Why these stocks gained as the market tumbled
Tuesday, 11 December 2018
By Bernd Struben
- What if the ‘witch hunt’ succeeds?
- Or maybe you already knew all this…
- ‘Judge Slams Schools’ “Medieval” Religious Discrimination Laws’
Yesterday proved another tough day on the old trading floor. Unless you’ve been shorting the market, that is.
When I handed yesterday’s Port Phillip Insider over to our editing, compliance and production teams the S&P/ASX 200 was down 117.79 points, or 2.07%. That was just after 3:00 pm to give our support staff the time to work their magic.
By the time the market closed an hour later the damage was even worse. The ASX 200 closed down 129 points, or 2.3%.
This puts the index of Australia’s largest 200 listed companies by market cap at its lowest level since December 2016. That’s almost two years to go nowhere. And this in an environment of record low interest rates.
If you’d like an even gloomier statistic, here’s one. The ASX 200 is down 7.0% from 10 April 2015. That’s three and a half years to lose 7.0% of your investment…if you were aiming to match the index.
As you can see in the chart below, much of the carnage has come over the last three months. The ASX 200 has fallen 12.6% since 30 August.
That’s not technically a crash yet, as most pundits peg 20% losses as the official crash level.
But it’s well on its way.
Source: Google Finance
Click to enlarge
Of course, it’s important to remember that the stock market is precisely that…a market of stocks. The average value of all the combined stocks in the index fell 2.3% yesterday. But that doesn’t mean they all did.
Some did worse.
Like Australia and New Zealand Banking Group Ltd [ASX:ANZ], for example. The bank, with a market cap of $70.6 billion, saw its share price fall 4.2% yesterday.
Other stocks managed to buck the trend, with Aussie gold miners largely ending the day higher.
Take Regis Resources Ltd [ASX:RRL]. The Aussie gold producer and explorer has a market cap of $2.3 billion. As the wider market tanked, Regis’ share price climbed 5.2% yesterday.
As you can see in the five-day chart below, that was enough to put the gold stock’s share price up 10.8% since its low last Thursday.
Source: Google Finance
Click to enlarge
There are a lot of factors at work lately in favour of gold stocks.
Though down slightly overnight, the gold price has been steadily trending higher.
Gold is classically seen as safe haven asset. And investors — alongside sovereign nations — have plenty of reasons to seek out a haven. Ballooning global debt, rising uncertainty over the fallout from Brexit, and global trade disruptions are just a few that come to mind.
It’s threats like these — and one other major global risk we’ll cover below — that convinced resource analyst Jason Stevenson to put together a new report covering his favourite three gold ‘shock stocks’.
These are stocks he believes will see their share prices soar alongside rising global uncertainty.
More, after the markets…
Overnight, the Dow Jones Industrial Average closed up 34.31 points, or 0.14%.
The S&P 500 gained 4.64 points, or 0.18%.
In Europe the Euro Stoxx 50 index finished down 45.14 points, or 1.36%. Meanwhile, the FTSE 100 lost 0.83%, and Germany’s DAX closed down 166.02 points, or 1.54%.
In Asian markets, Japan’s Nikkei 225 is down 119.20 points, or 0.56%. China’s CSI 300 is up 0.29%.
In Australia, the S&P/ASX 200 is up 4.10 points, or 0.07%.
On the commodities markets, West Texas Intermediate crude oil is US$50.96 per barrel. Brent crude is US$59.97 per barrel.
Turning to gold, the yellow metal is trading for US$1,244.71 (AU$1,730.69) per troy ounce. Silver is US$14.55 (AU$20.23) per troy ounce.
One bitcoin is worth US$3,411.12.
The Aussie dollar is worth 71.92 US cents.
What if the ‘witch hunt’ succeeds?
So, what’s potentially the biggest likely threat facing global markets?
According to Jason Stevenson, it’s political turmoil in the US. Specifically, the spectre of Donald Trump’s impeachment.
