According to Vancouver capital markets veteran Ron Loewen, evidence is mounting that the Canadian TSX Venture Exchange (“TSX-V”) has hit bottom and investors have a rare opportunity to create wealth by investing in early stage TSX-V companies. Mr. Loewen specializes in funding and advising on the restructuring of early stage, publicly traded, resource exploration companies. In this interview, Mr. Loewen shares his views on the market and small cap natural resource companies poised to benefit from the ever rising demand for Lithium created by advancing technologies and the green energy movement.
The views of Mr. Loewen are not necessary those of the interviewer, Peter Epstein. Please see applicable disclosures at the bottom of the page.
Ron, thank you for taking the time to speak with me. Can you tell readers a little bit about your background?
I’ve been involved for most of my adult life in the Canadian Venture Markets (“TSX-V”). I was a stockbroker from 1984-2011 and a contributing writer to various industry publications. I’ve had hands on experience in the practical aspects of TSX-V and formerly VSE publicly listed companies. I have extensive experience in advising TSX-V listed companies on how best they can restructure debt, reorganize management and, if necessary, restructure the capital structure. I ‘retired’ several times, but since I always invest my own capital, I find it necessary to babysit my investments to help ensure success. Further to that, I now run my own private equity firm to assist those seeking advice.
To invest in early stage companies, you are required to bet on the jockey, not on the horse. My background has always been in high-risk, early stage companies and I have used my experience as a contrarian investor and set my focus entirely on early stage natural resource exploration companies. Early stage exploration companies are very, very high risk and, “you need to break a few eggs to make an omelet.” Most importantly, I put my money where my mouth is and invest in companies I can help.
So, you’ve been in the Canadian Venture Capital Industry for many years. What have you learned along the way?
The TSX-V is a difficult animal to understand and predict, which is where my contrarian investment philosophy comes in. When times are bad, it’s hard to make aggressive decisions, yet I push past that insecurity and make the tough decisions when I see an underlying opportunity. Most investors suffer from the fear that, ‘it’s different this time,’ that things won’t get better, but the history of the TSX-V proves that with regard to the market, things have always gotten better. Historically the market has always returned to, ‘buy on any news.,’ from, ‘sell on all news.’
I’ve learned from mistakes I’ve made and I take ownership of them and try not to repeat them. If you don’t learn from mistakes, then you’re more likely to repeat them.
So, what’s a typical day like for you?
Well, you need to work hard to be successful. I generally put in about a 12-16 workday, 6 days a week. I like to involve my children in my work and would love to see them follow in my footsteps. A hard driving business and work ethic is in my blood. My daily routine involves a lot of research into the sectors I follow. I search out new reports and articles that I read and post on various social media platforms. This routine helps keep me informed and up to date. I basically study anything related to green energy and green energy metals. This knowledge has helped me work with companies like Visual Capitalist to collaborate on ‘infographics’ that inform the public about Lithium and the markets. Currently, Visual Capitalist and I are collaborating on a very in-depth, industry relevant piece.
You mentioned that you consider yourself a technical market contrarian, what are your thoughts on the market now?
The TSX-V is well off its bottom, up about 20% from January 20th 2016, and capital is becoming easier to find. Despite the uptick in small caps, the TSX Venture is still down about 75% from its March 2011 high. There seems to be a growing consensus that markets are improving. I’ve been assisting early stage Lithium exploration companies for the last 18 months an undoubtedly there has been a mini boom there for companies on the TSX-V that have seen this new opportunity.