to finding this space. What's your background?
Excelsior: [00:01:28] My background was in sales and marketing with insurance and with financial products for about two decades. I ran my own marketing companies, I sold insurance, I did banking products, annuities and all that.Then in the great 2008 crisis, I was having my own mini crisis in life in 2007, 2008, and I sold a big coin collection. When I liquidated it all, I went over to this booth that had all this activity and it was a gold and silver bullion desk and it was just popping. Everybody was very active and I said "what's going on here? What's the big deal?". Somebody gave me a David Morgan DVD and I started listening. I was like "Oh, man, I'm an idiot. I just sold all the silver" because I was just trying to get a bail myself out. Immediately, when I got the money back, started buying silver again so from 2008-2010, I stacked silver.
In 2010, I found the mining space because I started realizing by watching sites like Kitco that "Wow. These mining stocks really have a lot of leverage to the metals. I like to speculate. I've always been a little bit of a gambler too. I like I like playing craps roulette when I go to casinos and I was already investing in the markets, but I like that speculation angle. I like it when there's a metric around it. I don't just like random gambling. I like it when there's some thought behind it. What's the percentage that this is going to work? What's a good risk reward set up?
That led me to the mining stocks and for the last decade I've really been focused on the resource sector, energy and commodities.
Vaughan: I've been following you for a couple of years on CEO.CA. You're one of these guys who seems to be covering a large number of companies. I mean, you were providing updates, whether it be on a weekly or monthly basis, that must take a ridiculous amount of time.
Excelsior: [00:03:17] It does. I probably should get out more, ha. I try to get out and get some fresh air, but I'm a behind the screen a lot doing research and I probably spend at least a few hours a day on just research and do diligence on companies. I try to watch everybody else's podcast and shows and YouTube videos and corporate presentations.
I personally hold a very large basket of companies in my portfolio, probably two, three maybe four times as many as most people. Whether it's copper or zinc or uranium or lithium or... I do drive myself a bit crazy trying to cover it all. But I just I have a passion for the space and I like looking for overturned stones, stuff that maybe other people have not taken into account, whether there's a valuation mismatch or where there's an inefficient market. I love looking for stories that maybe get glossed over or unloved. Sometimes they used to be loved and they fell out of love and now they look interesting again because their valuations come back to reality. So I love that. But it takes a lot of time.
Vaughan: Oh, no doubt. It's interesting because most people who are out there in this space they might not be quite as diversified as you were. How many companies do you actually own?
Excelsior: [00:04:26] I have almost one hundred companies in my portfolio currently. I usually average 60 to 80, but I've had a really good run. My portfolio is up close to four hundred percent since the March pandemic lows. I've taken the profits and just rotated each of the profitable trades into yet more positions. So I've gotten more of a diversified approach and for some people that's just too many to follow. I look at them as managing ETFs. So I have a gold ETF, I have a silver ETF, I have a copper ETF, I have a uranium ETF, I have a base metals with zinc and nickel and PGMs and everything.
[00:05:00] That's how I approach it. I give different weightings based on what stage these companies are at. Are they a producer? Are they a developer? Are they explorers or are they royalty companies? I weight the producers and royalty companies heavier because I want it to be somewhat stable. Then I take my risk with the development and exploration plays and those are smaller positions. So a lot of my positions are 4%, 3%, 2%, 1% positions and in the explorers they may be .5%. I look at them more like lottery tickets, but I want to have a fishing pole in the pond, so to speak. So it's a lot to keep up with for sure.
Vaughan: Depending on the platform you're using, I hope you're not trading very often because thats a lot of names. You must not be paying your $10 dollars a trade type thing.
Excelsior: I am, some trades are free now because that's how platforms work. If they're a dual listed company or a larger company there's no cost to trading. I'll trade those more often. I'm taking big enough positions that if they go up 20 percent, 30 percent, 40 percent, I'm thrilled to scalp those games. And I typically keep a core position on a company in place and maybe only trade with a third of it or a fourth of it. So I'm not trading the whole position and now I'm trading around the core position.
