A couple of weeks ago, the FTSE AIM All Share Basic Resources crossed again to the upside on the 200 day moving average. It did this a year ago as well but lost it back, and then some, with the ‘Sell in May and Go Away’ sentiment which was seriously amplified by the Chinese equity market sell off in the summer of last year. The FactSet chart below shows the story.
Now there are some definite bearish thoughts and views running around at the moment so I feel this morning we should explore a little bit. The first big worry is Chinese debt – has it got out of control or can the Party control it ?There is an article in the Economist last week discussing this which gives a very good summary and you should all read it,
The CEO of resource specialist broker VSA is enjoying a rally in resource stocks and so reminds his clients today of his top 5 small cap and mid-cap plays in the sector: Andrew Monk writes:
The PDAC Conference in Toronto is the world’s largest mining convention and our man on the spot is Andrew Monk of VSA Resources. His report back does not make for entirely pleasant reading, not least in what the world thinks of the AIM casino. Over to Monkey…
OK so today I’ll give you my thoughts on other areas – so Airlines and Tour Operators, which Are my hobby sectors, and also a little bit on Energy as that is also an area we are looking to get more involved in and Agri
So second day back at school and today I will give you my thoughts on the Mining sector which really has had a torrid time for about 3 years now and you have to start thinking it cant keep falling forever..............but that also doesn't mean it is ready to be invested in.
So we start the year with the oil price still at the front of our minds and falling and I have to say I'm not sure what stops it going quite a lot lower and $40 seems to be the next low point possibly. Now I don't want to spoil what we are writing in the next VSA Quarterly as I know you are all looking forward to reading it - such an important release - haa haaa, well we put a lot of effort into to it so I'm not giving it all away just yet but do look at this chart of the oil price since 1861 in real terms and tell me if you think oil might go lower and stay low.
