When is a mania a mania? What are the signs that a boom is about to turn into a bust? Unfortunately, crystal clear answers to these questions are not readily available, or there would still be a bumper crop of dot-com millionaires in the world instead of a meagre bushel.

Gazing back upon our Stock Watch list of a few years ago, made up of the companies we were thinking about buying at some point in the future, there were over 200 enterprises. About 20 percent of these were in the mining sector, and the majority were penny plays. Had we been wiser, a bevy of those Lilliputian beauties would have been bought. Unfortunately, only a handful were scooped.

Here’s a small sampling of firms on the Canadian side of the fence that kindled our interest: Agnico Eagle, Atna Resources, Breakwater Resources, Canadian Zinc, Channel Resources, Claude Resources, Corriente Resources, Etruscan Resources, Farallon, Fortune, Imperial Metals, Inmet Mining, Kinross Gold, Manhattan Minerals, Miramar Mining, Orezone Resources, Queenstake Resources, Queenston Mining, Richmont Mines, South American Gold, TVI Resources and Tiomin Resources, just to name a few.

What do all of the above have in common? Most have, at minimum, quadrupled, and some fit into the ten-bagger category. Is this perhaps a hint of a mania?

Until last year, many of these companies had trouble raising a plug nickel. Now money is being thrown at them as if they’re the last hope. Take Canadian Zinc, for example, an outfit that has traded as low as 9 cents in the past few years and which we almost took a shot at when it was at 15 cents. This company closed a financing in November for about $7 million. More recently, they achieved a bought deal for $6 million.

While their Prairie Creek Mine in the Northwest Territories is certainly intriguing, it was much more fascinating at lower valuations, even though Canadian Zinc now trades around a buck, half of its stratospheric 52-week high of $2.04.

This is not meant to pick on Canadian Zinc. This type of frenzy is being seen throughout the sector.

Bullish folks have some excellent reasons why the rocket might have additional loft: commodities have been a woebegone sector for eons, and based on normal cyclical performance they were due. The US dollar cratered, and since commodities are priced in this currency, they are accordingly priced higher. Plus, demand is robust — from China in particular as well as other developing nations.

We do anticipate that there is some upside left in this sphere; that’s why we have not yet parted with our complete Contra positions in Claude and Corriente and why one of us continues to hold his full allotment of Atna, Kinross and half his original stake in TVI. However, long since gone are the other positions previously held in the commodity patch.

Holding at this level is far different than buying. And while doubles, triples and more on many of these positions is within the realm of possibility, the easy money has been made. Is this another rendition of the tech mania? It would not surprise us.