The recent plunge in oil prices is just the latest bit of bad news for investors in commodities. Slumping Chinese demand for iron ore, copper and many other items has led to a forgettable year for metals as well. Even the safe havens of gold and silver are losing their luster. Few expect a rapid price rebound for many commodities in 2015 as producers must reckon with too much capacity installed a few years ago. It could be a year or two before the current pullback in mining and exploration leads supply to fall back below demand. Jim Rogers, a… Read More

The recent plunge in oil prices is just the latest bit of bad news for investors in commodities. Slumping Chinese demand for iron ore, copper and many other items has led to a forgettable year for metals as well. Even the safe havens of gold and silver are losing their luster. Few expect a rapid price rebound for many commodities in 2015 as producers must reckon with too much capacity installed a few years ago. It could be a year or two before the current pullback in mining and exploration leads supply to fall back below demand. Jim Rogers, a perma-bull on commodities, can only muster deep enthusiasm for agricultural commodities these days. #-ad_banner-#But there is one commodity that is bucking the global down-trend: Uranium. And a deeper look at why uranium is rebounding now provides insights as to why it should also perform well in 2015 and 2016. For investors, it’s a chance to profit from an otherwise unloved asset class. After Fukushima We’re coming up on the fourth anniversary of the nuclear disaster in Fukushima, Japan. The events of March 2011 led the Japanese and German governments to announce plans to radically reduce their use of nuclear… Read More

The first rule of contrarian investing: “Buy when there’s blood in the streets.” And the coal sector sure has been hemorrhaging. The chart of the Market Vectors Coal ETF (NYSE: KOL) speaks for itself. The reasoning behind the deep hatred for coal is simple. Investors expect the energy source to be regulated out of existence, which has already led a number of electric utilities to switch from coal-fired plants to natural gas.  ​But those fears may be overblown. After all, the U.S. government has yet to craft a concrete and comprehensive energy policy and, thanks to the Republican… Read More

The first rule of contrarian investing: “Buy when there’s blood in the streets.” And the coal sector sure has been hemorrhaging. The chart of the Market Vectors Coal ETF (NYSE: KOL) speaks for itself. The reasoning behind the deep hatred for coal is simple. Investors expect the energy source to be regulated out of existence, which has already led a number of electric utilities to switch from coal-fired plants to natural gas.  ​But those fears may be overblown. After all, the U.S. government has yet to craft a concrete and comprehensive energy policy and, thanks to the Republican sweep of the midterm elections, the status quo will remain. #-ad_banner-#Investors are also concerned about a slump in coal exports, as demand wanes in emerging markets such as China — one of the world’s largest coal burners and consumers of metallurgical coal used in steel making. As Chinese government officials engineer a soft economic landing, investors are limiting their risk by reducing coal exposure, anticipating even weaker demand ahead. To my mind,  coal represents a huge contrarian play.  What’s Demand Really Like? Global demand for coal is not quite as bleak as the headlines suggest. Despite regulatory hostility in… Read More

The past year has not been great — generally speaking — for mining stocks. Just look at the chart below — it’s an index comprised some of the biggest names in the precious metals and mining space. The index has fallen off a cliff in 2014 — down nearly 16% this year.   Most investors cringe when they look at a chart like this. But many of the savvy industry experts I know in Canada love seeing these big drops, especially when we’re nearing the end of the calendar year. You see, I’ve worked… Read More

The past year has not been great — generally speaking — for mining stocks. Just look at the chart below — it’s an index comprised some of the biggest names in the precious metals and mining space. The index has fallen off a cliff in 2014 — down nearly 16% this year.   Most investors cringe when they look at a chart like this. But many of the savvy industry experts I know in Canada love seeing these big drops, especially when we’re nearing the end of the calendar year. You see, I’ve worked in the mining and energy sectors for more than a decade, traveling as far as Russia, Chile and Madagascar to inspect natural resource projects. But these days, I call Canada home. And, as editor of StreetAuthority’s premium advisory, Scarcity & Real Wealth, my job is to provide readers with investment opportunities they won’t find from analysts who sit at a desk all day. #-ad_banner-#And I’m excited when I see a chart like this for one simple reason. It has to do with a “quirk” in the way the Canadian tax system works — a quirk that lets… Read More

Roughly seven years ago, commodity prices were surging to record highs as Western economies grew at a decent pace and Asian economies experienced supercharged growth. Though the 2008 financial crisis led to a pullback, commodity prices began moving higher again in 2009 and 2010 as economists predicted a synchronized global economic rebound. We now know that such a widespread rebound never took root, and by the spring of 2011, commodity prices were showing signs of a breakdown. Fast forward to 2014, and this asset class is now deeply out of favor. The underperformance relative to stocks, in that time, has… Read More

