On this week's Stansberry Investor Hour, Dan welcomes Joe Boskovich to the show. Joe is the founder of Old West Investment Management, an investment firm focused on finding high-quality companies with deep value.

Joe kicks things off by sharing his background in company management. He states that he uses his past experience to evaluate how the companies he considers investing in are being run. Examining the steps management takes and how they behave will reflect their long-term goals with the company and if the correct actions are being taken to help the company succeed. And Joe says one of the easiest ways to gain insight is by seeing how they're being paid...

When a new idea comes before me, the first thing I do is look at the proxy. And the proxy is going to show me the level of ownership of management. And it's going to show me compensation and how they compensate themselves. And so I love seeing companies where there's very, very high ownership and very modest compensation... So basically, when you invest in that company, your interests are aligned with the people running the company versus most companies where there's just a giant compensation package and that CEO is going to knock down $25 million to $30 million a year no matter what, and I really don't have much interest in that.

Next, John compares the differences between deep-value companies and distressed companies, showing how one that might appear to be "junk" might have potential if it's run well. And while folks love the big tech companies, most don't think about the metals that are needed in the products that they manufacture, which are where the bigger opportunities lie...

[Our company loves] tin, silver, uranium, but really metals that are tied to the electrification of the globe. Everybody wants to own Nvidia. Everybody loves the fact that Microsoft's building these data centers, but really, nobody's stopping to ask, "Where are you going to get the copper to do all this?"... And tin, few people know what tin is used for... It's used for solder and electronics and every piece of electronics – every piece of electronics in the world.

Finally, Joe and Dan talk about company scale and how companies should handle expanding locations. And Joe mentions how stock picking has become "a lost art" due to investors putting their money into indexes and exchange-traded funds. He shares several companies in the homebuilding sector that have caught his attention. And he warns about selling your stocks too soon. Joe views his investing as a "partnership" with the companies that he wants to own in the long run...

The biggest mistakes that I've made in my career are selling things too soon. And I could give you a long list of companies that I bought it, I owned it, I made great money, I'm long term on it... just company after company after company that I had it right... So I love the idea of buying something and holding it for a very long time.

Click on the image below to watch the video interview with Joe right now. For the full audio, including Dan's post-interview thoughts, click "Listen" above.

(Additional past episodes are located here.)

This Week's Guest

Joe Boskovich is the founder and chairman of Old West Investment Management. Prior to founding the company, he built up his experience as the CEO of Boskovich Farms, one of the U.S.'s largest privately held produce growing and processing businesses, and later, vice chairman of Aletheia Research and Management.

Joe earned both his undergraduate degree and his Master of Business Administration from the Marshall School of Business at the University of Southern California and is currently a member of the university's board of trustees.

Dan Ferris:                 Hello, and welcome to the Stansberry Investor Hour. I'm Dan Ferris. I'm the editor of Extreme Value and The Ferris Report, both published by Stansberry Research. Today, we're going to talk with Joseph Boskovich. Joe is the founder and chief investment officer of Old West Investment Management. He is a value guy just like me, so I know we're going to have a great talk and you'll enjoy it very much. Let's do it. Let's talk with Joe Boskovich. Let's do it right now.

                                    Joe Boskovich, welcome to the show, sir. Thank you for being here.

Joseph Boskovich:      Thanks for having me.

Dan Ferris:                 So, Joe, you're a new guest. We haven't had you on the show before, so maybe we'll dive in and you can just tell the listener who you are and what you do and then we'll talk.

Joseph Boskovich:      Sure. OK. Yep. My name is Joe Boskovich. I am a third-generation Californian. I founded Old West Investment Management in 2008, right in the middle of the Great Recession. We opened our doors November 1 of '08 –

Dan Ferris:                 Wow.

Joseph Boskovich:      – when the entire economy seemed to be imploding.

Dan Ferris:                 Great time to buy stocks.

Joseph Boskovich:      Well, I think the worst of times, I think, is the best of times to start something.

Dan Ferris:                 Yeah.

Joseph Boskovich:      And it turned out to be – that to be the case. But my background is actually in agriculture. My family has farmed in California for over a hundred years. And between undergrad and graduate – business school I took what was going to be a temporary job with my family. The temporary job lasted 22 years. Built a big family company. It's still in business today. It's Boskovich Farms, a California-headquartered grower, shipper, processor of fresh vegetables.

Dan Ferris:                 That's a heck of a good part-time job you got there, Joe.

Joseph Boskovich:      I know, right. Right. Yeah. Yeah. And then, as I approached my late 40s, I was approaching 50 years old and I thought, "Was I ever going to do what I always dreamt of doing?" And that would be – I just had a lifelong affinity for picking stocks and analyzing companies.

                                    And so, I did a complete career change and – to what I'm doing today. And I'm blessed because I've had two different careers that have both been very fulfilling. Pretty hard to beat working side by side with your dad and your brother for 22 years. And so, that was great. And then I'm really very – but I think a key point would be the fact that I ran a company – most people that do what I do, they've been buying and selling stocks their entire career. And so, the fact that I actually ran a company for 22 years and – I think makes me a different kind of investor. I really look at it like buying a company, not buying a stock. And I take a different angle towards the company I'm analyzing. I put huge weight on management and the people that run these companies. So, it's really a key to our investment process. But that's a longwinded answer to who I am and what I'm doing.

Dan Ferris:                 Exactly the kind of answer we like around here, Joe. Thorough. We're not in for soundbites. We want the real story.

