Well we are in a MIGHTY BEAR MARKET and have been there for four years already.We can only reach this conclusion with hindsight.No wonder it has been so difficult to automatically make a profit!Taking the top 40 since November 2007,the capital loss on Anglo is -27% Amplats -42%,Billiton a measly 13% gain.Most of the other top 40 and second teir shares outside these showed a loss,dividends were cut or reduced to token amounts.Of course there have been mini runs in this time and some shares defied these circumstances such as Exxaro +80%,Kumba+100% SAB +56%. For a change to really occur countries will have to find answers to remaining really solvent and create growth opportunities.
WELL RESOURCE SHARES SEEMED TO TUMBLE IN THE LAST FORTNIGHT ALONG WITH THE DOW.SURELY ONE MUST ASK WHY DID GOLD AND PLATINUM SEEMINGLY JOIN THIS TREND? AFTER ALL THEY ARE SUPPOSED BE A STORE OF WEALTH !
BOTH WENT DOWN BY ABOUT 20% IN VALUE!
THE ANSWER IS ACTUALLY THEY DID NOT FALL THAT FAR AS THE
U S $ STRENGTHENED AGAINST THE EURO BY ABOUT 12% AS MOSTLY ALL RESOURCES ARE QUOTED IN U S DOLLARS. THAT STILL LEAVES A FALL OF 8% OVER THAT PERIOD AS ORDINARY PEOPLE PANICKED,NOT UNDERSTANDING THE MECHANICS AND SOLD PUTTING DOWNWARD PRESSURE ON PRICES.THIS IS THE SECOND TIME THIS YEAR THAT PHENOMINON HAS PLAYED OUT.AS LONG AS NOT ENOUGH IS DONE TO STABILISE EUROPE THIS SITUATION MIGHT CONTINUE
GOLD IS LIKELY TO START INCREASING AGAIN SOON AS TREASURIES YEILD IS LOW AND NOT THAT SAFE.PLATINUM MIGHT TAKE A WHILE LONGER TO INCREASE IN PRICEAS DURING A RECESSION THERE MIGHT NOT BE SUCH A GREAT DEMAND .
I must add that the South African Rand closely follows the Euro as these countries are our main trading partners.