Roughly seven years ago, commodity prices were surging to record highs as Western economies grew at a decent pace and Asian economies experienced supercharged growth. Though the 2008 financial crisis led to a pullback, commodity prices began moving higher again in 2009 and 2010 as economists predicted a synchronized global economic rebound. We now know that such a widespread rebound never took root, and by the spring of 2011, commodity prices were showing signs of a breakdown. Fast forward to 2014, and this asset class is now deeply out of favor. The underperformance relative to stocks, in that time, has been quite striking. Of course the secret to great investing is “rotation, rotation, rotation.” As certain asset classes appreciate and others slump, savvy investors tend to book profits on winning categories and re-deploy assets into the biggest losers — such as commodities. My colleague Dave Forest devotes a considerable amount of time in Scarcity & Real Wealth to commodities, identifying the best investments for current and future market climates. A number of stocks in his portfolio holds clear current value — in relation to their balance sheets and future cash flows. #-ad_banner-#But investors also like to get reassurance from a macro-economic perspective. Read More

There is a pretty straightforward rule to every high-yield stock. If the dividend looks safe, then it’s likely a wise investment. And if the dividend appears poised for a cut, then you should head for the exits. But what if the looming dividend cut is likely to be a lot smaller than the crowd is anticipating? Such stocks, counter-intuitively, are a great buying opportunity. The current dividend concerns surrounding upstream master limited partnership Linn Energy, LLC (Nasdaq: LINE) help paint the picture. (Upstream energy producers acquire existing oil and gas properties once they are already in… Read More

There is a pretty straightforward rule to every high-yield stock. If the dividend looks safe, then it’s likely a wise investment. And if the dividend appears poised for a cut, then you should head for the exits. But what if the looming dividend cut is likely to be a lot smaller than the crowd is anticipating? Such stocks, counter-intuitively, are a great buying opportunity. The current dividend concerns surrounding upstream master limited partnership Linn Energy, LLC (Nasdaq: LINE) help paint the picture. (Upstream energy producers acquire existing oil and gas properties once they are already in production.) Linn, in fact, is the nation’s largest upstream MLP, with a strong track record of generating cash flows from acquisitions well in excess of its purchase costs. Oil’s price slump means that the company’s future cash flows won’t be as robust as was expected just a few months ago — when West Texas crude traded for $100 a barrel. Reflecting a more challenging environment in 2014, management recently trimmed the dividend to $2.90 a share, from last year’s $3.14 a share. The key question for investors: Can the company still support the current dividend? Considering its yield… Read More

It was December 17th, 1938. Two scientists, Otto Hahn and Fritz Strassman, did what all scientists hope to do: They made a discovery that changed the course of the world forever. #-ad_banner-#​Hahn, a chemist, accomplished something he thought to be impossible — and later won a Nobel Prize for his work. The now celebrated “radium-barium-mesothorium-fractionation” succeeded in splitting the atom and gave birth to nuclear fission. Together, the two scientists laid the foundation for the advancement of nuclear energy. Today, nuclear energy accounts for nearly 20% of the total… Read More

It was December 17th, 1938. Two scientists, Otto Hahn and Fritz Strassman, did what all scientists hope to do: They made a discovery that changed the course of the world forever. #-ad_banner-#​Hahn, a chemist, accomplished something he thought to be impossible — and later won a Nobel Prize for his work. The now celebrated “radium-barium-mesothorium-fractionation” succeeded in splitting the atom and gave birth to nuclear fission. Together, the two scientists laid the foundation for the advancement of nuclear energy. Today, nuclear energy accounts for nearly 20% of the total energy production in the United States. Although we hear so much on the news about solar and wind power, other forms of alternative energy aren’t making headlines. But that could soon be changing… Like the birth of nuclear fission in 1938, the world might be on the cusp of another game-changing discovery. You may not have heard about this, but key developments in nuclear fusion were recently announced by aerospace and defense contractor Lockheed Martin’s (NYSE: LMT) highly-regarded Skunk Works division. Word of this advancement came in mid-October, when… Read More

Heading into earnings season, investors were bracing for a troubling round of quarterly reports in the energy sector. A sharp drop in crude oil prices in the past few months led to concerns that companies would report dismal outlooks for the quarters ahead. Yet the bad news never arrived. Major oil companies, such as Exxon Mobil Corp. (NYSE: XOM) and Chevron Corp. (NYSE: CVX), delivered upside surprises, and oil services firms, like Schlumberger Ltd (NYSE: SLB), also said that business conditions are holding up. Still, a great deal of damage has been done in this sector. Read More

