Elephant in the Room:

From the HRA Journal Issue 260,
November 7, 2016

I’ve always considered politics a little bit crazy.  “Little bit” doesn’t begin to describe the gong show that passes for an election in the US.  The good news is that it will soon be over.  Good riddance.

The gold sector continues to tread water.  Things look a little better on the base metal side though there are reasons to exercise a bit of caution with some of them as I detail in the editorial.

 

 

Leading and Lagging:

From the HRA Journal Issue 261,
November 24, 2016​

Things DIDN’T go as expected, with Trump winning the US election and markets embracing the change rather than fearing it.  That has led to a serious breakdown in the gold price.  The next big items are the November payroll report and December Fed meeting.  We’ll have to see how markets react to those events but the odds of a lower for longer gold price shouldn’t be underestimated.

 

 

First, the Bad News:

From the HRA Journal Issue 259,
October 18, 2016

Gold had another big leg down in October and that has the naysayers out in force.  I’m not that surprised or dismayed. Scepticism is a feature of young bull markets.  We should use it to our advantage rather than agonizing about it.

 

 

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But Aren't Commodities Dead?

No. Metals are basic necessities of modern life and the per capita use of metals rises with income levels. In the past decade several of the world's most populous countries underwent accelerated growth. While countries like China, India and Brazil are currently being impacted by recessionary forces, the changes that spurred their stronger growth are not cyclical. These secular changes occur as per capita income reaches levels that require increased infrastructure spending by government and allow for discretionary spending on things like housing. All advanced economies have gone through these high growth secular periods in the past. The difference is that never in history have so many people in the world been entering the "lower middle class" at the same time. The impact on resource use from this massive change is just beginning to be felt. Remember too that there are several other high population countries like Malaysia, Turkey, Indonesia and Pakistan that are just entering this growth phase now. Collectively, these countries have a population roughly equal to China.

Historically, these sorts of Quality of Life cycles last a full generation or more. We are a bit over 10 years into this one. There will be cyclical slowdowns within the secular trend and individual metals will underperform or outperform depending on their particular supply/demand balance. The mining sector, which we have decades of experience in, will have to struggle just to keep up many times during this trend. Economies turn much faster than metals production. In short, there are more bull runs ahead for various metals and they will start much sooner than most people think. Metals producers and explorers will go from pariahs to market darlings and the change will happen fast when it comes. It has many times before. Buying low and selling high means seeking out the right companies before the market does. HRA can help you do just that.

Latest HRA Media

 

Eric Coffin's latest video presentation titled "How to Invest in These Out of Whack Markets" from the Metals Investor Forum

                               November 12th, 2016

                      

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HRA is great at getting the "real" story out on resource companies by doing their due diligence and keeping on top of maps, news releases and corporate development. I highly recommend HRA...to any investor whether it be an institutional client or private investor.