READ TIME: 7 MINUTES
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This report is an in-depth exploration of true contrarian investing in the junior mining sector, based on a high-level interview with Luc ten Have. It challenges the popular but flawed perception of contrarianism as simply buying what’s hated and instead lays out a rigorous, bottom-up framework focused on niche specialization, valuation discipline, and obsessive due diligence. Call it; “Rock, Paper, Stock.” Luc and I talk about what’s actually worked in this cyclical, sentiment-driven sector, and how to avoid being just another victim of top-down macro hype.
TL;DR
- 1. Contrarianism isn’t about buying what’s hated—it’s about buying what’s ignored, yet fundamentally sound.
- 2. Top-down macro narratives rarely outperform; real edge comes from bottom-up specialization in a niche you understand better than anyone else.
- 3. The “Rock, Paper, Stock” framework—geology, capital structure, and financial health—should guide the research process.
- 4. Patience is critical: the best setups are often forgotten companies trading sideways, where nothing can disappoint and only a positive surprise remains.
- 5. Only a small percentage of companies ever outperform—obsessively track that 4%, and ignore the noise surrounding the other 96%.
Why Be a Contrarian at All?
Luc ten Have’s opening thesis is deceptively simple: “You want to be contrarian because you want to get a low entry.” In mining and exploration—one of the most cyclical sectors in the market—timing your entry point is half the battle. Get that right, and many of the operational headaches downstream become a little easier to tolerate.
But the discussion quickly turns: is what most people think of as contrarianism actually wrong?
Are Most Investors Doing Contrarianism Completely Wrong?
In my brief experience in the sector, most self-declared contrarians are just market followers with a -1 correlation. The pattern is familiar: investors chase sectors that are beaten up just because they’re cheap, then flip out before the thesis plays out. I thought I was being Mr. Smart Pants Contrarian until my pants got handed to me, and I had to eat them with no ketchup—not even mayo.
The result? A kind of faux contrarianism based on macro narratives, not fundamental bottom-up analysis.
True contrarianism isn’t just about buying unloved sectors. It’s about being “niche-focused,” obsessively specialized, and immune to the surrounding noise. I think there’s only one way to not be the victim in junior mining speculating. And it’s not contrarianism—but becoming niche.
Top-Down vs. Bottom-Up: Which One Actually Works in Mining?
Again, in my brief experience so far, top-down investing is what creates the so-called victims in this space. And that’s the crux. While top-down ideas—like betting on uranium just because of bullish macro narratives—can sound compelling, they often lack the discipline of company-level scrutiny.
Instead, I think a better approach might be forming a repeatable bottom-up process, which I call “Rock, Paper, Stock”: geology, capital structure, and financial strength. When understood properly, this trio can give a clearer, more rational framework than sentiment-chasing macro plays.
What Does a True Contrarian Stock Setup Look Like?
Luc offers a rule of thumb: look for stocks where “boring is high and emotion is low.” He’s not interested in catching a falling knife or chasing a hot tape. He wants companies that bottomed years ago, are trading sideways, and are fundamentally misunderstood or ignored—not simply hated.
That boredom, he argues, gives the buyer time: “Time to call the company. Time to do proper due diligence. Time to buy the position slowly.” It’s not sexy. But it’s where real contrarian opportunities live.
Should You Buy What’s Hated? (Even Asbestos?)
If being contrarian means buying what’s hated, do I go long asbestos?
Luc’s point: buying a commodity or stock simply because everyone else hates it is not a sound strategy. Without understanding the business case—or the project—it’s just financial cosplay.
Instead, Luc prefers to find companies he already understands or owns and then let the sector macro come to him. “I’m not really someone looking at a metal and then starting to look for a company,” he says.
Is ‘Geo Alpha’ Real—or Just a Narrative?
Discovery still matters.
Even in an unloved sector like nickel, a high-grade intercept helped Luc profit where most lost. That discovery alpha, he argues, is still very real—but must be paired with management that “cares.”
He gives the example of Nican Resources: “The management team cares. That’s already a big difference. Most companies have people running it who have five other things.” Add shareholder alignment and capital discipline, and he sees the potential for asymmetric upside—even if the commodity stays out of favor.
Why Is Contrarianism So Seductive (and So Dangerous)?
Being contrarian feels good. It flatters the ego. We want to be the smartest sheep, so we try to go the other way. Real contrarians try not to be sheep at all.
But the trap is real: too many investors latch onto grand macro theories without any regard for execution risk or capital structure. My IQ runs into problems pretty quickly after that. How do I track sentiment? How do I put it into a spreadsheet?
Luc doesn’t claim to have a perfect answer, but he offers a clear path forward: “The few people I know who make money in this space—they obsess over one corner of the sector. They ignore 96% of the noise.”
How Do You Know If You’re Early—or Just Wrong?
The line between early and wrong is thin. Luc admits he’s often two years too early—but rarely completely wrong on his boring picks. “The more comfortable you are, the more relaxed you are,” he says. “Ideally, you can think about it for a week, then another week, and still make the same decision.”
Key to that comfort is scenario planning: what happens if your thesis fails? Can management pivot? Is dilution priced in? If the downside is minimal and the team has capacity to execute, Luc is happy to hold—even if the story takes years to play out.
What Is the Real Contrarian Edge in 2025?
True contrarianism today requires edge in one of three areas:
- Unknown – no one’s watching.
- Misunderstood – geology, structure, or story is complex.
- Unloved due to timing – macro is bad, but fundamentals are sound.
Luc’s method leans toward the first two. “Eighteen of my 34 stocks, I think most people don’t know about,” he says. And yes—he admits 34 might be too many. “I think I have 20 that I really think about.”
So When Do You Give Up on a Stock?
“Rarely,” says Luc. He often holds through years of boredom, especially if the valuation is compressed and there’s a backup plan. “At some point, the valuation is just low. There’s not much left to disappoint.”
But dilution is a real risk, especially for companies that burn $500K–$600K/year just to stay alive. He looks for situations where cash is still intact, insider alignment is high, and downside is limited.
What About Buying Stocks That Are Just Down 90%?
Luc cautions against it. “You need to understand why it’s down—and what has to go right for it to work again.” Most companies never recover from 90% drawdowns. But those that do? They make up the 4% that drive nearly all sector returns.
He shows a slide with 1,500 companies: “Half trade within 50% of their 1-year low. But only 4% delivered 600%+ gains over the past 3 years.”
The key? Hang out with that 4%. And that means stock-picking, not sentiment-chasing.
The Contrarian Method Is Alive, But You Might be Probably Doing It Wrong
Contrarianism isn’t dead—but it’s rarely done right. It’s not about chasing hated sectors. It’s about doing hard, boring work at the micro level, obsessing over details, ignoring macro noise, and building positions in forgotten names—then waiting.
And waiting.
As Luc puts it, “The best time to buy is when nothing can disappoint anymore. When the only thing left is surprise.”
That’s contrarianism in 2025. Not buying asbestos. Not praying for a macro reversal. Just doing the work—Rock, Paper, Stock—and betting when no one’s watching.
You’re Either a Contrarian or a Victim (or maybe just lost)
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