Survival First. Profit Second.

Speculation in Mining: Risk, Reward, and Reality

📍 I sat down with Denaliguide, Nick, to launch a new series exploring speculation in mining. To start, we asked the most basic question. It is also the most important question: what do we really mean by speculation? How does it differ from investing?

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Speculation vs. Investing

Speculation is essentially putting money into something in the hope of making a profit. You aim to get more back than you put in if your guess is correct.

Investing, however, is slower and steadier. It looks like putting $50 or $100 into the bank. You save until you’ve gathered enough to buy a solid stock or mutual fund. Then, you continue to add to it over time. Investing looks ahead one, two, or three years.

Speculation is quicker, riskier, and comes with no guarantees.

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Risk and Reward: Two Sides of the Same Coin

As Nick reminded me, “If you want reward, you have to have risk.”

In mining, that could mean buying $300 worth of shares in a junior miner. You then watch the value climb to $900 when good news breaks. That’s a win — if you sell.

But speculation often plays out in roller-coaster fashion. A $10 stock might climb to $12 or $13, filling you with confidence, only to collapse to $9 or $8. Without a plan, it’s easy to get trapped, holding on and hoping for a rebound that never comes.

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Skill or Luck?

Is success in speculation a matter of skill, or just being in the right place at the right time?

Nick’s answer was blunt: “I’m not sure there is skill. We’re taking scientific wild guesses.” Speculation is about making the most informed decision you can with the information available. Still, luck and timing often play a larger role than most would like to admit.

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Why Speculators Lose

The number one reason people lose money in mining speculation? No plan.

• They buy without knowing when they’ll sell.
• They hold on too long, hoping the stock will bounce back.
• They treat miners like blue-chip stocks, expecting the economy to eventually rescue their position.

Nick stressed that every speculator needs rules. If you buy at $10, decide ahead of time how much loss you’re willing to tolerate. If it’s 10%, then when the stock hits $9, you sell. No hesitation.

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The Market Forces You Can’t Control

Even the best-laid plans can be overturned by global forces.

Nick shared the example of potash, a strong Canadian sector. But when Ukraine expanded exports, global supply surged, prices fell, and Canadian potash stocks tumbled.

For the small investor, this is why due diligence is non-negotiable. Or, as Nick often says: DYODD — Do Your Own Due Diligence.

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The Mindset Shift

Speculation isn’t a hobby; it’s a business.

That means moving from casual “let’s see what happens” to structured risk management. A disciplined mindset looks like this:

• Decide your exit strategy before you buy.
• Set stop-losses to protect yourself.
• Define profit goals so you know when to walk away.

Without discipline, it’s not if you’ll lose — it’s when.

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Survival as a Form of Victory

In mining speculation, even breaking even can be a win. Protecting your capital means avoiding “capital attrition” — the slow erosion of your hard-earned money.

As Nick put it: “You lose your money. Then you figure out, geez, I had to work 160 hours for that.” Survival keeps you in the game for the next opportunity.

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What’s Next in This Series

This conversation was just the beginning. Over the coming weeks, we’ll explore:

• What winning looks like in speculation.
• What losing really looks like.
• Lessons on managing risk vs. reward.

It’s going to be an honest look at the realities of mining speculation. It will not be about happy excitement. Instead, it is about the anxiety and discipline that come with playing the game.

As always, Nick leaves us with the reminder:

“Do your own due diligence. Protect your capital. Survival first, profit second.”

Stay tuned as we unpack these lessons together throughout September.

Doll for Denaliguide aka Nick