All served to a full house at last Wednesdays Investor Evening at The Cote Brasserie in London.

On the bill were two near term gold and platinum production stories, Ariana Resources (AAU) and  Eurasia Mining (EUA), but we kicked off with an expert presentation by gold guru Alasdair MacLeod, Head of research at GoldMoney.

Many in the audience were, like us, dyed in the wool gold and precious metals advocates, with a focus on the discovery stage; so in many respects Mr MacLeod was preaching to the choir.

But the investment case for gold has many strands and is far more diverse than many might realise. Alasdair eloquently drew those strands together in a fascinating presentation, covering gold’s role in the world as money from a socio-economic, cultural and historic perspective.

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The AiM small cap arena has always attracted big characters with strong opinions and a penchant for high risk – high reward investment propositions. In truth they probably all go hand in hand.

Many a fortune, large and small, has been made and lost here in short order - probably more so than in any other form of speculative activity known to man. And before you ask me for the stats, I don’t have any, it’s just my opinion - which as an investor I know I am always entitled to.

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For every seller there is a buyer and it’s invariably the smart money that buys what the foolish money sells.

Nothing can evoke human emotions quite like gold, a factor which underpins its role as a store of wealth in the minds of many. Much has been written in response to last month’s sharp price fall; many theorising that it was an orchestrated take down whilst exploring the scenarios that could have inspired such a move.

The drop was indeed savage, but the reaction was equally something to behold, triggering a veritable tidal wave of “physical” buying from around the world; clearly demonstrating that whatever market manoeuvers might take place at lower prices, gold’s universal appeal as a store of wealth is irrefutable.

Often absent from the commentary was any reference to gold’s supply and demand fundamentals; a factor which, regardless of short term price movements, points to sustained and probably significant future price increases.  The populations of India and China account for well over a third of the people on earth. Brookings Institution scholar Homi Kharas estimates the American and European middle classes will shrink over the next 30 years from 50% of the world’s total to 22%.  In contrast, rapid growth in India, China, Indonesia, Thailand, Vietnam and Malaysia will, according to the United Nations, move Asia’s share of the middle classes from its current 30% to around 66% by 2030. The significance of these projections should not be discounted.

The game changing and staggering rise of the Asian middle class is set to unleash a rapidly increasing number of eager physical buyers with both an historical and cultural yearning to own gold and the disposable income to buy it.

In view of these fundamentals, we have compiled MiningMaven’s 21 compelling reasons to buy physical gold and miners with gold in the ground, and here they are!

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I have been an aficionado of the stock market for quite some time.  From early dabbling with student monies I managed to generate a fairly chunky return from TSB plc, Northumbrian Water and others I can’t quite recall.  I lost a fair bit too along the way such as on an ill-advised entry into Coloroll in the vein hope of a dead cat bounce - which never arrived.

The excitement and thrill of the whole stock market trading business has, for nearly thirty years, captivated me.  And so much has changed.

In the past, buying my stocks involved lots of paperwork and selling required lots of standing in queues at the Midland Bank at the top of King Street in Manchester, at the special counter reserved for the “dark art” of stock trading, currency and AOB.  Then along came the Share Centre which, like Direct Line for Insurance, seems to make the business of trading far more straightforward.

Then came the internet in the mid to late 1990s and brought ADVFN to my attention just in time for the Dot Com boom.  Of course they should really have called it the Dot Com boom and bust.  In late 1999 and early 2000, as one broker tells me, you went to bed at night knowing that tomorrow you would make money and lots of it.  But that of course all came to a spectacularly well publicised end.

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Frank Loesser was an American songwriter who wrote the lyrics and music to the Broadway hits ‘Guys and Dolls’ and ‘How to Succeed in Business without Really Trying’.  Another of his famous hits, published in 1947 was (I’d Like to Get You on a) Slow Boat to China, a well-known pop standard performed by many greats including Rosemary Clooney, Ella Fitzgerald, Fats Domino and Liza Minnelli.  Not forgetting of course Miss Piggy’s later rendition with actor Roger Moore on The Muppet Show, and Sir Paul McCartney’s performance of the song in honour of Loesser.

The idea behind the song was that a slow boat to China represented the longest journey one could imagine, and although Loesser moved the phrase to a more romantic setting, it eventually entered general parlance to mean literally anything that seemed to take a very, very long time. 

For dedicated natural resources investors it might feel like our slow boat to China has been sailing around the world several times on a detour to its final destination.  And as the more weary investors jump ship for perceived easier and faster returns in the rising broader stock market, only those with greater insight remain on board.  Those that remain will know the ‘set of the sails’ will see them to their final destination; regardless of the direction of the wind or the treacherous waters on which they sail.  They will also understand that waves are measured not in height, but in increasing increments of fear; and those waves of fear may rise to a level where only the hardiest of natural resources investor will be equipped to ride them out.

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