Tax loss season
Just a very short note to say that we are now heading into tax-loss season, when numerous investors in North American markets, whether institutional or private, sell down their losers in order to realise a loss, which they can then off-set against gains elsewhere in order to reduce their tax liabilities.
The result is that stocks that have performed badly can get really beaten up. That means just about every type of resource stock outside of the energy sector is likely to see some persistent selling over the next fortnight.
It’s also an opportunity for bargain hunters.
With that in mind I urge you to take a look at my shopping list of a couple of weeks ago entitled Best In Class, in which I identified what I consider to be the best plays on several commodities - my best gold play, my best nickel play, my best platinum play and so on.
It’s likely that there will be opportunities to pick up some of them on the cheap over the next fortnight.
My experience is that prices often reach their final low two on the final Friday of trading. As but as Christmas comes on a Sunday this year, that would be Friday 23rd and I rather suspect trading will have pretty much drawn to a halt by then.
I am therefore targeting the Friday 16th to Wednesday 21st December window.
Sometimes you can see a significant return in a fortnight. The selling stops and funds reposition at the beginning of the new year.
The strategy does not always work. 2020-21 was one example. But sometimes it can work really well - 2015-16 springs to mind. 2013-14, 2014-15 and 2016-17 are all examples of years that it worked well.
I’ll be putting out an updated shopping list later this week for paid subscribers. In addition, I am just finalising my report on helium, also for paid subscribers. There will also be a report on uranium. So keep your eyes peeled.
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Disclaimer: I am not regulated by the FCA or any other body as a financial advisor, so anything you read above does not constitute regulated financial advice. It is an expression of opinion only. Resource stocks are famously risky so please do your own due diligence and if in any doubt consult with a financial advisor. Markets go down as well as up. Especially junior miners. I do not know your personal financial circumstances, only you do, but never speculate with money you can’t afford to lose.