Joseph Boskovich:      Right.

Dan Ferris:                 So, focus on management is what really – out of all that, boy, that's the thing that caught my ear. Plus, you reminded me of what Warren Buffett has said many times: "I'm a better businessman because I'm an investor. I'm a better investor because I'm a businessman." The two work together. And I've seen it in others too. It's – I'm not much of an entrepreneur myself but I'm a decent investor.

Joseph Boskovich:      So, if you think about it, companies are really just a collection of people. And I think that the people that run the companies is just – it's just beyond huge, the importance of the people that run these companies, and especially the CEO. And so, yeah, no, I – and there's a lot more to it but it's definitely a key part of our process.

Dan Ferris:                 Right. This is fascinating in light of another famous investor – I'm pulling famous investors out of my hat left and right here – Peter Lynch, who often said something like, "You want a business that's so good anybody can run it." It doesn't quite work out that way in real life, though, does it? You can have a great business – you see founders coming, like Howard Schultz had to go back to Starbucks and all that stuff. The person matters. The people matter.

Joseph Boskovich:      No, they do. They do. But I think – he's right in terms of, say, a Coca-Cola, a Procter & Gamble, a Johnson & Johnson, where in these real big classic old companies the CEO in many cases is almost a placeholder. But we're value investors. We're deep-value investors. And so, it's a different kind of a game than buying a – one of these – a Coca-Cola. What we do is much different and where a –  and in many cases, it could be a turnaround where there's much more value placed on management.

Dan Ferris:                 Right. The – yeah, to get deep value, you're farther down the quality trail than Berkshire Hathaway or Coca-Cola or something or American Express or whatever. So, you –

Joseph Boskovich:      Well, I would not – I don't agree with that.

Dan Ferris:                 OK.

Joseph Boskovich:      You say deep, deep down the value trail, but it could be an outstanding company that is just misunderstood by the market and is cheap. But don't confuse the stock price with the quality of the company.

Dan Ferris:                 Well taken. Point well taken. I was thinking – and I was thinking of specific – I was generalizing about some specific instances. So – but absolutely, point well taken. Don't think the stock price – or the market valuation, to be really specific, is indicative of the quality. It's just –

Joseph Boskovich:      Maybe the market has it dead wrong.

Dan Ferris:                 Right. Which does happen despite much academic bluster to the contrary.

Joseph Boskovich:      Right.

Dan Ferris:                 Right. So, that's interesting. Deep value. So, can you give us an example?

Joseph Boskovich:      Yeah. Many, many, many examples, but I can give you an example –

Dan Ferris:                 Right. The more, the better.

Joseph Boskovich:      I can give you an example of a company where a new CEO made a huge difference. And the company is Bunge. This symbol is BG. And it's a worldwide agricultural distribution company.

Dan Ferris:                 Right up your alley.

Joseph Boskovich:      And the ag world, which, think how big it is. It's – not that food is important other than the fact that we do it all day long, all of us. So, yeah, big business. It's dominated by four companies worldwide. Two are private and two are public. The privates are Dreyfus and Cargill. The publics are Archer Daniels Midland and – which is probably better known, and then Bunge. But Greg Heckman came in as the new – Bunge had been mismanaged for years and stupid investments and misallocation of capital. And so, Greg Heckman was a long-time Conagra executive that they brought in to right the ship.

                                    It's interesting. When you talk about "does management matter," one of the first things he did is he asked the question "We're an ag company. Why are we in New York?" And so, the first thing he did is move the company from New York to St. Louis, right in the middle of the – don't you love that? – right in the middle of the bread basket?

Dan Ferris:                 Yeah.

Joseph Boskovich:      And do CEOs make a difference? And along – it reminds me of another one, is Boeing, where the Boeing past CEOs lived in Connecticut and they lived in New York and they lived everywhere else. And Boeing brings – and Boeing – obviously Boeing, really controversial, really had a tough time. They hired Kelly Ortberg as the new CEO and the very first thing he did is he moved to Seattle. And if you recall the nature of Boeing's problems, what caused their problems were some quality issues: the door blowing out, the plane crashing. So, where do they make most of the planes? Seattle. Why has a Boeing CEO never lived in Seattle? Simple questions.

Dan Ferris:                 Makes no sense. Yeah.

Joseph Boskovich:      Kelly Ortberg was retired in Palm Beach, Florida, living the good life, playing golf. Takes the job. First thing he does is move to Seattle. And of course –

Dan Ferris:                 That's a statement. In light of that history, that's a real statement, isn't it?

Joseph Boskovich:      Well, and if you look what's happened to Boeing since he took over – and he's a wonderful, wonderful CEO. And so, they have – I mean, the stock is up by, I don't know, maybe 30%, 40% since he since he took over. But it's really a great turnaround story. But what a simple thing, to move to Seattle.

                                    And so – but back to Bunge. And so, Greg Heckman says, "Why are we in New York? We're moving to St. Louis?" Which, by the way takes, takes himself out of it. Most people would rather live in New York than St. Louis, but what's best for the company? So, it's just one small example.

                                    And how I got onto the idea – it's actually kind of a funny story. I follow insider activity very, very closely. I mean, even though we have – we have a team, but one of my little exercises every morning is I go through every Form 4 filing published by the SEC every day and for all 4,000 companies. And so –

Dan Ferris:                 Every Form 4 every day? That's amazing, Joe.

