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. A rising US dollar, one previously overt negative factor, has stalled after a modest reversal of prior gains.  Supply side constraints in metal markets 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
Performance diverged with large gains among Phase III companies offsetting comparable losses among the earliest stage companies. Explorers have continued to lose ground with too few success stories to attract retail capital. Phase I returns remain the most threatened by constraints on speculative capital flows attributable to macro conditions.  The same companies would likely display the greatest leverage to an eventual monetary policy easing and may also deliver value-enhancing discovery opportunities uncorrelated with market conditions prior to any policy shift.  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...