Adrian Day's six investing signs to watch for natural resource mining and extraction companies (from How to Listen When Markets Speak):
1. Underinvestment bias - Look for periods of underinvestment that could lead to shortages and higher prices
2. Asset location - Diversify away from problem locations
3. Production capacity - What is the capacity of reserves left
4. Price to free cash flow - Do not overpay for free cash flow
5. Price to NAV - Do not overpay for ground reserves and the total value of assets
6. Management - Look for stable long-term management that delivers on promises.
Good, simple advice for making investments that can all be, to some degree, systematized.
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