But when it came to resources, most analysts made an exception for the resource sector. The argument was that while everything else was floating on a sea of credit, there was a bedrock of Chinese and Indian demand for commodities which underpinned the Aussie resource market and resource share prices.
October 23rd, 2009 | Dan Denning | 7 comments | ContinuedAll Posts Tagged With: "Resources"
Australia Will be Affected By China’s Export Shrinkage
The major economic news released yesterday is at odds with the way the market behaved. We’re talking about the news from China that exports dropped 25.7% in February. Imports were down 24.1%. If China makes and the world takes, China is making less because the world is taking less. And of course, China takes from Australia to make for the rest of the world….
March 12th, 2009 | Dan Denning | 0 comments | Continued
Invest in China’s Geeks and Guts
Trying to make any headway in this market is like trying to move around in a barrel of molasses. Meanwhile, there is a steady drumbeat of bad news in the press. One bit of news that grabbed Chris Mayer was that China officially passed Germany as the third largest economy in the world, behind the U.S. and Japan. Below, he explains why this is an important tidbit for investors to pay attention to. Read on…
January 21st, 2009 | Chris Mayer | 3 comments | Continued
A Worst-Case Commodity Scenario
Mind you, even in such a bearish argument for commodities, you might find an exception in gold producers, although not the explorers. The junior gold explorers are fast, like everyone else, running out of finance. Our forecast? Gold production is going to fall this year at the same time gold prices rise. We’ve focused so much on the demand side for gold as an inflation-hedge that it’s easy to forget gold is a mining business. You have to find it and dig it up. It is hard to increase the mine supply of gold…
January 15th, 2009 | Dan Denning | 7 comments | Continued
The Australian Resource Boom Isn’t Dead Yet
The liquidation of the short-dollar/long-commodity trade raises a simple question: what’s going to lead the market when it turns up next? Typically, the sector that led the last bull market hardly ever leads the next one. There are lots of reasons for this. But the simple one is that conditions for expanding earnings are never as good as they are when things are as good as they’ve ever been (as they tend to be at the height of a boom.) Financials have been pounded harder than resources.
August 19th, 2008 | Dan Denning | 2 comments | Continued
Note to Australia: Buy Resources, Not Banks
It will be important not to zag when you can zig in the coming months. Or zig, when you can zag, if you prefer. But what do we read in the paper today? Investors are being told to do just the opposite of what they ought to be doing! Imagine that. Is it not obvious by now-one year into the credit crisis-that banking is a terrible business when you strip away the fancy suits and big ties? It is subject to massive blowups and failures. For banks to deliver faster earnings growth, they have to take more risks.
August 12th, 2008 | Dan Denning | 4 comments | Continued
Red Bear Rising: Russia’s Resource Based Geopolitical Strategy
Is the Red Bear Rising again? We promised a few extra thoughts on what’s going on in the Caucasus yesterday. Here they are. Investors should take note that Russia’s Grand Geopolitical Strategy is resource based (energy and metals).
August 12th, 2008 | Dan Denning | 3 comments | Continued
Top Resource Prices in 2008: Food, Water, Energy & Metal
Back in 2001, resource prices were the cheapest ever in the history of capitalism and tangibles were not on the radar screen of many investors (they still are not). Fast forward to early 2008, where prices of resources are heading to the heavens, money is starting to pour into the sector and investors are beginning to take notice of the boom. So, where do we go from here? It is my observation that the current bull-market is still in its early days and fundamentals indicate that we have a long way to go.
June 20th, 2008 | Puru Saxena | 3 comments | Continued
China Fueling Inflation in Australia & New Zealand
Did you see the first line of the minutes from the RBA’s June 3rd meeting? In case you missed it, here it is: “The Board’s discussion of the world economy commenced with a briefing on the outlook for Australia’s trading partners.” Why would a meeting on Australian interest rates begin with a discussion of foreign trading partners? Could it be that foreign demand for Aussie resources threatens higher inflation even more than Aussies hitting the shops with a credit card? Hold that thought.
June 19th, 2008 | Dan Denning | 1 comment | Continued
Uranium Shares To Show Gains in Face of $120 Oil
Perhaps the massive blow-up and run-down in uranium shares last year has left your memory. Uranium producers have certainly not been popular of late. There are two uranium companies whose fortunes could be about to change. But to understand why, you should know the full story of uranium. The uranium price from last year reminds us a bit of when Jack tossed those magic beans out the kitchen window. Zip. Pretty soon a massive growth had burst out of nowhere.
May 7th, 2008 | Gabriel Andre | 2 comments | Continued