Wednesday, February 4, 2015
If you're interested in learning how to increase your wealth by three or five times over the coming years, today's essay is for you...
Increasing your wealth that much in a few years might sound absurd. But it's possible in the business of finding and tapping the world's gold, copper, oil, diamond, and uranium deposits.
More than any other sector, natural resources can produce gains of 100%, 300%, or even 500%. It's a business where just one big strike can change your life forever.
It can take years to find the right setup to achieve these types of gains.
But as you'll see, that's exactly what we have today...
Regular Growth Stock Wire readers are familiar with the natural resource market's cyclicality. You see, natural resources go through huge cycles of boom and bust.
One year, an asset will skyrocket 200%... The next year, it will plunge 50%. After plunging, it might drift sideways for a year and then rise 300%.
Consider the case of uranium from 2000 to 2008...
Uranium is a natural resource whose chief use is fueling nuclear-power reactors. For much of the 1990s, prices were mired in a bear market. Excess supplies from the previous years' depressed prices.
Low prices meant no one was investing in new uranium deposits. There simply wasn't any money in it. In 2003, for example, it cost miners $20 per pound to mine uranium, but they were selling it for $15 per pound. Miners were losing about $5 on every pound of uranium they produced. Mines closed, and no new ones opened.
It was grim – a classic "bust."
Then... after years of bust... we started seeing increased demand for the cheap fuel. But the lack of investment in new uranium projects meant supply was limited. Increased demand and low supply pushed uranium prices higher and higher... and uranium eventually climbed to $140 per pound – almost 10 times higher than 2003's depressed levels.
You can imagine what that kind of rise does to the share price of companies in the sector...
For example, shares of uranium explorer Mega Uranium went from $0.04 in September 2003 to $7.41 in April 2007. That's an amazing 18,425% return.
It's not just uranium. This happens all the time in natural resources. Oil, natural gas, nickel, copper, platinum... you name it. Commodities boom and bust like crazy... taking shares of natural resource stocks with them.
But to make the huge gains, you have to buy these assets when nobody wants them. This is when assets get extremely cheap. Going against the crowd in these situations will give you a sick feeling in your gut. But that's a sign that you're probably doing the right thing. When the crowd wakes up to the boom times that follow the bust, they'll bid up your shares to incredible heights.
Take 2009, for example. Back then, resource stocks were coming off one of the worst bear markets in their history. At the time, the world was recovering from the 2008 credit crisis. Resource stocks fell more than 80% during the tough times. Since people were reeling from the crisis, no one wanted anything to do with natural resources.
But in 2009, I urged Stansberry Resource Report readers to buy elite silver company Silver Wheaton. We made 345% in a year and a half. In the November 2009 issue of my publisher's former micro-cap service, Phase 1 Investor, I urged readers to buy junior miner ATAC Resources, which soared 597%... my biggest win to date.
Right now, we're seeing another one of these situations. Nobody wants small (or junior) mining stocks. The sector has been in "bust" mode since 2011. You can see this in the S&P TSX Venture Index chart below. (The TSX Venture Index tracks the price of hundreds of small energy and mining firms.) The Venture Index has lost more than 70% of its value since 2011.
We saw similarly low prices and negative sentiment back in 2001 and 2009. And after each of these times, the Venture Index rocketed higher over the next few years, and many individual resource stocks rose more than 1,000%. We could see junior mining stocks repeat that performance over the next few years.
In short, we have a tremendous opportunity in junior miners today. As my colleague Dr. Steve Sjuggerud likes to say, small junior miners now have the three hallmarks of a great contrarian trade. They're cheap and hated... and after bottoming in mid-December, they appear to be just starting an uptrend. Hundreds – even thousands – of percent gains are possible over the next few years. I urge you to look into investing in this sector today.
But keep in mind that investing and speculating in natural resources can be incredibly risky. Most investors who deal in this sector are constant losers. That's why you have to know what you're doing.
If you want to learn all the ins and outs of profiting from the natural resource sector, I urge you to read my investor report, "How to Make Extraordinary Returns in the Junior Resource Rebound." By taking just a few minutes to read this report, you'll learn how to master the natural resource market. You'll also learn about the five small resource stocks that are best positioned to rise hundreds of percent over the next few years. To find out how to access this report with a trial subscription to the Stansberry Resource Report, click here.
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