Issue link: http://resourceworld.uberflip.com/i/99312
AT THE M AR K E T Ro d B la ke 2012 – Forget about it Greece, Spain, Italy, austerity programs, Europe in recession, China's slowing growth, the US Presidential election and now fiscal cliffs. These are just some of the many key words that not only defined, but dominated the performance of stock markets in 2012, and in my opinion, held the resource markets down to depressed levels. In my view, 2012 was a frustrating year in that I can't remember when so many potentially earth-shattering events dominated the headlines to the point that it took the life out of the markets and, in particular, junior resource markets. It seemed that every rally in the resource sector was quickly snuffed out by the talking heads telling investors that the world was closer to falling into an economic abyss. Resource stocks and resource plays, by their very nature of developing something for the future, require a positive outlook for the future to succeed. Why invest in the resource sector if the media keeps telling us that the biggest economic calamity since the Great Depression is only a day or two away? Without an overall sense of confidence, the resource sector, and its largest trading platform, the TSX Venture Exchange, spent pretty much all of 2012 just looking for somewhere to hide. That said, I'm optimistic for the resource market in Q1 2013. Not only are the first three months of the year traditionally the best for resource stocks, but the prices of the key commodities are well off their lows for the year and, in some cases, are reapproaching their yearly highs. Gold and silver prices are still reasonably high and copper is rising, perhaps being spurred on by the recovering US housing market – now only a few cents below its 2012 high of US $3.99/lb set last February. All of this while the TSX Venture Exchange has fallen by some 500-points from its 2012 high and has been bouncing along a bottom near the 1,200 level. Resource stock prices are depressed, but the underlying resource prices, (save for uranium, which seems to forming a bottom above US $40/lb), are trending higher and suggesting that maybe the pundits with their never ending negative bias, might have it wrong. As frustrating a 2012 has been, now is not the time to give in to this depressed market, unless of course, you're one of the lucky few requiring tax loss selling to offset capital gains. No, now is the time to position ourselves for what may be a surprisingly good first quarter for resource stocks because, if history repeats itself and resource prices continue to improve, and the fiscal cliff is avoided, then TSX Venture Exchange may be quite a few hundred points higher by the end of March 2013. And what of 2012? I think Donnie Brasco said it best – "Forget about it..." 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 604-643-7567 or rod.blake@canaccord.com TSX : V.DMI OTCQX : DMIFF Strategic Alliance with World Famous Tiffany & Co. Near-Term Producer of Quality Diamonds www.diamcormining.com 36 www.resourceworld.com TEL: 250-862-3212 #630 – 1620 Dickson Avenue, Kelowna BC Canada V1Y 9Y2 DECEMBER 2012/JANUARY 2013