Where are we in the Cycle?
Of the five PortfolioDirect cyclical guideposts, four are flashing ‘amber’ and only the Chinese growth momentum remains ‘red’, representing a modest improvement in overall cyclical conditions. Sluggish productivity growth, exacerbated by war in Europe, intensifying trade restrictions and central bank efforts to quell inflation, have been a continuing constraint on raw material demand expansion.  Global monetary conditions are slowly becoming less restrictive. US dollar strength has been removed as one previously overt negative factor.  Metal market supply anxieties have become less severe. The cyclical positioning is consistent with a nearing change in direction.   More...

Market Directions
Capital flows connected to retail equity investors remain constrained by the continuing impact of inflation on household savings and income. Professional money, by continuing to discount a recession, has provided market relief for the most growth oriented and well-established businesses.  Heavily hyped energy storage innovations are yet to affect metal demand as meaningfully as once expected.  Nor have higher metal price risk premiums, where evident, 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
The end of year seasonal relative strength carried into the first days of the new year but the gains were minimal, consistent with a period of weakness which had began two months earlier.  For 2024 as a whole, the model return was a loss of 9.9% against a reversal in the benchmark of 18.9%. Despite the adverse global setting and a continuing dearth of discovery success, Phase I stocks remain the most likely beneficiaries of  lowered inflation and easier monetary conditions, especially if replicated in Australia. Companies in the Phase II development category remain a drag on investment performance, despite demonstrable production potential and potential proximity to profits, due to risks arising from relatively high indebtedness and heavy reliance on execution success in sometimes unfamiliar markets and untested management. The Phase III category is the most sensitive to capital allocation decisions among institutional fund managers responding to changing sector valuations and relative macro growth expectations.    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...