{"id":62160,"date":"2014-10-20T01:43:44","date_gmt":"2014-10-20T05:43:44","guid":{"rendered":"http:\/\/countingpips.com\/?p=62160"},"modified":"2014-10-20T01:43:44","modified_gmt":"2014-10-20T05:43:44","slug":"how-you-could-make-a-fortune-in-resource-stocks","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/10\/how-you-could-make-a-fortune-in-resource-stocks\/","title":{"rendered":"How You Could Make a Fortune in Resource Stocks"},"content":{"rendered":"
October 20, 2014<\/div>
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By MoneyMorning.com.au<\/u><\/a><\/p>\n

Right now, Australian resource stocks<\/strong><\/a> are some of the world’s best bargains.<\/p>\n

Despite the falling price of crude oil<\/a> — and in some cases, because of it — companies in this sector are primed to deliver enormous potential returns.<\/p>\n

But when stocks are attractively valued, your average mug punters are racked with fear.<\/p>\n

They fall for the headlines in the mainstream media — the ones that peddle lies about the sky falling in. <\/p>\n

And they sell at the precise moment when they should be buying.<\/p>

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That’s happening in markets across the world today.<\/p>\n

It’s a shame for the mug punters…but I can’t say I haven’t warned them.<\/p>\n

And as you’ll see, their loss could be your gain…<\/p>\n

Last week I showed you how you could fruitfully invest in today’s bruised and battered Aussie resource sector<\/a>.<\/p>\n

Then, on Saturday, our Resources Analyst Jason Stevenson revealed four energy stocks that are primed and ready to explode<\/a>.<\/p>\n

I’ve never seen Jason as excited as he is right now about this select group of elite stocks.<\/p>\n

Jason is convinced these four firms will offer you a clear path to potential riches once the market gets wind of their plans.<\/p>\n

For example, one of these stocks could be just months away from a huge farm-out deal with a major resource company.<\/p>\n

In fact, that company is already in advanced talks with BHP Billiton Ltd [ASX:BHP]<\/strong>.<\/p>\n

I’ve read Jason’s research — the companies he has tipped clearly have what it takes to succeed.<\/p>\n

But these stocks won’t be for everybody. <\/p>\n

These kind of speculative punts are not for the faint of heart.<\/p>\n

But that’s okay. <\/p>\n

The way I see things, this market offers you three ways to potentially profit from the oil price smackdown.<\/p>\n

Each approach could suit you differently depending on your attitude towards risk and reward. As a rule of thumb, you can’t scoop more of the latter unless you take more of the former.<\/p>\n

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Value hunters emerging<\/strong><\/h2>\n<\/p>\n

The first route to potential profit is by buying Australia’s large, diverse oil and gas<\/a> producers. <\/p>\n

The plummeting oil price has punished these stocks.<\/p>\n

Crude oil has lost more than a fifth of its value over the past four months. That has forced traders to aggressively cut the price of shares in oil producers like Woodside Petroleum Ltd [ASX:WPL]<\/strong>, Santos Ltd [ASX:STO]<\/strong> and Beach Energy Ltd [ASX:BPT]<\/strong>.<\/p>\n

With all the chatter of ‘corrections’ in the Australian stock market<\/a>, you should know that many of these kinds of stocks have already had their correction. <\/p>\n

With these shares down between 11% and 28% from their recent highs, shrewd value hunters are starting to nibble.<\/p>\n

These large companies offer diverse exposure to a commodity that the world can’t do without. <\/p>\n

A time will come when these stocks are too cheap for the heavy hitters to ignore. You’ll want to own them before that day comes.<\/p>\n

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Fortunes for investors<\/strong><\/h2>\n<\/p>\n

The second way to play today’s oil market is by investing in one of the most exciting high-tech trends<\/a> to sweep the sector in years.<\/p>\n

Advances in exploration and drilling tech have ‘unlocked’ billions of barrels of oil that oilmen were previously unwilling or unable to pursue.<\/p>\n

That has driven the ‘shale gale’ — the massive production growth that’s taken the United States from a vulnerable customer of the OPEC cartel to an energy exporting powerhouse.<\/p>\n

A similar trend is playing out in Australia.<\/p>\n

Newly extractable shale oil and gas<\/a> is making fortunes for drilling companies, landowners and investors across Australia.<\/p>\n

But investing in companies that are drilling shale takes careful thought.<\/p>\n

Buying these kind of stocks means you need to consider the direction of the oil price much more closely.<\/p>\n

That’s because some of their efforts are only economic when the world price of crude oil trades above a certain threshold.<\/p>\n

With oil bubbling along at more than US$100 per barrel, these worries tend to recede.<\/p>\n

But the large recent moves in the oil market have brought these issues to the surface. <\/p>\n

A falling oil price tends to hit these kinds of stocks harder than the big diverse companies I mentioned earlier.<\/p>\n

That gives canny investors<\/a> much more runway to reap big potential gains when the oil price rebounds and these stocks come back into vogue.<\/p>\n

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My favourite play<\/strong><\/h2>\n<\/p>\n

As a small-cap stock analyst, this is my favourite way to play the oil market.<\/p>\n

But it won’t be for everyone.<\/p>\n

That’s because it involves taking on high levels of risk.<\/p>\n

It’s strictly for speculators who are willing to risk a minor stake for the chance to make a fortune.<\/p>\n

It’s for the investor who’s comfortable putting a small part of their portfolio in speculative stocks for the chance to supercharge their savings.<\/p>\n

They go into these deals with their eyes open. They understand that if things don’t work out, the value of that minor stake could go to zero.<\/p>\n

But that’s part of the game.<\/p>\n

The speculative stocks I’m talking about are ‘frontier’ oil explorers.<\/p>\n

If these companies strike oil, their share prices could double or triple in a matter of days.<\/p>\n

But there’s one key reason why these stocks are particularly compelling today.<\/p>\n

As I mentioned earlier, exploration and drilling tech has taken massive strides over the past few years.<\/p>\n

So much so that we’re at a point when exploration risk is significantly less for the new breed of oil explorer than it was for their 20th century forerunners.<\/p>\n

In one area of the world, this simple fact could multiply your stake by a factor of 15-to-1<\/a>.<\/p>\n

You owe it to yourself to consider this opportunity now. <\/p>\n

That way, you can buy your stake before the rest of the world cottons on and piles in…and you could reap the benefits.<\/p>\n

Cheers,<\/strong>
\n
\n Tim Dohrmann,
\n Editor, Money Morning<\/em><\/strong><\/p>\n

Join Money Morning on Google+ <\/u><\/a><\/strong><\/p>\n

The post How You Could Make a Fortune in Resource Stocks<\/a> appeared first on Stock Market News, Finance and Investments | Money Morning Australia<\/a>.<\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n


\nBy MoneyMorning.com.au<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au Right now, Australian resource stocks are some of the world’s best bargains. Despite the falling price of crude oil — and in some cases, because of it — companies in this sector are primed to deliver enormous potential returns. But when stocks are attractively valued, your average mug punters are racked with fear. […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-62160","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/62160","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=62160"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/62160\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=62160"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=62160"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=62160"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}