Interesting posting from S. Broderick, I thought.
Right now, you’re in the early innings of Phase II of the commodities supercycle — a period of accelerated growth, accelerated price rises and grand slam profit opportunities.
Let me explain: Generally, commodities go through a standard cycle of (a) growing scarcity, (b) rising prices, (c) oversupply, and then (d) falling prices.
But once every fifty years or so, commodity prices explode out of the normal pattern, driven first by real demand, then by investment demand and finally by speculative demand.
In the last 150 years, that’s only happened three times. And now it looks like it’s happening again.
From what I can tell, the past few years were just Phase I of this commodities supercycle. And now, it looks like we’re starting Phase II, when many of the big homeruns will be hit.
The biggest slugger of them all: Canada — the country where cub-sized companies are finding giant-sized deposits of gold, uranium, coal, oil and more, greatly outperforming their Yankee competitors.
Indeed, Canadian small-caps have been running rings around the S&P 500.
Over the past three years, the S&P 500 is up 33%.
Meanwhile, the Toronto Exchange’s Venture Composite Index rocketed 116%, triple-outperforming the S&P — and more!
What’s driving this superlative outperformance? In addition to the extra leverage small caps naturally give you in a rising market, the Canadian small caps are also powered by the commodity boom.
Commodities account for 35% of Canada’s exports and an even larger share of the best-performing stocks in this index, a key factor helping it to zoom higher at over three times the pace of the S&P 500.
Canada’s strategic positioning to serve customers in the U.S., Asia and Europe ... top-notch transportation system ... deepwater ports ... modern technology … all work in its favor.
Canada’s relatively firm currency, stable government, and modern banking system also make a huge difference — both as an environment for running first-class business operations and as a magnet for prime-time investment capital.
The biggest source: The United States.
posted by Karl Ortenburg @ 10:38 AM
6 Comments:
Canada? Absolutely!
Canada is easily the strongest, most stable, natural resource nation in the world today.
In Alberta, Saskatchewan, British Columbia and beyond the Arctic Circle, Canada has massive deposits of coal, uranium, oil, and other vital resources, with more waiting to be discovered. And Canada is already cashing in.
In September, while the U.S. recorded its worst trade deficit in history, Canada has just reported its fifth best surplus in history.
Canada’s biggest trading partner is the United States. But China is coming up fast. Last year alone, Canada’s trade with China jumped 50%. And at $15.5 billion, trade with China is just beginning to take off, fueled by the rising Chinese demand for Canada’s natural resources.
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