Here's how it works:
We have assembled a team of experts who specialize in identifying and capitalizing on the right market opportunities in the natural resource sector.
We consider ourselves "intrinsic value investors". We are seeking value propositions in the mining industry with a margin of safety component, similar to the Benjamin Graham/Warren Buffet philosophy. We start with the same metrics as any value investor, but then we add our own customized screening process to natural resource companies.
The margin of safety, as advocated by Graham, is the idea that if a stock is trading at or below it's actual book value per share, then the worst case scenario (liquidation) provides a margin of safety for the investor even after the company's assets are liquidated. But after the distribution of the assets to the shareholders, the investors are left with US dollars -- basically fiat currency IOU's from the US government. More precisely, the currency is based on the government’s ability to levy and collect taxes on it's citizens. So despite the original margin of safety, how safe is it if you are left with a volatile currency whose value can evaporate at any time?
This is precisely where intrinsic value investing has a role to play in your portfolio.
When the value philosophy is applied correctly to the natural resource sector, it gives the investor an even stronger margin of safety, because the underlying assets in a gold mine is gold in the ground; or in a silver mine, it's silver in the ground. These assets are not IOU's. If the company is ever liquidated, and there is real share value, then the stockholders end up owning these mineral assets. These assets have actual intrinsic value. That's why we call this strategy "intrinsic value investing".
Our process is fairly straightforward:
- We identify a collection of target companies.
- We utilize an initial screening process to help us identify only those companies with the right combination of high return potential, and minimal downside risk.
- We apply a much more rigorous screening process which is specific to the mining industry. This research accords us a higher probability of success.
Our objective is to help capitalize the right companies. To find them, we not only focus on good economic fundamentals, but we seriously evaluate human capital, always a key factor in the ultimate outcome of any venture. As we evaluate management teams, we seek out individuals with high integrity and proven track records in the field.
In many cases, we will take an active role in the business in order to help maximize results. We may suggest that one of our experts take a board position. We may provide consulting services. We may refer experts by giving the company access to our vast network of mining professionals.
At Alliance, we take investing very seriously. If we invest in a property, we will be on that property, working closely with the principals. It is our prerogative to be familiar with the variables that could cause us trouble in the future. Our management team is just as comfortable wearing Carhartts and a pair of steel-toed construction boots, as they are in the board room.
In addition to our investing prowess in the natural resource sector, Alliance also offers a unique investment advisory service to our clients. Our traders specialize in high probability trades using our proprietary analytics. We trade stocks, bonds, etf’s, options and more. Our trading department works as a team to maximize returns using a disciplined approach combining fundamental and technical factors.
By delivering excellent results to our clients in both of these areas, we develop successful business relationships through mutual trust and respect.
