Issue link: http://resourceworld.uberflip.com/i/113113
AT THE M ARK E T Rod B la ke Be wary of sweeping predictions I���m not sure why it is, whether it���s their ego or a very biased interest, but every now and then someone or some entity, usually a sector expert or media outlet, makes a sweeping prediction, to the investment community, that a certain sector or security is destined to reach new unheard of heights or disastrous lows. These sweeping statements usually come after the underlying sector or security has already made a major move either to the upside or the downside. In other words, the investment is a well-known story and the easy money has already been made or lost, but the ���talking head��� seems compelled to state that the best or worst is yet to come. The other curiosity is, once these game changing statements or projections are made, the underlying sector or security, instead behaving as the pundit has predicted, seems to mark a major turn to the opposite direction. That is, instead of going to unheard of new heights or depths, the investment makes a dramatic turn back to normalcy. Some may remember a few years ago, when the media predicted that the US housing market was destined to reach great new heights. More recently, when Apple 36 www.resourceworld.com Inc. [AAPL-NASDQ] shares touched US $700 last year on the launch of their game changing iPad, Jefferies & Co. predicted the stock was destined for US $1,000 while Research in Motion, predicted that Blackberry [BB-TSX; BBRY-NASDQ], could not compete and would have to put itself up for sale or merger in order to survive. Well, we all know now that the US housing market has, for lack of a better word, ���corrected���, and that Apple���s stock, instead of going to $1,000, is now trading closer to US $475, while BlackBerry, rather than going to zero, has just launched its updated Z10 smartphone and is now trading back up to the $15 level. I mention the above examples because another investment house, Credit Cuisse, has just issued a report titled ���The Beginning of the End of an Era��� that argues that the price gold bullion is destined to move lower, and that investors may want to exit that sector. Granted, the yellow metal has so far failed to take out the record high of US $1,924 an ounce it established in September, 2011, and gold stocks have definitely underperformed their peers ��� but the end of an era? I think not! Rather, I would suggest that based on the outcome of previous sweeping predictions, that instead of exiting gold and gold stocks, investors may want to do just the opposite. n Rodney Blake is an Investment Advisors with Canaccord Wealth Management, a division of Canaccord Genuity Corp, Member-Canadian Investor Protection Fund. The information contained in this article is drawn from sources believed to be reliable, but the accuracy and completeness of the information is not guaranteed, nor in providing it does Rodney Blake, Canaccord Genuity Corp, or its subsidiaries, or affiliated companies, assume any liability. This information is current as of the date appearing in this article, we do not assume any obligation to update the information or advise on further developments relating to these securities. This article should not be considered personal investment advice or a solicitation to buy or sell securities. Canaccord Genuity and holdings of its respec-tive directors, officers and employees and their associations, from time to time may buy or sell any securities mentioned herein. The views expressed are those of the author and not necessarily those of Canaccord. Rodney Blake can be reached at 604643-7567 or rod.blake@canaccord.com MARCH 2013