This Guy Shows You CAN Make Money in Resource Stocks

Iron ore mining

It has been a bad time to be a stock investor, right?

The S&P/ASX 200 index is down 4.28% over the past year.

It’s down 2.11% over the past two years.

And it’s up a measly 8.3% over the past three years (that’s an average annual gain of just 2.7%).

Boy, who’d invest in stocks?

Even this year, year-to-date, the big Aussie index is only up 1.96%.

Given the risk of owning stocks, it hardly seems worth the effort. It is odd then, that one of our investment advisories is having the best start to a year that it’s had in memory.

You won’t believe which service we’re talking about. Your editor didn’t…until we saw the numbers…

While the main blue-chip index has posted some pretty ordinary returns in recent years, another index has posted even worse returns.

The S&P 300 Metals and Mining index has posted these returns for the following periods:

1 Year +2.68%
2 Years -20.68%
3 Years -11.12%
4 Years -17.02%
5 Years -46.29%

As bad goes…that’s bad. But what about the year-to-date number? Blue-chips are up nearly 2% year-to-date. This index couldn’t have done much better than that, surely.

You think? Check this out…

‘Hated’ stocks the best stocks this year

Year-to-date, this hated index, that no investor has wanted to touch for five years, has beaten the blue-chip index by more than 18-to-one.

This chart shows it. It’s the S&P/ASX 300 Metals and Mining index, and it’s up 36.33% since the start of the year.

See for yourself:

Source: Bloomberg
[Click to enlarge]

It’s an incredible turnaround. And the best days may not be behind us.

Remember, even after this 36% gain in six months, the index is still down 51% from the 2011 peak.

It’s incredible how often this happens in the markets. Investors hate an asset class for years. Then, suddenly, without much (if any) warning, the darn thing just takes off.

For many, the move has come too quickly for them to get on board.

But not for our current star analyst and resources addict, Jason Stevenson. We’ve just checked his current open recommendations.

As you’d expect from the resources sector, they’re not all winners. It has been a brutal five years for resources stocks. But check out these performers:

  • Emerging energy stock: Up 169%
  • Strategic energy stock: Up 41.9%
  • Gold and nickel stock: Up 71.4%
  • Copper, gold, and nickel stock: Up 47.4%
  • Gold stock: Up 43.2%

And those are open plays.

In our view, the best in the business

If you follow Jason’s research in Resource Speculator, you’ll know he’s dished out a bunch of sell recommendations in recent months too.

In May, Jason told his subscribers to take a 64.3% gain on Beach Energy Ltd [ASX:BPT].

In February, Jason closed out another energy winner for a 242% gain. That was on 88 Energy Ltd [ASX:88E].

As we say, not all Jason’s picks are winners. The guy is a resources addict, but he’s a ruthless addict. If a pick doesn’t look like getting the payback he predicted, he’ll tell you to get out right away.

That could be with a small profit or loss, or even within weeks of making a recommendation.

In our view, that’s a smart strategy. It’s an especially smart strategy in this volatile and high-risk market.

Most investors have hated resources stocks for the past five years. Heck, even after this cracking start to the year, most investors still hate resources stocks.

But Jason is a contrarian. He doesn’t give a hoot what other investors or analysts think. If he figures now is the time to buy, he’ll tell you.

And, unlike most advisors out there, if he thinks now is the time to sell, he’ll tell you that too. But right now he has a bunch of resources stocks on his buy list which he has earmarked for multi-digit percentage gains.

Check out his research. Go here. In our view, you won’t find a better or more honest resources analyst anywhere in the Aussie market.

For details, go here.


Kris Sayce,

Publisher, The Daily Reckoning

Kris Sayce
Kris Sayce, dubbed the ‘Jeremy Clarkson of Australian finance’, began as a London finance broker specialising in small-cap stock analysis on London’s Alternative Investment Market (AIM). Kris then spent several years at one of Australia's leading wealth management firms. A fully accredited advisor in shares, options, warrants and foreign-exchange investments, Kris was instrumental in helping to establish the Australian version of the Daily Reckoning e-newsletter in 2005. He is currently the Publisher, Investment Director and Editor in Chief of Australia's most outspoken financial news service — Money Morning.

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