Where are we in the Cycle?
Of the five PortfolioDirect cyclical guideposts, three are flashing ‘amber’ and two have turned ‘red’. Sluggish pre-pandemic productivity growth, now exacerbated by war in Europe and central bank anti-inflation measures, have re-emerged as constraints on demand expansion. The post-2020 central bank liquidity surge is being reversed, with an increasingly evident effect on bank solvency and capital availability.  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 conditions and erosion of real incomes by surging inflation have stemmed speculative capital flows connected to retail investors. Professional money, by continuing to discount a recession, provides some market relief.  While heavily hyped energy storage innovations are stoking sector interest, they are yet to affect metal demand meaningfully. Fears of market disruption due to geopolitical rivalries have raised metal price risk premiums without correspondingly beneficial impacts on related equity valuations.  New tax incentives are encouraging relocation of mine development and downstream processing capacity. 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 development categories turned negative in the past week with falls of similar magnitudes. Volatility derived from uncertainty about market liquidity, driven by central bank policies, remained evident.  Phase I stocks were among the strongest and weakest performers, as they have for the past several weeks.  Phase I returns remain the most threatened by weaker speculative capital flows, and would be a primary beneficiary of any policy easing, but continue to deliver value-enhancing discovery opportunities uncorrelated with market conditions.  Although further along the development path and closer to profitability, Phase II companies carry risks arising from their indebtedness and heavy reliance on execution success in sometimes unfamiliar markets.  Performance within the Phase III category is more likely to be driven by institutional allocations responding to changing macro conditions.   Portfolio models remain biased to the Phase I stock category with cash positions reflecting the cyclical risks.   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...