David Skarica: Don’t Become Complacent With Stock Markets This High
Gold stocks declined in the November-December period as David expected. There has been a very defined downtrend since summer which should change soon- and the market may be setting up for a rally. The dollar has recently dropped, and as a result other currencies such as the Canadian and Australian dollars have rallied a little.
Gains in recent days in the uranium market have been significant. Japan is again seeing the need for nuclear power as it has a limited natural resource base. If oil prices rise, alternatives like Uranium and renewable become more competitive. David thinks uranium stocks are in a long term secular bottom. In just a few years many of them should be worth multiples of the current prices.
Markets may move down soon which may include mining stocks. Any such decline should be short lived and turn bullish. David is concerned about the potential for a big debt crisis which could cause a short term deflationary bout, but it may be a great buying opportunity. Commodities will most likely rally into that deflationary period first and be similar to 2001/2002.
Stock markets are over priced and he thinks that we are close to a blow-off top. He suggests going to cash, or being aggressive by purchasing low priced stocks combined with some short positions of overvalued stocks as a hedge. David feels investors should be looking at precious metals over the next six months and cautions not to become too complacent with the markets being this high.
Trump may have difficulty with infrastructure spending due to Republican opposition. China’s economy is still the driving force for commodities and metals. Be wary of iron ore as there is a large supply glut. Many shipping stocks have rallied on news of Trump’s election, and have come back down. He much prefers gold and precious metals at this time, and recommends acquiring positions for the next bull run.
Special invite to join us in Belize February 15th-19th at the Palisade Real Asset Investor Conference with keynote speaker David Cates who is CEO of Denison Mines and Uranium Participation Corp. For more info email [email protected]