Here’s what Jason wrote to you in Port Phillip Insider on 30 November:
‘Few people believe that US President Donald Trump will get impeached…
‘The bottom line is, career politicians couldn’t care less about anything but themselves and getting votes at the next election. They don’t like change, they like things as they are. Trump is a threat to the US political establishment. I believe they are desperate to get him out of power, whether Democrats or Republicans….
‘In the event that Donald Trump is impeached ― most likely dishonestly by various factions of the political elite ― before the next Presidential election, we could see the greenback crash and the gold price skyrocket into 2019/2020…
‘[W]ith few connecting the dots behind the scenes, you’re looking at a massive opportunity to buy the best gold stocks today.’
That massive potential opportunity still exists. Especially as more people are beginning to cotton on to the fact that Trump might not see out his full term in office.
The following headline comes from yesterday’s Bloomberg: ‘Impeachment Is Getting More Likely’. The article continues:
‘Impeachment is a political process, not a criminal one. If Congress thinks that what Trump and his associates did constitutes “high crimes and misdemeanors,” then it doesn’t matter if they technically violated the criminal code…
‘It’s now obvious that Trump had a strong motive for concealing the truth about his conduct, both with regard to Russia and to his affairs.’
Now as you may know, I don’t believe Trump will be successfully impeached. At least not during his first term in office.
But signs are mounting that the Democrats will give it a shot regardless. If just to further hobble and smear Trump’s presidency.
Even if unsuccessful, this process alone is likely to shake global markets and see investors shift into haven assets.
And if Jason’s right, the three ‘gold shock stocks’ he recommends could see rapid gains of 419%…or more.
Of course, there is no shortage of risk when investing in miners.
Jason covers all of that as well in his ‘shock stock’ report. Click here for the full story.
Or maybe you already knew all this…
Subscribers of Jason Stevenson’s Gold & Commodities Stock Trader will be familiar with the above analysis. They’ll also know the three gold stocks he believes are best set to benefit from a rising gold price.
But there’s another exclusive group of readers who’ll be up to date on all this.
Our Alliance Partners.
You should have received a few emails letting you know we opened the doors to new Alliance membership last week. Those doors remain open — alongside a first-ever trial offer — until midnight this Thursday.
Port Phillip Publishing first rolled out its Alliance offer right when I joined the company. That was in October 2013.
Back then, if memory serves, the offer covered all six of our investment advisories. That’s right…six.
Today that same offer — albeit at a higher price — covers 21 investment advisories, plus the all new Elite Portfolio Series. And let’s not forget your daily Port Phillip Insider.
This offer now includes all but two of the services we currently publish. And it includes every service we ever will publish in the future.
That’s important because our Alliance Partners are partners for life. Meaning the value of the service will likely only increase…at no extra cost to you.
But even with today’s suite of 21 services, it would cost you $31,968 to subscribe to them all. And you’d have to pay that — or more — every year.
Alliance Partners, on the other hand, pay a one-off price that’s a fraction of that cost (plus a small annual maintenance fee). And they receive every one of those services for life.
And in today’s wobbly markets, having access to services like Harry Dent’s Boom & Bust Letter, The Gowdie Letter, and Kris Sayce’s Crash Market Investor could see your lifetime subscription pay for itself by steering you onto safer investment paths. Or in the case of Crash Market Investor, by setting you up for big potential gains when share prices head south.
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Finally, here’s the latest in the debate on taxpayer funded discrimination, from The Australian Tribune:
‘Judge Slams Schools’ “Medieval” Religious Discrimination Laws’
‘The Australian Tribune is a strong defender of individual freedoms and rights. That very much includes the freedom of religion.
‘Yet religious schools who wish to discriminate against students and teachers of different sexual orientations and faiths should do so without public funding. It’s really quite simple. If you hold your hand out for taxpayer money, you should forfeit your right to discriminate.
‘Sounding off on the controversial issue, former High Court judge…’
If you’re fed up with sanitised, politically correct dogma cut and pasted from one mainstream source to another then The Australian Tribune is for you.
And it’s absolutely free.
Sign up here to get The Australian Tribune delivered free to your inbox five days per week.
You can visit our website at https://www.theaustraliantribune.com.au/ to read the complete article above now.