Joseph Boskovich:      Yeah, it takes about an hour of my morning, but it's probably my favorite filter of looking for new ideas of what to own and also what not to own. And so, but what I – I saw – I had seen Bunge here and there but – pretty funny, I didn't know how to pronounce it. It's B-U-N-G-E.

Dan Ferris:                 Yeah, me too.

Dan Ferris:                 So, is it "Bung?" Is it "Bunge?" Or "Bung-jee?" Or "Bung-gee?" So, anyway, but I see a $10 million open market purchase by Greg Heckman. And I look at that, I go "Oh my God, he's the brand new CEO. A $10 million purchase." And I said, "Well, it has to be a stock grant. I'm sure they gave him $10 million of the stock as a signing bonus to come in." But I thought "Maybe not. What if he did write a – what if he just wrote a check for 10 million bucks?"

                                    And so, I called investor relations. No one called me back. And I called a second time and nobody called me back. And I – but something was really gnawing at me. And so, I called a third time, one last time. And finally, the assistant – not the head of IR, who should have called me, but the assistant IR person called me. A young man. And we start talking and I said, "Let me ask – my first question is how do you pronounce the company?" And he goes "Bung-gee." OK. All right. So, I get that out of the way. It's "Bung-gee." And that's my first question. My second question is "Heckman, I see a Form 4 –" so, just in case the viewers don't know, when a – when an insider of a company buys or sells even a single share of stock, they have to file a Form 4 with the SEC within 48 hours of the transaction. And so, I – that's – this is my – I'm looking at these every morning.

                                    Now, you said there's hundreds and hundreds of filings every day. How do I have time for that? I basically only look at transactions in excess of a million dollars. So, that narrows it down to maybe just a couple of hundred transactions a day. But the larger numbers pop out. And so, $10 million...

                                    Oh, so I call IR. They finally called me back the third time. And I said, "Let me ask you a question. Was that really his – did he actually write a check for $10 million? Or was that a grant?" And  they go, "Well, it's both. He had a grant for $10 million and he bought $10 million worth of stock." And I go, "Wow. That's really impressive."

Dan Ferris:                 That is.

Joseph Boskovich:      I rarely see that, that a new CEO would write a check for $10 million. That's pretty strong conviction. And then I start looking deeper into it and I see the move from New York to St. Louis. I just saw – so, I'm getting the idea that this just might be a real no-nonsense individual that really is going to make a turnaround here.

                                    And – but if you look at the – it's – I want to say it's trading at 10 times earnings with a three and a half percent dividend yield and – but when I said it's been mismanaged for years, and it has been,  and so he – cutting expenses, just cut, cut, cut, cut, cut, selling nonprofitable operations, cutting overhead, buying some new opportunities, and just – so, he's kind of almost like the conductor of an orchestra, a great CEO doing these things. And of course, I think one of the most important jobs of a CEO is how to allocate capital. And now I'm not going to – I'm going to give Will Thorndike some credit for this. Will Thorndike wrote a book called The Outsiders, and the greatest corporate CEOs of the last century. And – but he says, and I believe this, the CEO only has five choices on how to allocate capital. And I haven't come up with No. 6. You can reinvest in the company and grow it organically. You can buy other companies and grow through acquisition. You can pay down debt. You can pay a dividend. Or you can buy back your own stock. Or some combination of those.

                                    But companies are notoriously bad for buying back their own stock. Companies are buying back their own stock hand over fist today. They were buying back their own stock hand over fist in 1998 and 1999 and in 2004 and 2005 and 2006.

Dan Ferris:                 No regard for fundamental value whatsoever.

Joseph Boskovich:      Stock repurchases by companies completely dried up in 2001 and 2000 and 2002 and 2003. Completely dried up in 2008 and 2009. And isn't it ironic? Wouldn't you think that a corporate CEO that's engineering stock buyback plans would want to buy back their stock when it was hugely selling off and cheap and the market was horrible?

Dan Ferris:                 You'd think.

Joseph Boskovich:      And wouldn't you think they have their hands in their pocket right now? And it's just the opposite, unless you're a huge shareholder of the company yourself and you're running the company.

                                    And so, when a new idea comes before me, the first thing I do is look at the proxy. And the proxy is going to show me the level of ownership of management and it's going to show me compensation and how they compensate themselves. And so, I'd love seeing companies where there's very, very high ownership and very modest compensation because when the CEO is a big owner of the company and doesn't pay himself very much – Warren Buffett pays himself $100,000 a year, and that's all he's ever paid himself. And so, basically when you invest in that company, your interests are aligned with the people running the company, versus most companies where there's just a giant compensation package and they're going to – that CEO's going to knock down $25 million, $30 million a year no matter what. And I really don't have much interest in that.

Dan Ferris:                 Right. And the stock repurchase plan becomes part of the compensation because they're compensated with stock. They try to support the shares or whatever. And so, it's – the incentive is a little twisted.

Joseph Boskovich:      Well, and that's a whole other issue is [generally accepted accounting principles ("GAAP")] accounting versus adjusted earnings. And of course, today all companies report adjusted earnings. Nobody gives a damn about GAAP earnings anymore. And – which is really a crime because one of the biggest differences between GAAP earnings and adjusted earnings are backing out stock-based compensation. And your viewers may not know that, but that's the single biggest – and I would just challenge you when you're looking at a company, compare that GAAP earnings versus adjusted earnings. And all the these technology companies – Meta – paying these hundred-million-dollar bonuses for these new AI superstars. It's all adjusted out of earnings. It's all backed out. And so, I think it's very, very important to look at GAAP earnings.

