Eric Sprott: Life Learned Lessons in Resources

Eric states that there is always the cost of production with commodity investments. If a company increases output by twenty percent, there is always that overhead cost. 

However, if the price of a commodity rises by twenty percent that could represent a doubling of profits. Therefore commodity price has a much more significant impact on profitability than merely increasing production. 

As an investor, you want to know what a company will earn so you can determine what your returns are likely to be. If you are too conservative, you may not even make the trade.

- Source, Palisade Radio