Thursday, June 2, 2016

Eric Sprott Is Also A Trader

A few weeks ago I posted a number of articles on the acquisitions made by Eric Sprott. Mr. Sprott is a notable resource investor - he invests in the long-term and his acqusitions are tracked by many investors. However, apart from being a long-term investor, Eric Sprott is a short-term trader as well. 
Let me show a few of his last transactions.


Excellon shares went strongly up on the news that Eric Sprott made a substantial acquisition. To remind my readers - on April 4, 2016 Mr. Sprott acquired 6.67 million shares of Excellon (plus 3.33 million warrants) paying C$0.45 a share.

Then, between May 2 and May 20, he sold 0.6 million shares (a small part of his holdings) at prices ranging from C$1.32 to C$1.36 a share. In that way he made a nice profit of C$536 thousand in just a few weeks:


Newmarket Gold

On April 4, 2016 Eric Sprott bought 10 million shares of Newmarket Gold at C$2.25 a share. On April 26 he bought additional 16.2 million shares paying C$2.80 a share. 

Then, between May 13 and May 18 he sold 455.3 thousand shares at C$3.97 a share, on average. Similarly to the Excellon deal, he made a quick profit of C$627 thousand:



In the above described transactions, Eric Sprott made a total profit of C$1,163 thousand in just a few weeks. 

I do not know why Mr. Sprott does it. Maybe he tries to time the market - when he sees that prices went too high and too fast he sells part of his investment to buy back at lower prices. We'll see. 

But looking at his transactions it looks like he is able to time the market in some way.


  1. Stocks pop when news comes out of a buyer like Sprott. I usually wait a few weeks until the price comes back down.

  2. I'm left asking questions after enjoying this read.
    Can we mimic the pros? (Does history have to repeat itself for us to mimic the pros?)

    Perhaps not. Perhaps we can at least pick up half a pro trade.

    If Eric Sprott sells again at prices above $1.30 for Excellon and after price is rejected at $4 for Newmarket...
    should we SHORT ??

    What would CONFIRM a mimic trade of an Eric Sprott SELL would work as a SHORT sell for us?

    As pro traders point out it is rare that technicals confirm fundamentals. Perhaps there is absolutely no way to know that mimicing an Eric Sprott trade will pay off... except by looking in the rear-view mirror. Sometimes we just have to take a chance (small chance - don't bet the farm) and see what happens.

    1. I do not think it is a good idea to mimic Eric Sprott or any other notable trader / investor. First of all - you never know why Mr. Sprott sold his shares (I just speculate that he did it to purchase them back at lower prices but, basically, I do not know that for sure).
      Then, looking at the yesterday's trading day (PM stocks went strongly up in a furious way) - there may be no chance to buy back PM stocks at lower prices.

      So, in my opinion, the best idea to make money in resource stocks is (provided that your investment thesis is "PM stocks are in a bull market phase") "Buy and hold".

      Timing the market is very risky - simply put, in a search for short-term profits you create mental problems, for example:
      - when to buy back
      - at what price to buy back
      - if the market bounces strongly up - what shall I do

      Holding stocks during a strong bull market is a comfortable strategy - there is only one question: when to abandon this market.