Dan Ferris:                 Yep. And the – again, the share repurchase turns it into a backdoor cash bonus. Right?

Joseph Boskovich:      Correct.

Dan Ferris:                 It's just a different way of getting in the cash.

Joseph Boskovich:      Correct.

Dan Ferris:                 Yeah. So, Bunge, that sounds like a neat one. Actually, right now, headline P/E ratio just on, what is it, Yahoo Finance, it was, like, 8. It's going to have the dividend yield.

Joseph Boskovich:      Right. With a giant dividend yield. Now, would you rather buy that or Nvidia today? I would rather – I'm a value guy. I would rather own Bunge.

Dan Ferris:                 Absolutely. I've been writing a newsletter called Extreme Value since 2002. So, yeah, we're –

Joseph Boskovich:      So, Bunge would qualify.

Dan Ferris:                 Yeah. Yeah, you just put it on our radar screen. I'm going to shoot it to my partner in crime and see what he thinks.

Joseph Boskovich:      Great.

Dan Ferris:                 Yeah.

Joseph Boskovich:      And once again, management is huge. And Greg Heckman is doing a wonderful job of turning the company around.

Dan Ferris:                 OK. So, you – so, Bunge is a current idea.

Joseph Boskovich:      Oh, yeah.

Dan Ferris:                 Yeah. And you mentioned Boeing as well. Is that current or past or –?

Joseph Boskovich:      We have a small position in it. It – the airline business is just – it's so scary to me. And I know it's there. It's an essential part of life. I just – boy, so many things can go wrong. But we do have a small position in Boeing.

Dan Ferris:                 So, bringing Boeing up actually doesn't make me want to talk about Boeing for reasons of internal conversations and things that I've had over the past year or so. It makes me want to ask you if you have an opinion about Disney because of what has happened at that company, with the output of their products has become a strange, different thing than what it used to be.

Joseph Boskovich:      Right. Right. Yeah. We don't own it. And I've never owned it. I think the whole – that whole content business is so difficult and so fast-changing with streaming and the competition. I've been watching this Paramount/Skydance thing, which is a bit intriguing to me because I think that this – David Ellison is – like his dad is brilliant. But I think it's just a tough business. It's a tough place to play. It really is. And of course, Disney – the theme parks and everything else. And it's a great franchise. It's a wonderful American company. But really, I don't – it's not an area that we that we like to play in, the whole content business.

Dan Ferris:                 I see. OK. Our conversations that I've referred to internally have focused on is the brand permanently damaged by the "woke," what you might call the "wokeness" of the content? Have they really forgotten how to make movies, one person – is the way one guy put it.

Joseph Boskovich:      Yeah, no, yeah, I get that. I get that. At the same time, I'm watching my two-year-old granddaughter watching Mickey and Minnie and she's just completely delightful. It's kind of funny. Her first – she used to love this show, Ms. Rachel. Have you ever seen Ms. Rachel?

Dan Ferris:                 I have. I know Ms. Rachel well. I have two grandsons who watch it. Yeah.

Joseph Boskovich:      And so, which I – it's funny, I used to turn my nose up at parents in restaurants that have the kids on iPads. And I – but then I have this little 2-year-old granddaughter that's very rambunctious and hard to keep in her seat until you pull up Ms. Rachel and then she's glued to her seat. But she's now graduated from Ms. Rachel to Mickey and Minnie. And so, I'm sitting there saying isn't that – it's just such a wonderful, wonderful franchise, my God. But, yeah it's all good.

                                    But, yeah, no, I think that, yeah, and I think they have management. Bob Iger had to come back, and so that was all kind of botched, and they still have no heir apparent. They have no replacement. He is no spring chicken, been at it for a long time. So, anyway, there's a lot to like about Disney but I have no stake in it.

Dan Ferris:                 Which speaks for itself, does it not? Yes.

Joseph Boskovich:      Sure. Right.

Dan Ferris:                 OK. So, when you say – when you said deep value, as you – as we sort of realize, my mind went to a certain place and it went to – when I think deep, I automatically think distressed. But Bunge isn't what you would call distressed. It's a good business that's suffered from bad management for a number of years.

Joseph Boskovich:      And it's also in an industry that's kind of known for low margins and –

Dan Ferris:                 Right. Commodity industry.

Joseph Boskovich:      – intense competition. But it doesn't need to be that way. You just need the right person to figure out – get rid of the bad assets. Let's get involved in good things. And you have a world of 7 billion or 8 billion people that need to eat, for God's sake. There has to be a way to make money in that. And so, yeah, yeah. So, I kind of – it's out of favor, which makes me like it.

                                    I think deep value, you can have deep value. You can have extreme quality. So – and then, you mentioned, you just briefly said commodities a second ago. And so, in terms of deep value, and we have really found amazing, amazing value in the commodity area. And maybe it's my ag background, but a lot of money managers shy from anything to do with commodities.

Dan Ferris:                 Yes.

Joseph Boskovich:      And I understand why, because it's hard enough to get the company right, let alone to get the price of the commodity right. So, it's doubly tough. And on the other hand, boy, if you look at the commodity sector of the S&P, it has never been lower. And – never been lower than today, which excites me because I believe in an ultimate reversion to the mean. And I think that – I think the market eventually comes down, commodities eventually become a bigger part of the market like they have been historically.

                                    But where we have found just extreme value is in the metals and mining area. And we have right now, which is kind of crazy, but we have half of our portfolio is in metals and mining companies, which is just like – where I think the S&P is, like, 2% metals and mining and we're 50% metals and mining.

