Where are we in the Cycle?
Of the five PortfolioDirect cyclical guideposts, two are flashing ‘amber’ and three have turned ‘red’. Sluggish pre-pandemic productivity growth, now exacerbated by war in Europe, intensifying trade restrictions and reversal of the post-2020 central bank liquidity surge, has re-emerged as a constraint on raw material demand expansion. Chinese growth momentum has been on a weakening trend. A rising US dollar, one previously overt negative factor, has stalled after a modest reversal of prior gains.  Metal market supply anxieties have become less severe. The cyclical positioning has been characterised as a ‘downswing’ phase.       More...

Market Directions
Withdrawal of unprecedentedly supportive monetary and fiscal conditions and erosion of the value of income and savings by surging inflation have stemmed speculative capital flows connected to retail investors. Professional money, by continuing to discount a recession, has provided some market relief but surging costs of capital are placing a cap on equity values.  While heavily hyped energy storage innovations are stoking sector interest, they are yet to affect metal demand meaningfully. Metal price risk premiums have risen without correspondingly beneficial impacts on related equity valuations.  New tax incentives are diverting capital for mine development and downstream processing capacity to sponsoring nations. Persistence of a 1990s-style investment performance - when modest sector equity price gains occurred in the midst of sometimes highly disruptive macro conditions - remains the underlying theme.    More...

Portfolio Performance and Positioning
Very early signs of cyclical recovery among some of the most heavily discounted Phase I stocks have lifted returns but have been insufficiently strong to overcome the dearth of discovery success and ongoing macroeconomic constraints on capital flows.  Capital preservation efforts are now hindering the chance of discovery-led returns uncorrelated with market conditions. Phase I returns would likely display the greatest leverage to an eventual monetary policy easing.  Although further along the development path and closer to profitability, Phase II companies carry risks arising from relatively high indebtedness and heavy reliance on execution success in sometimes unfamiliar markets and untested management.  Performance within the Phase III category is more likely to be driven by capital allocations responding to longer term views of changing macro conditions and cross sector valuations, both primary concerns of institutional fund managers.   More...

Stock Reviews and Rating Analysis 
PortfolioDirect rating reports analyse the quality and risk attributes of proposed mineral developments.  Rating criteria apply to mining and oil and gas stocks at any stage of development.  PortfolioDirect uses a five point rating scale to measure the risk adjusted quality of proposed mineral developments or companies.    
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The 'Steak or Sizzle' blog provides summary judgements on the top performing ASX-listed resources stocks. More...