Vaughan: That makes sense. I was explaining to a friend of mine who told me he went out and bought a meme stock. It was one of the first stocks he has ever bought. He told me he bought $250 dollars worth. One thing I explained to him, which he admitted he hadn't thought about, is the fact that if you're paying $10 dollars to buy in and $10 dollars to sell out, that's $20 dollars right away that you're paying. if you're investing $200-$250 it's 10% percent loss that you have to make back up. Right? If you have a big enough position size that goes away fairly quickly.
Excelsior: That's the point is if your position size is large enough, who cares about $10 dollars or $20 dollars because you're going to make 20%, 30% on the trade. It's got to be big enough to be worth the candle. People worry so much about their tax bracket, whether it's a short term or long term appreciation game or what they're trading. I'm looking at how can I make the most profits possible and I'm happy to pay taxes on a larger amount. So most of mine are short term taxes, which are higher than the long term holds. But I don't care. I'd rather outperform the indexes and outperform the market and make more and pay more taxes. I have a friend that's a multi multimillionaire through real estate investing and he says "man Shad I want to pay a million dollars, millions of dollars in taxes per year because it means I had damn good business year".
Vaughan: I've heard that many times across different industries and different walks of life. For things that you're looking for in terms of the companies that you're trying to uncover, some of those hidden gems. Can you share with us any a types of anomalies that pique your interest?
Excelsior: [00:07:53] Sure. There's kind of a couple of different buckets. One bucket would be the turnaround story. A company that clearly has assets and they've had issues with those assets. Maybe it's a production company that's gone into production, they've struggled and it's not gone well. They've gotten punished by the marketplace to a level that no longer makes sense. It's absurd and then I'm willing to take a gamble that they could turn that mine around.
Sometimes it's a development company that's been on the market for the last cycle, this cycle and people consider it a dog and leave it to die. But they have undervalued assets that underpin their value and they have a big resource. If a company has a million, two million, three million ounces of gold and there's little explorers flying past them in valuation and they're not getting value correctly, I'll look and find out why. What's the issue here and how could the stock get rerated higher?
I also look for super quality companies that get hammered during market events. Last March in 2020, when everything took a dive, I bought the bigger royalty companies and I bought some of the bigger producers in the mid tier producers and they bounced back nicely because I realized it was a low risk proposition. It's not going to stay down low like that forever, but we'll see little events like that all the time and its stock specific. If I see a fishing line sell off, I'll use it and say, why is this happening? What's the news? What's the chatter? Sometimes there's no good reason for it. It's a fund liquidating or it's just a large whale exiting a position. I'll see that as a gift and think "man, I had missed that move, but now that it's come down so much, I want to have a position on that company. That's probably why I have so many positions going (haha), because that happens quite often in our industry and I'm always looking for when there's a market dislocation that doesn't make sense that we can capitalize on.
Vaughan: Well, if you're looking for market dislocation, you're in the right place. You mentioned CEO.CA, so let's talk about the site for a second. Do you follow anybody? Are there any tools or functions you find particularly valuable on the site?
Excelsior: [00:09:46] I'm on CEO.CA every day. It's part of my bread and butter of how I research the markets. I think it has the fastest news service and the wire scraping of all the different wires of any site I've ever found.
First and foremost, I usually start my day by looking at the news. I use the #news/mining tag all the time just to go see what's happening, what's the news of the day. Then if there's something that's got a lot of likes on it already, I'll look closer at that news story. Who is liking the story? Why is it trending? I'll dive into the specific room and see what is the market chatter. Now, a lot of times the chatter is just that and it has not a lot of value. It's people pumping or bashing. But there's some people on CEO.CA, even people that are not widely followed that just make really good points, bring up red flags or point out "hey this thing is undervalued and here's why I think so". So I follow everybody. I'm interested in learning from anybody, even if they've only posted a few times. But of course, there's people that have proven over time to be consistently good sources of information, very sharp people. So, yeah, I follow a ton of people. I'm always interested in learning. I'm a student of the industry and I feel like CEO.CA's got one of the best platforms for people debating and sharing ideas.