Dan Ferris:                 There you go.

Joseph Boskovich:      Right? But I've learned one thing. The way you make – you really can't make money in this business by thinking and being like everybody else. You don't want to be different just to be different. But I think where you make money is by having your own thoughts and ideas and basically not going – the penguins all go over the cliff together. And again and again. It's been a while. The penguins haven't gone over the cliff for about 15 years, but they will eventually. They always do.

Dan Ferris:                 They always do.

Joseph Boskovich:      Yeah. But no, we have found extreme value in the metals and mining sector. My partner, Brian Laks, has really driven our move in this area. When I first met Brian – we first met about 10 years ago before he came to work for us, and the person who introduced us said, "You guys need to meet each other because you both like gold." And I said, "Well, I'd like to meet this guy." And that's how we first met. And we liked gold 10 years ago. We've finally been proven correct. It's taken a while. But I think that – and then we'll go back to that. But how do you own gold? Well, today, it's all about ETFs. Today, it's all about index funds. And so, nobody buys stocks anymore. Everything's indexed. Everything is passive. And if you're going to own gold, you're probably going to own GLD or GDX. No one picks stocks anymore.

                                    And – but I believe that that's another contrarian streak, would be that I think stock picking, it's probably not a better time in history to be a stock picker because the market has never been more expensive than it is today in history. And it's more expensive today than 1929. It's more expensive today than 1999. It's more expensive today than 2007.

Dan Ferris:                 And more concentrated.

Joseph Boskovich:      Well, yeah, and this whole move to passive investing and ETFs and index funds, why pay someone like me a fee when you can buy the S&P 500 for 4 basis points from Vanguard? And so – and make 15% a year. And so, that's the thinking. And that's – everybody's drinking the Kool-Aid. And everybody thinks that until lo and behold, the penguins all go over the cliff together.

                                    And so – but metals and mining, we went from gold – but then Brian's first idea he brought to our team was – now, this is eight years ago. Eight years ago. And he had the idea to invest in nuclear energy and uranium miners. Nobody but nobody was investing in uranium miners eight years ago. The only mention of nuclear energy eight years ago was Chernobyl, Fukushima. Nothing good. And isn't it amazing eight years later how everybody loves nuclear today?

Dan Ferris:                 Joe, do you know Rick Rule?

Joseph Boskovich:      I don't – not personally, but I know who he is.

Dan Ferris:                 Yeah. Good friend. Known him for decades. He's in the same boat with you guys. He was onto uranium long before anybody else. When everybody else was afraid of Chernobyl and Fukushima, he was talking about it, too. We've had him on the show a few times.

Joseph Boskovich:      Well,  yeah, I don't know – very few people liked it eight years ago.

Dan Ferris:                 Well, it was the two of you.

Joseph Boskovich:      There you go. There you go. OK. And – but we were buying Cameco at $7 a share and it's $7 a share today.

Dan Ferris:                 There you go.

Joseph Boskovich:      And so, anyway, but then we – that was eight years ago. We've taken a lot of profits but we've really parlayed it into other – now, first of all, I say metals and mining. So, we only invest in companies, and no ETFs and no commodities. Just companies, but companies producing these commodities. But really, we love copper today. We love tin, silver, uranium, but really metals that are tied to the electrification of the globe. And everybody wants to own Nvidia. Everybody loves the fact that Microsoft's building these data centers, but really nobody's stopping to ask where are you going to get the copper to do all this? And Microsoft recently built a new data center near Chicago. It wasn't that big of a one either. And they needed – they put 4 million pounds of copper into this one data center. And it's just – that just blew my mind when I read that. And I just go "Gee whiz."

                                    And then, you – Richard Adkerson, who runs Freeport – who ran Freeport-McMoRan, he retired, but he said that basically if they find a copper deposit today, anywhere between 15 and 20 years to begin production. It takes a long time to build a copper mine. And so, in our opinion, I think the move is irreversible, the electrification, and – but I don't think that supply is going to be able to keep up with demand, which will equal higher prices. And the same thing goes for uranium. The same thing goes for silver. Silver historically a precious metal, gold's stepbrother. But today half of all silver is used industrially and is highly conductive and used in solar panels and all types of electrification. And of course tin. And tin, few people know what tin is used for – tin roof, tin can. No, it's used for solder and electronics. In every piece of electronics in the world, tin is used for solder. And anyway, so that's where we're finding extreme value today.

Dan Ferris:                 Yeah, I love the uranium story. I love copper to death. I don't know if you know Robert Friedland. Probably –

Joseph Boskovich:      Yeah.

Dan Ferris:                 Yeah, he's got this thing he said a couple years ago, I don't know if he originated it or if he got it from somebody else, where he says basically we need eight Escondida mines in the next 10 or 15 years or something. And they don't – Escondida is the biggest copper mine in the world, in Chile. And they don't exist. They presently – those eight deposits don't currently exist. He's got one of them. And then where are the other seven?

Joseph Boskovich:      But here's the other thing about mining, is a lot of these mines are in areas that – so, Friedland's biggest mine, his biggest mine is in the Congo.

Dan Ferris:                 Yeah. That's right.

