Headline news results in rash decisions; don’t let Trump’s victory distract you from the bigger picture, says Matt Geiger of MJG Capital. He explains why now is an excellent time to deploy capital into mining equities and highlights seven companies poised to deliver outsized returns.
We are still in the early stages of a four- or five-year resource bull market. Those who own hard assets will be heavily rewarded; those exposed to the general stock market (or, god forbid, government debt) are in for a rude awakening. What we are witnessing is reversion to the mean after a five-year period in which commodity prices slumped as financial assets inflated in price. The tide has shifted, and Trump instead Hillary in the Oval Office will have little effect on this reality.
For those who have missed this mining bull market thus far, NOW IS THE TIME TO GET AGGRESSIVE. Precious metals, base metals, ag minerals and energy metals should all do well. After a torrid start to the year, resource equities have been in a consolidation phase since mid-August. Smart investors are using this opportunity to build positions in high-quality names. Why wait until 2017 when hard assets start moving again when you can buy right now at cheaper prices?
Before I provide updates on a few of my favorite picks, I encourage all readers to check out a white paper produced by Jeremy Grantham and Lucas White from GMO. The paper, entitled “An Investment Only a Mother Can Love: The Case for Natural Resource Equities,” provides a comprehensive look into the benefits afforded by long-term investments in natural resource equities. This is a must read for anyone actively investing in the space and can be accessed free of charge here.
The partnership maintains a concentrated portfolio of ~20 resource equities. Our …read more