The Deflating Stock Bubble Will Fuel A Bull Move Mining Stocks

The Deflating Stock Bubble Will Fuel A Bull Move Mining Stocks from Investment Research Dynamics

“The economic and financial condition of the U.S. and global economy is similar to that of 2008, although I think now it’s a lot worse than it was back then…the ‘gravity’ of true fundamentals has finally gotten ahold of stocks…”

Fundamentals ultimately drive value.  In terms of the fundamentals, financial assets – stocks, bonds, real estate – are extremely overvalued.  The precious metals sector right now is extremely cheap relative to fundamentals.

Don’t be fooled into thinking that the stock market bounce that started the day after Christmas was the end of the “bear market,” as Jim Cramer is asserting.  Bear markets last a lot longer than four weeks.  A bear market in financial assets is just getting started.  At the same time, the bull market cycle in gold, silver and mining stocks that began in late 2015 with a 250% run-up in GDX over the next 8 months  is ready to resume after using just over 2 years to effect a 38% pullback from the sharp in 2016.

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Dave Kranzler

I spent many years working in various analytic jobs and trading on Wall Street. For nine of those years, I traded junk bonds for Bankers Trust. I have an MBA from the University of Chicago, with a concentration in accounting and finance. My goal is to help people understand and analyze what is really going on in our financial system and economy. You can follow my work and contact me via my website Investment Research Dynamics. Occasionally, I publish on Seeking Alpha too. As a co-founder and principal of Golden Returns Capital, LLC Mr. Kranzler co-manages the Precious Metals Opportunity Fund, a metals and mining stock investment fund.