Joseph Boskovich:      And so, he's brilliant. Amazing. But a challenging thing – so, when you pick a company to invest in, you really need to know where the assets are. You need to know how safe they are. Barrick had a big gold mine in Mali that was, I think, 10% of their production, and the government just took it. Just took it. And so, you really need to know. There's that massive, massive copper deposit east of Phoenix that Rio Tinto and BHP are trying to codevelop, but it's an Indian burial ground. So, there's just – mining is really a difficult – but what I love about it is they're producing products that the world doesn't turn without these products. And so – but what I like about it, it's just not a crowded field.

                                    And so, where we – our edge is in picking the best companies run by the best people with the best assets. And so, that's why if you like gold and you want to own GDX, which is the – all the big gold miners, you're going to get Barrick, you're going to get Newmont, neither of which I want to own. And so, that's where it comes down to stock selection and going back to my earlier comments, to people that run these companies. How much stock do they own in the company? John McCluskey, who founded Alamos, is the biggest shareholder of the company. The guys at Newmont own very little stock in the company. And so, anyway, that's just our methodology.

Dan Ferris:                 Yeah, and in mining in particular, which I've covered a bit over the years, there are several ways into it. Producers, royalties, exploration and development, and then what I would call pure exploration and prospect generation, that kind of a thing. And in the case of Sprott Inc., which is one of my big picks of the last several years, finance. So, it's an interesting space.

Joseph Boskovich:      No, it is. The royalty stream – Pierre Lassonde, Franco-Nevada, I mean, it doesn't get any better than that.

Dan Ferris:                 Yeah, the people.

Joseph Boskovich:      Yeah, yeah, no, exactly. Exactly. Exactly. But our preference is really is are the mining companies run by great owner-operators.

Dan Ferris:                 OK. Oh, so do you own any royalties – royalty companies?

Joseph Boskovich:      No. We do not.

Dan Ferris:                 None at all. So, you're focused on the producers. That's interesting.

Joseph Boskovich:      Correct.

Dan Ferris:                 I'm curious to know who is a great owner-operator. Let's talk.

Joseph Boskovich:      John McCluskey at Alamos.

Dan Ferris:                 Alamos. Good one.

Joseph Boskovich:      Yeah. Yeah.

Dan Ferris:                 What do you like about him?

Joseph Boskovich:      The symbol is AGI. He founded the company. He's a huge shareholder. He's run the company for 22 years. The company has no debt, sitting on a lot of cash, and they have great, great assets. The mines are mostly all in North America, Canada, Mexico. And he – it's his company. And he runs it very shareholder-friendly.

Dan Ferris:                 Great.

Joseph Boskovich:      Agnico is another one. Agnico, which has really done so, so well. But Sean Boyd ran the company for years and just did a wonderful, wonderful job. Once again, safe assets in safe locations. Oh, and the other thing is grade. Grade. Alamos, their mines are very, very high grade. And the higher the grade, the lower the cost. And so, all these things go into the mix. And so – yeah.

Dan Ferris:                 Cool. Well, we're on the same page there. The – if any industry – I'm sure you – I bet you'd agree with this. If any industry will teach you how important the people are, it is mining and metals, more than any other, because some of the people in that industry are outright criminals. And then, when you find these high-quality people, you wonder how they got there almost because they're kind of few and far between.

Joseph Boskovich:      Did you ever hear Mark Twain's definition of a gold miner?

Dan Ferris:                 Oh, yeah. Yeah. Tell our listeners. I know it well.

Joseph Boskovich:      "A liar standing next to a hole in the ground."

Dan Ferris:                 Yeah, that's right. That's a joke. But the fact that it is so accurate so much of the time is really – you almost have to see it to believe it. But wow. Some of these guys, the things they are doing, it's just –

Joseph Boskovich:      And Mark Bristow at Barrick is, I think, maybe one of the greatest mining executives in the world. The problem with them is that they just, like I said, they had their mine in Mali confiscated. They're in some pretty tough neighborhoods. Their big new mine that they're bringing on is in Pakistan. So, I just – man, do you want Pakistan or do you want Ontario? And – so, anyway, it all – it's all in the baking.

Dan Ferris:                 It is. And that's another thing. We're pointing out another thing. Let's just kind of name it. To get scale – and there's no such thing as a really great small mine. To get scale, you need to be in all these weird – you need to be all over the world if you're not in, say, Canada or Mexico.

Joseph Boskovich:      Well, I don't know about that. If you look at Agnico, they're in Canada, they're in Australia, they're in Finland and Mexico. So, that's a pretty good stable right there.

Dan Ferris:                 Yeah, I didn't mean to suggest you need to be in bad countries. You do need to – you need to be in several countries probably.

Joseph Boskovich:      Yeah, yeah, yeah. No, and they all are. They all are. Yeah, right.

Dan Ferris:                 So, that –

Joseph Boskovich:      The big ones are.

Dan Ferris:                 Yeah, you've got to be careful. The one mining jurisdiction that I learned of from the folks at Aya Gold & Silver is – that I never knew about until the last few years – was Morocco is apparently a pretty good mining jurisdiction.

Joseph Boskovich:      I didn't know that.

Dan Ferris:                 Yeah, Aya Gold & Silver is there and the government's really friendly to them. And there's not a – they don't have a lot of competition there right now, so it's kind of cool, too.

Joseph Boskovich:      OK.

Dan Ferris:                 The stock has moved quite a bit, but of course the CEO, Benoit, he insists that it's still cheap.

Joseph Boskovich:      Sure. But – so, I didn't want it to be all about metals and mining.

Dan Ferris:                 OK, sure.

Joseph Boskovich:      And by the way – and if you did want to talk all about metals and mining, you need to have back my partner, Brian Laks.

