Somewhere near $100 trillion dollars was clipped from the global stock, real estate and commodity markets in 2008. It was a year for the record books, not in a positive fashion unfortunately. Where exactly can you make outstanding money in the aftermath of all this carnage?

I’m leery of the stock market in general and the current bounce was fairly easy to predict. There is no foundation present for a long-term bull market in stocks. Exactly the opposite, in fact.

We’re not out of the woods in the real estate sector either. More foreclosures are coming in the residential market and commercial real estate is joining the scrap pile. Bank collateral is directly in the crosshairs.

How about commodities? It’s a mixed bag here as some are doing considerably better than others. Base metals, including copper, are showing signs of life, but they still make me a bit nervous. A global economic boom remains years away. The resources that continue to excite me are gold, silver, uranium and oil. Natural gas used to be on that short list but the economic slowdown has dealt it quite a blow. It has likely bottomed.

Here’s the present rub. Small resource exploration stocks were absolutely decimated in 2008. They were sold off with little consideration for long term merit and you would be hard pressed to find a more damaged sector. Many companies won’t survive.

This presents quite the opportunity. My Resource Windfall Speculator advisory focuses largely on tiny resource stocks and we took a beating in mid-2008. On the other hand, there has been quite the stealth bullish move in many of these shares since October of 2008.

I’m not good at patting myself on the back, but the record clearly shows twelve out of the last thirteen stock recommendations are up right now. Hecla (HL: New York), for example, is a big silver producer that was recommended last November amidst the turmoil. Subscribers subsequently booked 130% profits in fairly short order. We are now back in Hecla and showing profits again as the new position is up around 75%.

Money compounds very quickly in such a manner.

These twelve profitable positions are diverse: the stocks represent gold, silver, uranium, oil, natural gas, and positions that move contrary to the US Dollar and long-term Treasuries. We look for long term fundamentals.

The point is that there are extreme opportunities remaining in select commodities. Not many sectors will provide gains sufficient to “get well” after the portfolio meltdowns last year. Resource stocks are notoriously volatile and that volatility can work in your favor.

Shockingly, resource stocks are still very much oversold and have a lot of running room yet ahead. Gold, for example, has been performing admirable this entire decade with annual gains averaging around 15%. You wouldn’t know it by looking at the recent action of the tiny gold shares:

At times gold outperforms the gold shares and at other times the shares outperform the metal. The above chart shows that the small resource shares, as represented by the Canadian S&P Venture Index, remain in orphan status. They are priced as though gold was closer to $500 than the present $925. Watch for the shares to resume normal performance and actual leverage relative to gold … they are set to break through the 50-day moving average (blue line) as well as the 200-day moving average (red line).

Jon Herring recently wrote an excellent article highlighting the case for a long-term gold bull market. I couldn’t agree more and my Resource Windfall Speculator holds at least fifteen gold related companies of various sizes. That is the clear emphasis as gold is going much, much higher directly because of ongoing monetary debauchery. The shares are going to fly as gold breaks through $1,000 and heads towards $1,200. That’s all it will take and I expect that to happen this year. It will be game on again.

I do have a gold stock selection for your consideration. ATW Gold (ATW:Toronto, ATWGF:US) recently started a gold mining operation in Australia and is planning on opening a second mine next year. This is a well managed and aggressive team that tends to get the job done. Check out their website (http://www.atwgold.com/) and do your due diligence if you have the speculative temperament required for these small cap gold companies. Buying ATW at or under $.70 (Canadian!) is a reasonable entry point. This is the type of company that can embark on a multiplication pathway.

Should you be fortunate enough to get a double in ATW or similar stock you would be wise to take half the trade off the table (your initial capital) and let the rest ride.

Select commodities are set to outperform for years and years.

Invest Resourcefully,

Rusty

P.S. I have brought three particular speculative stocks to your attention since December 2008. Riverside Resources and International Royalty Corp were mentioned over the holidays (link What’s in Your Stocking). They are up 50% and 100% respectively. Let’s see if ATW will follow in those footsteps. All three stocks can still be purchased as they have lots of room left to run.