I’m no math wizard but I know enough to not buy state sponsored lottery tickets. Your odds are much better when you buy your tickets via the natural resource sector where you can stack the deck in your favor and make life changing money.

Small cap resource stocks have been absolutely trashed over the last 12 months. Many companies are running out of cash as well as credit and some are closing their doors. It’s Darwinism at its’ finest. The strongest companies, those with world-class management, strong balance sheets, and access to capital will survive and prosper. Those with little cash on hand, shaky prospects, and inexperienced management will disappear.  And now is the time to take positions in the most promising leaders who are positioned to directly benefit from the ongoing financial chaos.

A merger and acquisition mania is now underway. Take a quick look at some recent announcements:

• Canadian Gold Hunter (CGH:Toronto) is taking over Sanu Gold (SNU:Toronto).
• ATW Gold (ATW:Toronto) is merging with Kinbauri Gold (KNB:Toronto).
• New Gold (NGD:US) is combining their business with Western Goldfields (WGW:AMEX).
• IMA Exploration (IMR:AMEX), Kobex Resources (KBX:Toronto) and International Barytex (IBX:Toronto) are working on a merger.
• Linear Gold (LRR:Toronto) recently acquired GLR Resources (GLR:Toronto) Goldfields Project.
• Geoinformatics Exploration (GXL:toronto) is acquiring Rimfire Minerals (RFM:Toronto).

This is just for starters. The primary point I’m making is that M & A activity is on a massive upswing. This is rapidly changing the complexion of the sector and creating fabulous opportunities for investors.

This environment is ideal for selecting and riding the best run companies as the precious metal bull market continues to unfold. The companies leading the charge in this consolidation will emerge from this process stronger than ever. There are numerous advantages for shareholders:

• A superior management team typically results.
• Synergies are created.
• Overhead costs are lowered.
• The portfolio of properties and projects are increased which improves company diversification.
• More dollars are allocated for the most promising exploration targets.
• Larger companies attract the buying power of heavyweight financial institutions.

“Super Juniors” are being created. Companies with cash are marrying companies with exceptional projects in need of funding for advancement. Producers are gaining access to more reserves. Key technologies are being shared. These are clearly win-win situations.

We have long been acquiring the companies acting as resource consolidators in my Resource Windfall Speculator advisory. They are snapping up distressed bargains across the globe. Cash and connections are tough to beat these days.

Yes, size does matter. So does staying power. Personal fortunes will be made by savvy investors who now hitch their wagons to the talented and aggressive management teams constructing companies that will grow and dominate in the coming years and decades.

There is nothing quite like owning an un-expiring lottery ticket!

Invest Resourcefully,
Rusty

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? Read the full story

If you’re concerned about rising inflation then you may want to think about investing in natural resources. Timber has been an attractive investment for thousands of years and is one of the best inflation hedges available.

It’s really easy to invest in timber too. You don’t have to go out and plunk down a few million dollars to buy a tree farm. You can simply buy stock in a company in the timber business! As timber prices go up, your stock price goes up! It’s that simple. Read the full story

After last week’s FOMC meeting, the Federal Reserve announced that it will purchase up to $300 billion in treasury bonds over the next six months. This is all part of their effort to revive the housing market. Purchase long-term bonds, drive interest rates down, drive mortgage rates down and maybe just maybe real estate buying will start to improve.

But I have a question. Where is the Fed getting this $300 billion? China has pretty much said that they are considering dumping some of the U.S. debt that it holds and issued a warning against devaluing the dollar. China holds close to $750 billion in U.S. Government debt already and were still adding last month when they added another $12 billion. Holding that much debt in one entity, even if it is the U.S. government, is not a sound investment strategy. Read the full story