“A Multi-Year Rally in Mining Stocks Could Be Starting Now”…
That was my headline exactly three months ago in DailyWealth.
[ad#Google Adsense 336×280-IA]In that essay, I wrote: “Mining stocks have crashed 64% in the past 18 months. We’ve only seen declines that extreme three other times since 1974. And each of those led to massive returns.”
To be specific: “The average three-month return was 24%. And 77% gains were the average after one year. We’d be foolish to ignore this trend.”
Shockingly, the average gain two years after these big busts was more than 100%!
These aren’t gold stocks that I’m talking about, by the way… These are what I call the “Masters of the Universe” – the global mining companies that control the world’s largest and most coveted mining projects.
When the stock prices of the global mining giants get going, triple-digit gains aren’t just possible… they’re normal…
Let me show you…
Consider the shares of mining giants BHP Billiton (BHP) and Rio Tinto (RIO). Over the last 11 years, these companies have had two major “up cycles” and two major “down cycles.”
As the table below shows, these up cycles led to crazy profits, and the down cycles led to devastating losses. Take a look…
Both of these companies bottomed in mid-January. They’re already up 35% and 34%, respectively. But if history is any indication, you haven’t missed a thing yet…
This could well be the beginning of the next up cycle in global mining stocks – which have been good for hundreds-of-percent gains in the past.
It isn’t just BHP and RIO… The entire global mining sector is moving higher.
The chart below shows the iShares MSCI Global Metals & Mining Producers Fund (PICK). As you can see, we now have a legitimate uptrend. Take a look…
The entire fund is up 41% since its January bottom. This does not mean we’ve missed the up cycle. The price is still down – a lot – from its highs. The strong start this year is a good sign… It could be the start of the next major up cycle in global mining companies.
In my True Wealth newsletter, we bought shares of PICK to capitalize on this.
The story is simple: Honest shots at hundreds-of-percent gains don’t come around often. The global mining sector is giving us that opportunity today. And PICK is my favorite diversified way to play it.
Check it out…
Good investing,
Steve
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Source: Daily Wealth