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Friday, April 24, 2015
U.S. stocks are up an incredible 75% over the last four years.
It's not just U.S. stocks that are up, though. Stock markets around the globe are soaring higher...
But one area of the market has been left out...
The following chart tells the story. U.S. stocks are up big over the last four years... but this index of stocks is down nearly 80%.
Think about that... We've experienced an incredible bull market in stocks over the last four years. What group of stocks could possibly be down this far?
I'll spare you any more suspense... I'm talking about the Toronto Venture Exchange (TSX-V) – an index made up of hundreds of small-cap Canadian natural resource stocks.
It's not hard to understand why these companies have fallen so much since 2011. After all, the price of gold has fallen from a high of about $1,900 in 2011 to less than $1,200 today. The price of oil has fallen nearly 50%... from more than $105 a barrel last fall to around $56 today.
But right now, legendary Canadian resource investor Rick Rule believes it's time to consider buying these stocks. He thinks we're near a bottom. And if history is any indication, we could see huge gains in the near future.
You see, the last two times the Toronto Venture Exchange bottomed (in 2002 and 2009), it soared by 350% and 150%, respectively. Take a look...
Like I said, while markets around the world march to new highs, the Toronto Venture Exchange is down 76% in the last four years. That's a monumental crash. And the two times these stocks crashed in the last 15 years, they soared hundreds of percent over the next few years.
So... can they do it again? Absolutely.
Of course, we can't know for certain that today is the perfect moment to buy. In fact, without an uptrend in place, I'm not ready to buy these stocks right now. But this group of stocks is near the top of my list of investment opportunities... and it's one I'll gladly jump into once the trend starts to turn in our favor.
That's part of the reason why I'm speaking at the Sprott-Stansberry Natural Resource Symposium in Vancouver this July.
I've attended and spoken at this event many times in the past. It's truly a "who's who" of the natural resource sector.
Speakers include Rick Rule, Sprott Asset Management founder Eric Sprott, and billionaire mining-industry financier Robert Friedland. I'm especially excited to hear from these folks myself... and get a feel for the opportunity these guys are seeing in the natural resource sector today.
If you're interested in hearing these experts speak – and learning about the huge upside this sector offers – I recommend making it to the conference.
Regardless, you need to keep an eye on small-cap resource stocks right now. They're down nearly 80% in four years... And once they turn around, the upside opportunity is incredible.
P.S. If you're interested in attending the Sprott-Stansberry Natural Resource Symposium, we're running a special offer right now. If you sign up today, you can save $300 off the normal registration fee. But you have to act fast... this offer expires May 1. You can learn more about this offer right here.
"Investors who can look past the bad news today and single out great resource businesses selling at great prices have an incredible opportunity to make a lot of money over the next few years," Dan Ferris writes. Learn why he says bad news for resource stocks is good news for you.
Resource expert Matt Badiali agrees that the bear market in natural resources could end soon. He's keeping his eye on one commodity to break out in particular. Read more here.
AN IMPORTANT REMINDER ON INVESTING WITH GOVERNMENTS
Today's chart is a reminder of an important idea: When investing, it's better to invest "for profit" than "for the government."
Over the years, we've written many commentaries on how silly it is to make long-term investments in "state-owned" companies. You're better off partnering with a crack addict than with a group of government stooges.
Posting a performance chart of ExxonMobil (XOM) and Petrobras (PBR) is an excellent way to make our point. ExxonMobil is one of the best-managed public companies on earth. It has a long history of treating its shareholders well. Petrobras is a giant Brazilian oil company that operates with heavy involvement from that model of logic and fiscal sobriety, the Latin American political regime.
Our chart plots the performance of ExxonMobil shares (blue line) and Petrobras (black line) over the past three years. While ExxonMobil's share price (excluding dividends) has held steady, Petrobras is down more than 60%. And on Wednesday, the Brazilian oil giant released audited financial records showing $17 billion in asset and corruption charges, including more than $2 billion in alleged bribes. For profit or for the government? The choice is easy.