Free Issue No. 08 as of 09.04.2020
What a rollercoaster ride for mining stocks. On average, mining stocks have lost 50% of their value since the end of February. Some of this loss has been recovered. Many market participants believe that mining stocks as well as gold and silver are a good protection against a market crash. As has been proven once again, this thesis is only partially true. The precious metals and mining stocks have been sold off just like all other sectors.When there is panic in the market, fundamental data does not matter. So the baby is being thrown out with the bathwater.
As mentioned, it is quite possible that we are currently seeing a technical countermovement in mining stocks. Once this countermovement is complete, we could be facing lower prices once again. However, we see this as a historic buying opportunity, because mining stocks are already a buy from a fundamental perspective. Mining stocks act like a lever on the price of gold and silver . In the long term, we expect significantly higher prices for the precious metals. A similar scenario was observed in 2008. At that time, mining stocks fell massively along with the market as a whole before staging a brilliant rally.After the sell-off, mining stocks saw their prices triple on average over the next three years, while the SMI "only" rose by just under 60%.Once things settle down a bit on the equity markets, mining stocks should rise like a Phoenix from the ashes along with precious metals. We cover this sector with a fund and provisionally assume a profit potential of around 120% here.
Further details on the recommended product can be found in the premium issue of WIRTSCHAFTSINFORMATION.