It also gives to me questions that I go and ask companies when we interview them at the KE Report. So I use it as a source of research for my own questions.
Vaughan: I do the same. It's the Internet, so obviously there's going to be a lot of noise and the more we grow as a site, it just gets louder. But if you're paying attention and you learn to use some of the functionalities, some of the ones that you mentioned, even just paying attention to the number of thumbs up in the #Newsroom, it gives you a bit of a gauge of how many people are paying attention.
Excelsior: I like our direct message feature and the private message feature. I use it all the time. If I think someone has an interesting comment, but I didn't understand it and maybe I don't want to air it out publicly, I'll just private message the person and say "hey, what did you mean by that?" or "Hey, tell me more about that" or "Hey, where did you get that link?". Sometimes people are shy to say things publicly in a critique of a company. If you get somebody into a private chat or some of the private rooms that have been developed, people can speak a little more freely and let their hair down. I find that to be invaluable.
Vaughan: Just to be clear as I get this question often, the direct message and the private channels: they are private. I can't see them as moderator at CEO.CA, I don't moderate them, it has nothing to do with us. People are more willing to tell or speak their mind in these channels. One of the other benefits of the direct messages that I found is to bring things back to reality. The Internet is anonymous, people are generally terrible and they're not necessarily speaking in a way that they would if they were sitting down in front of another person.
When you connect through a direct message, people kind of like snap back out of that a little bit and it's a little bit more personal. You can actually create better connections, REAL connections and people will share. People have reached out to me and eventually they've given me photos of their families and cars and businesses, unsolicited. If it were just in the regular channels you'd never see that, it never would have happened.
Excelsior: 100%. A lot of times I've even had people that were kind of semi trolling me that reached out to me through a private message. After we started talking, they're like "OK, well, hey, maybe I misunderstood you". And then he became a big fan like "I'll start following your your post after this". So a lot of times we've done a U-turn just by having that little offline chat.
I want to mention one other thing, because I think there's a lot of pluses for CEO.CA so I promote it all the time. I like the tagging feature and I don't think enough people tag their stuff correctly where other people can find it. Like if you tag gold, silver, zinc, oil or interest rates, inflation, the Fed... I've been accused of being an over tagger, but I like it because if I want to find everything on interest rates, boom, I click the tag. If I want to find everything on a particular company that's already pretty well entrenched in the culture. But I don't see a lot of people connecting the dots as much on the tagging so I use the sector rooms. I don't have a public watch list, I have a public sector room that I post because I think there's a lot of funny ones. There's even stuff like #CEOFM where it's just like songs that people posted for the day. There's just some times where I use it just for that,: I'll go down a wormhole with with a tag and see everything.
@MiningBookGuy is a prolific poster and I liked his #MBGTrends thing because I like the people in the room. I get a kick out of them, I like them and sometimes I'll tag that just because I like those guys. Sometimes it's nice to focus on just that subsector. So I just wanted to give a hat tip to the tagging feature on CEO.CA and how helpful it is.
Vaughan: CEO.CA is like organized chaos and that is to speak to the tags. You go in to a tag, you're looking at it and it seems like "what the hell is going on?" sometimes. But once you do learn about these tags, you can really get down into the nitty gritty of things. Also like you said some of those private channels are great places just to get info about a certain type of company. If you're looking for royalty and streaming companies, you can go in to that tag. If you're looking at West Africa, you can go and check it out ~Aufrica. People have tried to mirror the #MBGTrends type of channel. Some have stayed some have not but it's definitely a great feature.
