3 Top Sectors for Speculation (not gold)
We’ve talked a lot recently about the day-to-day moves in the market.
That’s been crucial in a year like we’ve just had — where the VIX ranged between 11 and 82 and oil went into actual negative territory before inflating quickly to end the year.
These short term moves are important. They create entry and exit opportunities, especially when volatility is so high and prices are moving in such wide ranges.
But short term isn’t everything.
I can trade, sure. It’s not my favorite thing to do. But I can sell gold stocks when they stop inversely correlating with the dollar. Or get into a SPAC ahead of it de-SPACing. (God, this bubble has given us some great terms and names. I’m looking at you, shitcoins.)
But in my experience, my biggest gains and dollar returns have come from speculating on long-term trends with leverage. That leverage can be warrants, or it can simply be getting in very early on small companies that can give you torque to trends.
Glad you asked.
Let’s look at a few that are currently still playing out…
What money managers and “expert” advisors have never told you is that gold lives, breathes, and moves in cycles.
This simple indicator reveals where we are in that cycle — and what to do right now — in clear-as-day context.
And it’s flashing “BUY” right now.
One trend I was extremely early to, going all the way back to buying BYD Auto (HK: 1211)(OTC: BYDDF) back in 2008 — a decade before the Tesla hype.
I made readers more than 1,400% by getting them in early on Lithium X, which was acquired by a Chinese firm. Hundreds more percent from Millennial Lithium. Now, Orocobre is starting to move, which I and readers have shares of because of the acquisition of Advantage Lithium.
Currently, I’m up nearly 150% on Critical Elements Lithium (TSX-V: CRE)(OTC: CRECF), which is developing a spodumene project in Quebec.
This trend isn’t going anywhere, and in fact seems to be gaining speed as a new administration comes in and battery costs continue to come down.
Bloomberg reported two weeks ago that the average price per kilowatt-hour for a lithium-ion battery pack has fallen to $137 from more than $1,000 a decade ago. At $100, batteries become on par with gasoline engine costs, which is widely expected in the next few years.
Those short-term advancements will continue to drive my long-term investments.
Readers of mine made a small gain this year by buying a real estate investment trust (REIT) fund in the summer and selling it earlier this month.
In the short term, real estate as a stock market sector has started to cool off.
But if you’ve been trying to buy, sell, or refinance a house, you know the real estate market is hot as ever.
It’s taking four months to refinance loans because underwriters are swamped and everyone is working from home, further gumming up the process.
Meanwhile, houses are selling in mere hours in many markets, with tales of multiple offers coming in above listing now common. The “thanks for the smooth closing” Instagram posts by real estate agents are the epitome of confusing a bull market with brains.
But the gains are real.
One way I’ve speculated on this trend is with a company called RESAAS Services (TSX-V: RSS)(OTC: RSASF), which has evolved into the world’s largest real estate technology platform. It provides a platform for real estate agents to get and share referrals, listing, and leads — and to get paid their commissions for doing so.
With so many houses being sold so fast, many even before they’re listed in so-called “pre-listing” or “pocket listing” sales, this has become a valuable tool and many realtor associations are encouraging or requiring their member agents to use RESAAS.
The company has also started selling instant COVID-19 test kits so open houses can still be held with every entrant tested at the door with immediate results. You can buy some for yourself if you want. I certainly did.
And it also offers coaching classes to help agents close more sales.
Shares of RESAAS are up 130% this year as a result.
One major bullish trend of the past five years has been biotech stocks. Over that duration, the SPDR S&P Biotech ETF has outperformed the S&P 500 by a factor of two.
I have harnessed extraordinary gains this year in this sector with a speculation on ImmunoPrecise Antibodies (TSX-V: IPA)(OTC: IPATF).
ImmunoPrecise is in the business of providing antibody-producing cell lines in mouse, rabbit, and other animal platforms, as well as being able to humanize them.
These antibodies are the building blocks of today's immunotherapies — a new class of drugs that use the body's own immune system to kill diseases. Antibodies attach themselves to disease cells and serve as markers that tell the body which cells to attack.
Antibody companies, in particular, have done exceedingly well given that many of the world’s best-selling drugs are now antibody-based immunotherapies. Think, Humira.
But the key is finding the right antibody to do the trick. That's where ImmunoPrecise comes in: it can make antibodies designed to attack a specific target. And that is particularly valuable when there is a global pandemic.
So while I originally speculated on ImmunoPrecise as long-term play on antibodies, the short term surge of biotech stocks this year, coupled with its involvement in discovering COVID-neutralizing antibodies, has sent shares many multiple higher.
ImmunoPrecise was one of the first private deals I ever did, initially funding the shell it went into at a pre-consolidated C$0.05, and then getting readers into the C$0.30 listing round when I was more confident in the opportunity. Shares have consolidated 5:1 in order to list on the NASDAQ, which happens at the end of 2020.
As of today, shares were as high as C$26.48.
During past gold bull markets the high end of “average” stock returns is 1,200%.
But there are unique and proven strategies our experts use to leverage those gains by 3x, 5x, and even more…
The golden window to harness that kind of rare and life-changing upside is now wide open. But it closes a little bit each day the gold bull market continues.
That makes gains from the shell level as high as 10,492% and gains from the listing round as high as 1,665%.
Why do I tell you this?
Because none of these examples are resource stocks. And soon, we’ll be bringing you new tools to up your investing game across the entire market.
And also because when I speculate on resource trends, I always confer with Gerardo on the best ways to leverage it.
We’ve spotted a new trend in the gold space. And in the next few weeks we’ll be bringing you new info on how to position for it for the long-term. Keep an eye out for it.
Call it like you see it,
Publisher, Resource Stock Digest
Nick Hodge is the co-owner and publisher of Resource Stock Digest. He's also the founder and editor of Hodge Family Office, Family Office Advantage, and Foundational Profits. He specializes in private placements and speculations in early stage ventures, and has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world.
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