Dan Ferris:                 I was thinking that. Yeah.

Joseph Boskovich:      Yeah, no, and Brian, really, he's – I'm more of a – I'm a – we're both generalists, but he's really engineered our move into that area. We weren't always 50% metals and mining. In fact, I think six, seven years ago, we were probably maybe less than 20% commodities and that was mostly gold. So, he's really engineered our move into – but yeah, we honestly, we just own a collection of – the nonmetals and mining, the other half the portfolio, just a collection of just – like Bunge, just fantastic companies that we're – that we really – that we're very high on.

Dan Ferris:                 OK, well, let's lean away from metals and mining because – and we'll – we would like to have him on. As soon as you mentioned him, I thought, "Well, we need to get him on here." He's half your portfolio.

Joseph Boskovich:      Yeah.

Dan Ferris:                 So, let's do that. But let's lean – let's – for the rest of this thing let's lean into your strengths. Bunge sounds like a great idea. What – is there another one that you feel like talking about?

Joseph Boskovich:      Oh, gosh, I love talking about all of them. And that's one thing –

Dan Ferris:                 Awesome.

Joseph Boskovich:      That's one thing that kind of differentiates us from a lot of other people, is that most people really now in the day of index investing and ETFs, is stock picking is a bit of a lost art. But yeah, we have a new one in the portfolio: Builders FirstSource.

Dan Ferris:                 Oh, we just wrote that company up in my newsletter. That's cool.

Joseph Boskovich:      Did you? Yeah, the symbol BLDR, Builders FirstSource. Once again, in monitoring insider activity, going through my Form 4s every morning, and the chairman of the board is Paul Levy, and he made an open market purchase of stock. He wrote a check for $55 million. He bought at $111 a share, and you see that – it's like the stock was down from $200 and – $200-plus. But I like it. It's really an interesting company. It was originally – it was the lumber supply arm of Pulte in the very beginning. It was spun off from Pulte. And so, in building supplies Home Depot really caters to the do-it-yourself customer and Builders FirstSource really caters to the professional builders and contractors. And they're the largest in the country at that. And the other thing kind of interesting about the company is that now, especially now – I mean, it's interesting, I built a house in California a couple of years ago and it was – the tradesmen were almost 100% Latino. A hundred – almost 100%, from demolition of the old house to finish carpentry of the new house, almost 100 percent Latino workforce.

Dan Ferris:                 I live in Oregon, so I know what you're –

Joseph Boskovich:      Well, and thank God for these people. I don't know how they do it. And my point is with this immigration move that we have, it's really put a squeeze on the workforce. And Builders FirstSource, one thing they specialize in are prefabricated window systems, prefabricated door systems, and wall systems to take labor out of it and – which I think really plays into the hands of tight labor conditions and cost savings for the builder and the framing contractor. And so, just one little caveat. But a very profitable company. A fortress balance sheet. And I think last time I looked at it almost 9% free cash flow yield. And so, yeah, no, they have 600 distribution centers around in 43 states. And they – yeah, no, it's a – there's a lot to like.

Dan Ferris:                 And you mentioned – what did you mention, Home Depot or something? These are guys that are like the one-stop shop for the professional. They're the Home Depot for the professional.

Joseph Boskovich:      Well, the – Home depot caters to the do-it-yourself and Builders FirstSource caters to the contractor.

Dan Ferris:                 Yeah.

Joseph Boskovich:      Right.

Dan Ferris:                 And it's – a lot of the revenue is for single family, which is kind of nice, given that that's where the sort of – that's where the big issue is right now, I think, is there's just not enough –

Joseph Boskovich:      Well, actually, I would say not really. There's – imagine the multi-family. If you're building apartment buildings, you have to go to these guys.

Dan Ferris:                 True. True enough.

Joseph Boskovich:      So, they actually – yeah, no, they actually have all of it. So...

Dan Ferris:                 Yeah, a really cool business. And again, if you described it to me real quick, I'd say, "Well, that's – isn't that a commodity industry?" Well...

Joseph Boskovich:      Yeah, no. Right. Right. Well, I think the other thing I like about it, the contrarian part of it is home building is not in a good spot right now. I think these stubbornly high mortgage rates have really throttled – and then the other thing would be people aren't moving because if you have a 2.5% mortgage rate, you're not going to leave that house. And so, that's a bit of – but the issue, the bullish side of it is household formations continue to develop and so I think you have a growing – you have a groundswell of demand that's building. And so, I think it's very, very healthy.

                                    People complain about interest rates. It's funny, the 10-year, what's the 10-year now, 4.3%?

Dan Ferris:                 I know.

Joseph Boskovich:      No, no, no. But I'm saying it seems high because it was 2.5% a few years ago. But if you look at what is the average 10-year Treasury going back 100 years, I think it's 4.5%. I think it's right about here. So, rates are higher than they are, but they're not historically high. They're historically right in the mean.

Dan Ferris:                 Right. I think the bank rate 30-year fixed national average is in the sixes now, which I remember when I was younger, I remember people rejoicing "Oh, mortgages are below 10% now." So, it is all relative, isn't it? You need an appreciation for history to really get this and to get where we are with rates. But I agree that there – we cited household formation when we wrote this thing. And the demand sort of – the demand is there. And if you get any movement – and we're starting to get movement on inventories. If you get movement on inventories, you're going to get movement on price and you're going to get movement on demand. And you need building. The inventory isn't going to fulfill however you look at it. You need the building. New homes need to be built. Period.

