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 capital flows connected to retail investors. Professional money, by continuing to discount a recession, has provided market relief for the most growth oriented established businesses.  While heavily hyped energy storage innovations are stoking sector interest, they are yet to affect metal demand meaningfully. Higher metal price risk premiums have not had a correspondingly beneficial impact 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
All three development categories lost ground in the past week with stocks in the earlier development stages facing the largest losses.  A continuing dearth of discovery success to promote investor interest and persistent macroeconomic constraints on capital flows remain drags on performance for the bulk of the sector. Phase I returns would likely display the greatest leverage to 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...