On Thursday June 30, 2016 Allan Barry Laboucan interviewed me for two hours about the Spec Value Hunter and Bottom-Fish picks that have I focused most of my written recommendation attention on. The turning point for the 5 year resource sector bear market that began in 2011 was the third week of January 2016. The 2016 SVH Index, consisting of 13 formal buy recommendations, is up 106%. The 2016 Bottom-Fish Index, consisting of 100 bottom-fish which are informal accumulation targets, is up an embarrassing 180% from December 31, 2015 when I assembled the list.
The resource sector rally that began in late January should have paused ahead of the July 1-4 long weekend, and descended into the summer doldrums, with a rebound in September. Instead, on July 4 when American brokerage firms were shut for Independence Day, TSXV volume jumped from 156 million on June 30, the day of the interview, to 204 million shares. That is lower than the 302 million the TSXV hit on April 19, but nevertheless very impressive as we head into summer. The resource sector has successfully violated the PDAC Curse in Q2 of 2016. The question now is if it will continue to violate the PDAC Curse as it did in 2009 when the market ran until PDAC in 2010. Although the PDAC curse manifested itself in Q2 of 2010, when things were supposed worsen with the summer doldrums, the market in Q3 of 2010 blazed to even greater trading volumes and financing value before hitting the wall created by the Tea Party blockade in Q2 of 2011. The Tea Party mindset has been reborn today as the driver behind the Brexit Leave vote, and the ascent of Donald Trump as the presumptive Republican nominee to challenge Hillary Clinton for the White House in the November presidential elections. Whether it is Trump the disruptor or Clinton the defender of the status quo that ends up in the White House, fear of instability and uncertainty will not diminish (see my Kaiser Blog June 23, 2016: Brexit and the Bundle of Sticks). It will escalate because there are no simple answers to the stresses created by globalization. Precious metals demand is one area that will benefit, but so will other metals as end-users start to think about where they will procure their needs when supply lines get disrupted by domestic strife, international conflict, or protectionist measures.
Not every Bottom-Fish or Spec Value Hunter pick has rallied. Investors returning to the resource sector only now may have missed the early departures, but not every captain has pushed his boat out to sea. There are plenty of seaworthy resource juniors still idling at the dock, or sailing away slowly enough that making a leap to get on board is not foolhardy. Newcomers can register with a First Time Registration and past members can Renew Here.