Joseph Boskovich:      Correct.

Dan Ferris:                 We didn't do it. We had a crisis. We're still recovering from 2006.

Joseph Boskovich:      Yeah. But my hunch is that you're going to see a very robust construction business the next five years, is my hunch.

Dan Ferris:                 What do you base that on? Just the – what we've talked about, the household formation –?

Joseph Boskovich:      Household formation and pent up demand. Yeah.

Dan Ferris:                 OK. Right. We definitely agree. We're on the same page there. Well, we're value guys. All the value guys eventually wind up on the same page.

Joseph Boskovich:      Right.

Dan Ferris:                 All right. We are actually at the point where we like to ask our final question, Joe, and it's the same for every guest, no matter what the topic. And it's the same identical question. Sometimes we have nonfinancial guests and we ask them this same identical question. And it's for our listeners benefit. If you could leave our listener with a single takeaway, a single thought today, what would you like that to be?

Joseph Boskovich:      I think it would be – I think the emphasis on the people that run these companies. And I think that when you analyze a company, I think you really need to zero in on the people that run the company and you study them and where they've been, what are they doing? How much stock do they own in the company? How much do they pay themselves? And that's right there in the proxy for anybody to see. And I think you want to really invest alongside – you want to partner with a great owner-operator. There's these activist investors that want to come in and change things. And we are just the opposite of that. We want to partner with a great management team and hold that company for the long run.

                                    I hate to quote Buffett, but everybody does. What's the ideal holding time for an investment? He goes "Forever." And probably the biggest mistakes I've made in my career are selling things too soon. And I can give you a long list of companies that I bought it, I owned it, I made great money, I'm long term on it, I thought "Well, I can –" and why did I sell Costco? Why did I sell Cintas? Why did I sell Microsoft? Just company after company after company that I – where I had it right. I had it right and I sold too soon. And so, I love the idea of buying something and holding it for a very long time.

Dan Ferris:                 Amen to all that, Joe. And thanks very much not just for a great final question, but thanks for being here. I appreciate it. I thought it was – I learned a lot from you. And I know our listeners did, too.

Joseph Boskovich:      That was a really fast hour, I'll tell you.

Dan Ferris:                 I know it is. It's quick. We don't even necessarily go a whole hour. We just wing it. But we certainly will be inviting you back, sir.

Joseph Boskovich:      Great. I really appreciate the opportunity. I had a lot of fun.

Dan Ferris:                 And we need to get your partner on here too.

Joseph Boskovich:      He'd love to do it.

Dan Ferris:                 OK, great. All right. Thanks, Joe.

Joseph Boskovich:      Thank you. Yeah. Bye.

Dan Ferris:                 Well, of course I always enjoy talking to another value investor. We get lots of value guys on here and I find myself just copacetic with every single one of them of course. But again, talking with Joe shows you how different they can all be because what did he say? We didn't talk about cash. He mentioned cash flows and balance sheets and things briefly, but what did he talk about? Proxy statements, knowing the people, looking at Form 4s, the insider trading forms. We don't always get that. We don't always get people talking about that.

                                    And it makes sense to me, of course, that they own – that 50 percent of their portfolio is in metals and mining using that approach of finding the very best people, because I'm telling you, in metals and mining, the very best people stand up head and shoulders above everyone else. They're easier to find, frankly, in my view, because they contrast so sharply with the freaking criminals who run the rest of the industry. And I'm not saying everybody in the industry is criminals. Some people are perfectly competent, but they're not the greatest. You know what I'm saying? And then as you get down the quality trailer, just literally thousands of companies run by people that you would not want anything to do with.

                                    So, finding people is really important. It doesn't surprise me at all that Joe, with Joe's agricultural background and with the emphasis on people that he's in Boeing and Bunge and the stocks that he described because people are very obviously from the top down making a big difference at those companies. So, yeah, it makes a lot of sense to me. It sounds like a really good approach. Quality companies run by great people, and they've experienced some troubles so the stock is cheap and there's an opportunity there.

                                    And that alone is just a great investment. And you heard Joe's takeaway. He wanted you to go away with that very idea that people are important and you should get to know them. And I completely agree, especially in these types of situations, like a value situation where things haven't been great, or metals and mining in particular. Lots of great lessons and just a fun conversation. Joe obviously – he knows a lot and he loves to talk about his picks, which is great because, as you know, not everybody does. I have to kind of pry a pick out of some people and some people say, "Well, I don't want to talk about current ideas," which is cool. It's fine. I get it. But it's great to find a guy like Joe who will basically talk about any stock that he owns.

                                    So, yeah, lots of fun. That was a fun interview and a fun episode and I hope you enjoyed it as much as we really, truly did. We do provide a transcript for every episode. Just go to www.investorhour.com, click on the episode you want, scroll all the way down, click on the word "Transcript" and enjoy. If you liked this episode and know anybody else who might like it, tell them to check it out on their podcast app or at investorhour.com, please. And also do me a favor, subscribe to the show on iTunes, Google Play, or wherever you listen to podcasts. And while you're there, help us grow with a rate and a review. Follow us on Facebook and Instagram. Our handle is @InvestorHour. On Twitter, our handle is @Investor_Hour. Have a guest you want us to interview? Drop us a note at feedback@investorhour.com or call our listener feedback line, 800-381-2357. Tell us what's on your mind and hear your voice on the show. For my co-host, Corey McLaughlin, until next week, I'm Dan Ferris. Thanks for listening.

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