My single best investment idea for 2019
Wednesday, 5 September 2018
By Sam Volkering
- Resources boom 3.0
- Somewhere, someone is making this all
Identifying microcap and nano-cap stocks is easy. You look for companies with tiny market capitalisation.
Done and done.
Except it’s not that easy. Finding them is one thing. Finding the ones that could deliver a potentially immense financial return is another.
I spend my life travelling around, researching and identifying the best micro and nano-cap stocks in the world for investors. But it all starts with figuring out what the bubble up booms are that will see these stocks fly.
I look for the areas of industry set to explode in demand and awareness before they go BOOM.
In our free global microcap masterclass email series, which kicks off this Saturday, we’ll dive right into many mini booms that are just starting to flare up around the world.
There’s at least two I believe could go totally supernova in 2019.
I’m talking about a pot and blockchain supernova.
If the micros I’ve pinned to this bubble trend are the right ones, they’ll likely go supernova too.
(We’re still taking free registrations here, if you’re interested.)
Several other bubble-up booms are a bit more nuanced.
One, which I’d like to talk about now is not bleeding edge new.
In fact it’s a third-evolution of a boom that’s been going since the turn of the century.
It may not hog the headlines as much as flashy ones you’ll discover in our free Mudumu Microcap Masterclass.
But the enterprising microcaps riding this trend in 2019 could still see potential gains in the many thousands of percent.
More on this after the markets…
Today the Dow Jones Industrial Average closed down 12.34 points, or 0.048%.
The S&P 500 is down 4.80 points, or 0.17%.
In Europe the Euro Stoxx 50 index finished down 35.63 points, or 1.05%. Meanwhile, the FTSE 100 lost 0.62%, and Germany’s DAX fell 136.20 points, or 1.10%.
In Asian markets, Japan’s Nikkei 225 is down 62.94 points, or 0.28%. China’s CSI 300 is down 1.07%.
In Australia, the S&P/ASX 200 is down 56.10 points, or 0.89%.
On the commodities markets, West Texas Intermediate crude oil is US$69.35 per barrel. Brent crude is US$77.80 per barrel.
Gold is trading for US$ 1,196.10(AU$ 1,663.40) per troy ounce. Silver is US$ 14.23(AU$ 19.79) per troy ounce.
One bitcoin is worth US$ 7,353.00.
The Aussie dollar is worth 71.90US cents.
Resources Boom 3.0
Our world is high tech. We have connected networks everywhere. Our lives are littered with computers, sensors, devices that connect and interact and process everything.
It’s crazy when you think about it. I mean, just look around you now. What do you see?
I see TVs, computers, cars, electricity, Wifi hubs, smart devices, phones and planes (I’m looking up for that last one).
Everywhere you look we’ve built, created and manufactured these things in some way or another. The computer you’re on has more metals in it than you probably know exist.
Our high tech world isn’t about to go low tech any time soon either. We’re only going to get more devices and ‘smart’ things thanks to the Internet of Things. Our cars will only get more sensors, cameras and radars in them thanks to self-driving cars.
Planes, trucks, ships, cars, bikes, scooters, skateboards will all have batteries in them. And then to charge those things we’ll have charging points in abundance around us.
More screens, more phones, bigger phones, foldy phones, everywhere there are just more things!
Well here’s the news flash:
Somewhere, someone is making this all.
They’re making these things with new manufacturing processes.
And they’re using a whole range of stuff we’ve dug up from the ground to make it.
To build anything you need to build it from something. You need metals and materials to make. And as I see it, a bubble up boom is coming again for all the tiny unknown materials we need in radar, sensors, microchips, batteries and communications.
First, we had the China-driven infrastructure boom of the 2000s.
That drove up the prices of all manner of conventional mineral diggers and drillers.
Then, we had the ‘Resource Boom 2.0’. The rare earths boom at the turn of this decade.
This was the first wave of high-tech resource demand.
That was a massive mania.
If you recall, some tiny stocks here in Australia went absolutely ballistic. And then fell back to earth.
As Reuters.com writes:
‘Prices of such exotic components of the periodic table as dysprosium and terbium increased by multiples over 2010-2011 before collapsing just as quickly.
‘Five subsequent years of low-scale range-trading have seen rare earths slip off the collective investment radar, their place taken by new “hot” metals such as lithium and cobalt.’
Now rare earths and tech minerals are making a comeback.
Or at least a couple of them are.
I believe this is going to gather momentum in 2019.
The relentless expansion of electric vehicles onto global roads…and the increasing demand for the elements that power them…is part of it. The growing renewable energy industry is another. As is the increasing production of smartphones and consumer electronics.
But those were all, in part, drivers of the first tech metal mania.
What’s NEW here?
Why do I believe we’re heading for a tech metal resurgence…a Resources Boom 3.0…in 2019? Once that could make a small clutch of globally listed microcaps RUN HARD over the next 12 months?
If you want to see the kind of plays I’m taking about, check this out. It’s a list of my favourite type of stocks.
Data Source: Bloomberg
Click to enlarge
The biggest of these stocks has a market capitalisation of CA$336.5 mln. (That’s Canadian dollars, by the way.)
The smallest has a market cap of CA$12.8 mln. (The eagle-eyed reader will note that’s also Canadian dollars.)
More importantly, you’ll notice the returns. These are one-day returns. 89% in one day? Thanks, we’ll take that. 46% in one day? That’s nice too. Stick that in your pocket.
Perhaps most important of all, check out the right hand column. Most of these stocks trade for cents. That means a relatively small few-cent gain can result in a big old return — if things play out as you hope.
All these stocks are ‘tiny stocks’. Some of the tiniest stocks in the world. They are also some of the most exciting stocks in the world. The kind of stocks I love researching, analysing…and ultimately, recommending to regular Aussie investors.
If you’re even vaguely intrigued by this idea (the potential to make a big gain from tiny stocks), make sure you register for my brand new global microcap masterclass.