Ted Dixon's blog

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INK Edge August Top Mining & Crypto: Light at the end of the tunnel?

We had a technical problem uploading the INK Edge Top Mining & Crypto Report for August: Light at the end of the tunnel? If you are a Canadian Insider Club member and did not receive your copy via email, please log into INK Chat and pick up your copy in the #stock_ideas-ming channel.

Light at the end of the tunnel for mining stocks?

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- Update: The August Top 20 Mining & Crypto Report is now available here: https://www.canadianinsider.com/club-reports/221

Cloudmark was interfering with our communications to some customers

Further to our earlier post Some email service providers are blocking INK emails, we have identified Cloudmark as the entity that was blocking INK Research email to some of our customers. Some of our community members using Bell, Shaw, and Videotron stopped receiving emails around May 17th. Some members with other email providers and corporate email servers may also have been impacted.

Some email service providers are blocking INK emails

Once again, we have run into an issue where one or more email service providers are blocking our members from receiving some INK research emails. This typically happens because to save money these email providers, often large telecom companies, outsource some aspects of their email management to consulting firms who are motivated to reduce email volumes. There is little cost to them of being over-zealous and restricting even bona fide emails whenever their algorithms hit a trigger.

If this is happening to you, there are two ways for us to try and resolve this situation:

Pricing in the dog days of summer for the dollar

From the INK April Top 20 Mining & Crypto Equities Report - Gold is in the spotlight as we head toward a summer showdown in Washington over the debt ceiling even as the dollar is losing its lustre as a store of value among global central banks.

Cover image of the INK April Top 20: Mel Elias

Meanwhile, the Federal Reserve is now paying the price for its botched inflation strategy as cracks start to form in the US banking system.

Pre-Fed decision flash sale

FLASH SALE: The Federal Reserve is in a corner. If it hikes rates on Wednesday, it risks fueling the regional banking crisis. If it holds rates steady, it risks fueling inflation. Eventually it will have to choose between accepting higher inflation so it can deal with financial stability in the US banking industry or crushing the economy to pursue its misplaced policy of throwing Americans out of work.

Mining stocks are looking good. Image by Omid Roshan.

In my view, it is only a matter of time before Jerome Powell capitulates and chooses higher structural inflation, if for no other reason there is no compelling evidence that higher unemployment will lead to sustainably lower prices, particularly when there are supply-side challenges that still need to be addressed.

Black, white and yellow gold

We are in a market environment where politicians, not central bankers, are setting the agenda. Since the pandemic started, politicians have been writing laws that shower preferred groups with money. One of the more recent examples is the CHIPS and Science Act which allocated US$280 billion to support research and manufacturing of semiconductors in the United States. Perhaps even more importantly, politicians start wars, not central bankers.


The black, white, and yellow gold framework

The INK Edge Outlook process on track to be a winner in 2022

With 3 trading days left in 2022, the rules-based INK Canadian (CIN) Insider Index that employs the INK Edge Outlook process is one of the best performing market indices globally so far this year, up 5.5% on a price basis. If we are to maintain that distinction into year end, a lot will depend on the fortunes of the Energy sector in the final week.

The INK Canadian Insider Price Index December 31, 2021, to December 23, 2022.

The INK CIN Index has just over a 40% allocation to Energy. That allocation was determined by the bottom-up INK Edge allocation process that can vary over time. Five years ago, the Energy sector had only a 10% weight as of the fall 2017 rebalancing.

Gold versus debt-based dollarmania

There is a reason why gold has survived centuries as a monetary asset without paying a dividend. It is nobody's liability.

Gold is debt-free (image: Fuu J)

The broad overhang of sovereign liabilities over the economy is something that many in the modern investment management industry have never had to confront on the scale that confronts us now.

Three signs of a risky mining stock: 2FC

As the world seeks to meet climate change objectives while supply chains adjust to geopolitical risks, we expect basic materials to be in high demand. That should benefit mining stocks and, ultimately, junior mining stocks, depending on the risk appetites of investors at any given time.

Insights: The Fed has gold bugs smiling

Gold investors may have reason to smile if the Fed continues with its tightening ways. Meanwhile, we hear why trying to value layer-1 cryptos like equities could be a mistake.

The Fed smirk could have gold shining

Finally, Canada's net-zero mining champion is our Insider of the Week.


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