General Market Commentary
General Market Commentary
An Uncomfortable Truth for Bigoted Bugs
by Nick Hodge
I just got done writing my January issue of Foundational Profits.
In it, we are:
- Selling some gold stocks; and
- Buying some gold stocks.
I know, I’m a madman.
More importantly, we are holding our copper and rare earth and uranium positions.
Here’s an uncomfortable truth for you bigoted bugs: Gold stocks have gotten their ass kicked by other metal stocks over the past six months, including uranium.
That’s a six-month chart of the:
- Global X Lithium & Battery ETF (NYSE: LIT) (dark blue)
- VanEck Vectors Rare Earth/Strategic Metals ETF (NYSE: REMX) (light blue)
- Global X Uranium ETF (NYSE: URA) (purple)
- Global X Copper Miners ETF (NYSE: COPX) (copper)
- VanEck Vectors Junior Gold Miners (NYSE: GDXJ) (gold)
Gold stocks are getting outperformed 3X or more by all those other sectors.
As a result, readers of mine are up more than 300% on Ivanhoe Mines (TSX-V: IVN), 50% on Cameco (NYSE: CCJ), and have doubled their money in MP Materials (NYSE: MP) in a month.
Don’t say I didn’t tell you so. I have written several times in these pages about selling gold stocks and buying into copper and lithium and rare earths (here and here and here and here and even here .).
As for gold… it’s time to get (re)positioned.
The metal itself looks like it wants to go higher after retracing to its 2012 high near ~$1,775 per ounce last month.
But it hasn’t technically broke out yet, despite a very good start to 2021.
Similarly, gold stocks have not broken back out.
And what’s more, through gold’s run to record prices last year they largely failed to provide the leverage they are known for — only marginally outperforming the price of the metal itself.
I think that changes once gold gets back to record highs.
And while I can’t say when that will be, I can tell you I’ve used this gold bull market intermission to reposition — selling some Wheaton Precious Metals (NYSE: WPM) and buying more Franco Nevada (NYSE: FNV) as just one high level example.
If you want more guidance like that, including how we’re playing copper, uranium, and rare earths… the next issue of Foundational Profits comes out this Friday. Learn more here.
But most importantly, don’t forget there’s an entire world of resource stocks out there.
And that diversifying in the sector, rotating gold positions or — heaven forbid — selling… doesn’t make you any less of a gold bull.
In fact, it probably makes you a better investor.
You could even say it’s lit.
Call it like you see it,
Publisher, Resource Stock Digest
Nick Hodge is the co-owner and publisher of Resource Stock Digest. He's also the founder and editor of Hodge Family Office, Family Office Advantage, and Foundational Profits. He specializes in private placements and speculations in early stage ventures, and has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world.
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