As the metal price cycle matures, the chances improve that markets become more aware of the upside risks than the downside risk which dominated sentiment...

John Robertson

PortfolioDirect

As the metal price cycle matures, the chances improve that markets become more aware of the upside risks than the downside risk which dominated sentiment earlier on. Markets could still be some years away from a genuine cyclical rise but there will be some tendency to anticipate the next rise rather than worry about the depth of the current cycle. This change in attitude will generally favour Phase III and Phase IV companies which, by definition, lack organic growth but whose earnings can be highly leveraged to commodity price movements. Before the onset of a cyclical upturn, these shorter term fluctuations are best treated as trading opportunities whose benefits could dissipate as quickly as they arose in the first instance.


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John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...

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