The Power Of The Trend
The truth is that, no matter how smart we are, we can never know exactly how long a trend will last or how high a market can rise during a bull market.
Trend following is the simple, almost monastic belief that the market itself is the best guide to its own direction. It is less concerned with the why and more focused on the what. The price is rising, or it is falling; stay with the tide for as long as it carries you. Yet beneath that elegant simplicity lies a profound truth: no one actually knows how far a trend can go—or how long it will last.
A couple of recent examples of remarkable trends in the gold mining sector:
Lundin Gold (Weekly)
IAMGOLD (Weekly)
The desire to forecast the end of a trend is deeply human. We want the comfort of certainty, the intellectual satisfaction of saying, “This is the top,” or “The bottom is in.” But the very nature of markets makes such predictions quixotic.
Market-moving information does not arrive in tidy, predictable sequences. Sometimes the key data comes early; sometimes it emerges late. Sometimes the information that accelerates a trend is completely invisible until after the fact. Prices digest information through the collective psychology of participants, and that digestion is not smooth or predictable.
Additionally, in 2025 passive fund flows dominate market behavior. Pension flows, sovereign wealth funds, central banks, ETFs, volatility-targeting funds, and corporate buybacks all introduce slow-moving, price-insensitive capital. These participants can push a trend far beyond what fundamentals alone would dictate.
The Power Of The Trend
In 2025, we have witnessed a multitude of powerfully trending breakout moves across the gold mining sector. Perhaps the most surprising of all of them has been the ~167% year-to-date gain in Barrick Mining (NYSE:B, TSX:ABX):
Barrick Mining (Daily)
Earlier this year, Barrick seemed woefully incapable of delivering a positive surprise to investors. Then, at the end of September, CEO Mark Bristow resigned from the company—hardly the sort of backdrop one might expect to produce nearly a threefold increase in the share price.
Since May, Barrick has appreciated from a US$30 billion market-cap company to roughly US$70 billion today.
Zooming out to a multi-year chart, we can see that Barrick’s 2025 breakout rally comes after years of mediocrity and underperformance.
Barrick Mining (Weekly)
Barrick is a stock that I have highlighted many times throughout the year (here, here, and here). In fact, back in October I built up a significant long position in Barrick (both through common shares and call options) with the thesis that it was only a matter of time before Newmont made a move for Barrick’s U.S. assets. Meanwhile, the Barrick chart underwent a reset in October/November, while remaining in a very bullish overall trend.
I have since taken profits and exited the Barrick trade.
Last week’s powerful price action reminded me that sometimes I should simply try to “be right and sit tight”, and not get too cute with timing the market. Market volatility can oftentimes serve to fool us, causing us to prematurely take profits on trades that could be poised for much larger returns over time.
In fact, it is usually the trades that show us a profit soon after entry that we should hold on to the tightest.
Why Holding A Winner Can Be Hard
Staying with a winning trade is far harder than it sounds. Success breeds discomfort. A long-held winner becomes a temptation—“I’ve made enough,” or “I should lock it in.” Social pressure builds. Analysts issue calls that the move has gone “too far.” Commentators claim the market is “frothy.” These narratives gnaw at discipline.
But trends do not die because someone declares them over. They die when the underlying forces that created them finally exhaust themselves—and that point is unknowable in advance.
Could Barrick reach a US$100 billion market cap?
While history suggests that is an extremely lofty valuation for Barrick—the reality is that using today’s gold price, at US$60/share Barrick shares may only be valued at 12x earnings.
That doesn’t seem outlandish.
My point is that who are we to judge how far a trend can go?
The Only Way to Ride the Wave
Ultimately, trend following is a philosophy of humility.
It demands that we surrender the illusion of foresight, embrace uncertainty, and trust that price contains more information than any individual mind. It teaches that the market does not care about our opinions, only our positioning.
Trends can last longer than expected because markets are not machines—they are ecosystems. They evolve, they overshoot, and they surprise. The investor who attempts to predict the exact endpoint of a trend is playing a game no one has ever mastered.
The reality is the investor who simply follows the trend, with discipline and humility, is playing one of the only games that has ever consistently worked.
DISCLAIMER: The work included in this article is based on current events, technical charts, company news releases, corporate presentations and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. This article is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions. Junior resource companies can easily lose 100% of their value so read company profiles on www.SEDARplus.ca for important risk disclosures. It’s your money and your responsibility.
If investing was easy we’d all be rich and no one would need to work. I don’t think we’re there yet. Until then, we just need to keep working at being better at investing.