Market has turned today after yesterday's panic, making intraday high on volatility index VXO at 33.48. Today CPI with 5% year-on-year headline inflation is showing that we on the tract of stagflation in USA. With this coming bear rally optimism will come back and after initial sell off in Juniors they will benefit from new risk taking flow of money. Yesterday capitulation in juniors is providing extreme value compare to all last years of this Bull market. Bubble TV with their latest concept of commodity Bubble bursting is the best indicator of continuing Bull.
We like to be contrarian within the sector and Mantle Resources MTS.v is a very good example for M&A junior play with solid management and advanced property in stable mining friendly environment. Company based in Canada with deposit in BC next to Teck Cominco/Korean Zinc deposit, all surrounded area is consolidated by Mantle. Lundin mining is holding 10% in the company and considering it as strategic investment. Resources were published couple of months ago and company is busy drilling now and building infrastructure. Zinc prices recently were under pressure, once investors will realise that world is still spinning around even with USA in a recession, company will have a double boost from rising zinc prices and advancing resources. Recent acquisition by Chinese zinc deposits in Yukon is very promising for an exit strategy in this play.
China has come down to earth as we have discussed before, now charts are looking like ready for fun and strong Olympic message will help. We think for our money it is worth to learn Chinese a little bit and stay in calls on FXI.
Brazil has always been interesting to me with my interest in Argentina junior exploration play TNR Gold TNR.v. Latest discovery of off shore oil will bring to this country new geopolitical meaning. Calls on EWZ looks timely now.
India has turned overnight form investment darlings into unloved, ugly and strange country with a very high investment risk according to market pricing at the moment. We dare to see here the same overpessimism and has established call position in EPI.
And finally - Water, after our last solar water energy fun with World Water and Power WWAT.ob we have stayed out of the sector for a while and like now to accept the invitation and test the concept of weathering bear market in this stable business. Calls on PHO were taking according to charts turn around signal.
No comments:
Post a Comment