With elections in Canada and the United States in the near future, it is conceivable, although admittedly unlikely, that one or two candidates may refrain from clever sound-bites and actually address the fundamentals. In the meantime, all you can do is count your savings, judiciously hold/sell falling stocks, curtail your expenditure, work a little harder, renew old job contacts, and buy a dictionary from which the F word has been cut.

The questions that concern us in this piece is should you hold onto falling mining stocks, or buy more cheaper stocks, or merely tear the page from your dictionary on which is printed the F word. In case you forgot, my F word is permissible in polite company. Read on to see what I mean.

McCain says the US economy is “fundamentally sound.” Joe Biden says he could walk all the way to Lansing without meeting anyone who agrees. McCain expanded on his conclusions by explaining he meant that the American worker is still fundamentally sound. As if we needed a presidential candidate to tell us the obvious. Then McCain recommended a 9-11 type commission to decide why a fundamentally sound economy is seemingly unsound. If that is how you characterize the demise of companies he says were run by greedy people. Obama replied that McCain’s commission proposal is the oldest political trick in the book, namely appoint a commission and blame the outcome on them. Obama called for leadership to solve the problem.

To an investor the only metric for a term as nebulous as “fundamentally sound” is profit. By that definition, we can conclude that indeed the mining industry has been fundamentally sound for a long while. But some of the soundness has undoubtedly tarnished in recent days and weeks.

I am watching the news for signs that some of those old and marginal mines, opened but recently in a flush of enthusiasm, might now close. Two examples suffice to highlight what I fear. ButGoldcorp is not mining the Pamour open pit. Idaho’s Sunshine Mine ceases production yet again. (And ICMM has just published their Mine Closure toolkit.)

As a matter of conviction and hard knocks, I never believe any pundit who predicts that the price of anything is going to go up. So I simply ignore the talking heads that are still predicting that gold, silver, and nickel must go up. On the radio (CBC) yesterday morning was one such prediction. Followed a few minutes later by the qualification that the rise in prices might not occur until 2009 or 2010. By which stage we will all be agog over the winter Olympics and so likely to forget late 2008 summer predictions regardless of whether they were right or wrong.

Of course I know that the price of mined goods will go up as will the shares. The price always has gone up again in the past after a period of going down. The problem is just how long I might have to wait. Some of the hot mines I designed for in the mid 1980s still have not opened. My advice is to be prepared to wait as long again. It might just happen thus.

If only I had the patience of a young friend who is smiling all day long as house prices continue to plummet. He is convinced house prices will still go down still more. He is happy and prepared to continue to rent, save, and see the price of his target house go down. Then he will buy, smiling all the way to the bank. Maybe there is a lesson there for the mining investor.

The pundits tell us that demand from China will, this time around, push up mined products’ prices. If you believe this, you need to sink your spare cash into the shares of those large, fundamentally sound, mining companies that have long-term contracts with the Chinese to supply iron and anything else stored in an unlicensed tailings impoundment. Or maybe buy shares of companies likely to be taken over by the big sellers to China.

To pull out of the great depression, America built useful things like dams and bridges. It is possible that if things get too bad, the politicians will stop sending checks for new barbeques to the average taxpayer, and instead invest in new nuclear power plants, solar energy stations, wind farms, and everything that is or can be stamped GREEN. It takes no great insight to realize this will involve the use of mined products from stone to gravel to copper. Take a look at the companies most likely to profit from a government-sponsored go-green-emergency-economic-package. It might just be your local quarry that yields most profit. My sister is buying Sasol shares like made as they fall.

Keep in mind, that it may be that only America is affected. Canada will have a new, probably stable government, well before the Obama versus McCain slugfest is over. Canadian mining is inherently more attractive, in my opinion, than an investment in a mine in those parts of the United States that political correctness precludes me from naming. It is even possible that Zimbabwe will get a stable government and that mining investments in that basket-case will give profit. At least be ready to move.

My point is that in times like the present, it gets harder to sail to profit in the mining industry. More work than normal is required by investor and miner alike. Maybe a bit more risk is involved too. But the only way to succeed is to ignore the politicians and their silly judgments and counter-punches. Ignore the pundits who predict rising prices at some undetermined time in the future. Seek out fundamentals, sound fundamentals, like good ore bodies, rationally-paid managers, good consultants, stable governments (regardless of how uninformed their politicians), and be prepared to wait a little. Meanwhile go out and buy something that requires lots of mined materials to make.