Excelsior: I check them all out like the #PrivateHotpicks room or #PilbaraSisters for everything related to the Pilbara gold rush that was going on. Sometimes an area play will get one. I like following area plays like if it's Golden Triangle, I want to go to the Golden Triangle room and a lot of times I'll find out about companies I didn't even know existed because luckily somebody else has tagged it. And I think, oh, I didn't know that was in Newfoundland, I didn't know that was the Golden Triangle, I didn't know that was in Red Lake. So I like tagging. The area plays, too, because that's how you find out about hot new stocks that have maybe just gotten started
Vaughan: Some have created the watch lists and tag it to those channels where they can actually just lay out a bunch of companies. That's a great place to go and say "well, OK, I know of two or three companies in Newfoundland..." but there's thirteen in the list and all of a sudden you realize you've got some more work to do.
Excelsior: [00:16:20] Yeah, absolutely. Even people have done stuff like an Eric Sprott watch list or sector specific ones like lithium or nickel. Sometimes people just have a watch list of a smaller area or smaller scope. But if you're going to get into something that's a niche metal like rare earth or lithium or graphite, it's helpful to use those tags to find out who's in the graphite space? They're not always widely publicized. It's hard to find information. They're more opaque. Even the uranium room, I use it all the time because people will post relevant news in there and they won't post it on the index
and they won't post it in other areas. You've got to go to the uranium room to go find some of those news blasts. I find those sector rooms almost like not just a watch list of companies, but a watch list of breaking news or developments.
Vaughan: There's endless number of things that we can look at it: benefits, functions, people who I've learned to follow and so on, that I've forgotten half of what I know based on what I've seen on that site.
Now I want to go back to one of the we had mentioned at the very beginning of this, and that was the KE report. Is it a reboot or is it just growing?
Excelsior: [00:17:31] It's just expansion and growing. Big Al, who started the site has really gone more on the political side. He's kind of getting closer to retiring, but he's still very active on the political side. Corey really wants to focus on the economic side and the investing side in particular, small cap investing, but also a generalist. He doesn't want to just be another pump site, so he's been very clear to me that he wanted help expanding.
I've been active on the blog for a decade. I just threw caution to the wind and told the blog that I was moving and I didn't know what I'm going to do, so wish me luck. Corey saw that and asked "What are you going to do?" I said "I have no idea. I'll probably get another job in sales and marketing". I've been focused more lately on technology sales. I'd work for Canon for the last eight years. He said "why don't you come work for me? I need someone that knows the mining industry and that can help with the editorial's, help with the interviews, because I need help vetting these companies. There's thousands of companies I can't keep up with all of it. So we want to grow the site so we can do more interviews, more content, more generalist. And if people have been following, I've cherry picked a couple of our superstars from CEO.CA. We've got @Goldfinger over there. We've got @DocJones over there. We've got Eric Wetterling, the @HedgelessHorseman. And I'm looking to bring over a few more rising stars because I look at it like we're scouting in the minor leagues looking for the future all stars that are going to be major leaguers.
We want to share those new voices, not just the legends that have existed for so long that everybody's aware of, but some of the new voices and who's following these companies and who's an influencer. We want to be on the cutting edge of that and I'm honored to be able to be part of the team and help. So it's not really a reboot, it's more a how do we grow the thing and how do we get better and how do we share more content?
Vaughan: I suggest anybody who hasn't already listened to KE report head on over there. They produce content daily and from a content production point of view, its mad. It's a good place to know of and if you're going there you're going to be able to see new content popping out all the time. So I'd say head on over and check it out.
Shad I won't take up any more of your time, but I appreciate you taking the time to talk to me. I'm going to reach out again but we'll do something different. Maybe we'll dive deeper into some of the companies or we'll figure out a way to get something out there.
Excelsior: Sure. Be glad to. And hey, it was an honour being on your show and it's an honour speaking to the CEO.CA Audience. I love the community. I love being part of it. I think I've been around since 2016 there and I'm so glad I found it and I recommend it to everybody.
Come check us out over at KEReport and anything I can do to help folks, I'm always glad to do it. I'm just an individual investor like everybody else, but we do our best to stay informed and and as I always say, ever upward.
Vaughan: Right on buddy. I appreciate it. Cheers.