Heading into earnings season, investors were bracing for a troubling round of quarterly reports in the energy sector. A sharp drop in crude oil prices in the past few months led to concerns that companies would report dismal outlooks for the quarters ahead. Yet the bad news never arrived. Major oil companies, such as Exxon Mobil Corp. (NYSE: XOM) and Chevron Corp. (NYSE: CVX), delivered upside surprises, and oil services firms, like Schlumberger Ltd (NYSE: SLB), also said that business conditions are holding up. Still, a great deal of damage has been done in this sector. Outside of those aforementioned blue chips, many smaller energy-related stocks have fallen far from their 52-week high. One stock that I’ve had my eye on now appears set to deliver solid upside, has a game plan to protect against further downside and offers an impressive 7.2% dividend yield. It’s unloved now, but could be one of the best energy sector rebound plays of 2015. I’m talking about Noble Corp. (NYSE: NE). Noble owns and leases massive drilling rigs, with a focus on both deepwater and shallow water offshore regions. The company spun off roughly half of its fleet,… Read More

I’ve found that one of the best ways to reduce my chance of making an investment mistake is to follow the lead of great investors with multi-decade track records of success. #-ad_banner-#​The way I figure it, the guys who have been successful for a period of decades don’t make many big mistakes. Billionaire investor Wilbur Ross is one such investor that I follow. Ross’ method of operation is to hunt for bargains in the most distressed areas of the stock market. And he seems to be pretty good at it. Ross has achieved an annual rate… Read More

I’ve found that one of the best ways to reduce my chance of making an investment mistake is to follow the lead of great investors with multi-decade track records of success. #-ad_banner-#​The way I figure it, the guys who have been successful for a period of decades don’t make many big mistakes. Billionaire investor Wilbur Ross is one such investor that I follow. Ross’ method of operation is to hunt for bargains in the most distressed areas of the stock market. And he seems to be pretty good at it. Ross has achieved an annual rate of return of 44% since 1997, according to an introduction given by investing legend Prem Watsa. Ross recently revealed his interest in buying shares of beaten down Canadian energy producers.  I closely follow these companies and I can tell you that current share prices are exceptional values. Ross thinks now is a buying opportunity for Canadian producers, which have seen a severe decline in share prices, if you believe that the long-term outlook for oil is positive. Specifically, Ross is looking at small- and mid-cap… Read More

Energy prices have plummeted across the board in recent months. West Texas Intermediate (WTI) crude has fallen to its lowest level since June 2012, while natural gas is trading near 11-month lows.  #-ad_banner-#Coal has been especially hard hit over the past few years thanks to the increasing supply of cheap natural gas and environmental concerns. A Republican takeover in Congress could help end the coal shaming and give prices a boost. Elections, like markets, are difficult to predict, but after the drawn-out decline in the sector, the downside risk appears limited. Prior to the recent selling, Market Vectors Coal ETF… Read More

Energy prices have plummeted across the board in recent months. West Texas Intermediate (WTI) crude has fallen to its lowest level since June 2012, while natural gas is trading near 11-month lows.  #-ad_banner-#Coal has been especially hard hit over the past few years thanks to the increasing supply of cheap natural gas and environmental concerns. A Republican takeover in Congress could help end the coal shaming and give prices a boost. Elections, like markets, are difficult to predict, but after the drawn-out decline in the sector, the downside risk appears limited. Prior to the recent selling, Market Vectors Coal ETF (NYSE: KOL) traded between $20 and $17 for most of the past year. Importantly, the new lows made earlier this month did not come with new highs in volatility. This is known as a bullish divergence and is often a sign that sellers have been exhausted and a bottom is in place. Peabody Energy (NYSE: BTU) is the largest private-sector coal company in the world. It suffered a string of losses and has fallen from its $74 peak in 2011 to under $10 on Monday.  This is the first time prices have been below $10 in a decade. Read More

Stock exchanges are not alone in seeing prices pull back lately. In at least one case, however, that is actually a good thing.  Drivers both state-side and abroad have no doubt felt the pain at the pump subsiding this fall.  In the United States, many gas stations are now hawking unleaded for under $3.00 a gallon — a welcome sight in my eyes, at least.  #-ad_banner-#Those lower prices have come at a cost to some portfolios, however.  Oil prices have been steadily declining since making highs in June, falling from north of $104 to around $81 at the time this… Read More

Stock exchanges are not alone in seeing prices pull back lately. In at least one case, however, that is actually a good thing.  Drivers both state-side and abroad have no doubt felt the pain at the pump subsiding this fall.  In the United States, many gas stations are now hawking unleaded for under $3.00 a gallon — a welcome sight in my eyes, at least.  #-ad_banner-#Those lower prices have come at a cost to some portfolios, however.  Oil prices have been steadily declining since making highs in June, falling from north of $104 to around $81 at the time this article was written. Considering that nearly every industry is affected by oil in some way, this means there’s a good chance some of your holdings have fallen in tandem. Naturally, oil explorers, producers, and those along the supply chain have been hit the hardest.  Exxon Mobil Corp. (NYSE: XOM), the world’s largest oil company by revenue, has fallen 11% since July.  In contrast, the S&P 500 is only down 2.6% in the same time period.  The big question now: have prices reached a bottom, and is it time to go long big oil? A recent pop in energy stock prices… Read More