They're Giving Away Resource Stocks By Dr. Russell McDougal 
You likely know that my specialty niche is Canadian resource exploration stocks. These small cap companies are notoriously volatile. They aren’t quite free these days but they are ridiculously cheap. Why exactly has this happened? Especially when commodity prices are soaring pretty much across the board. Aren’t the explorers supposed to show leverage to the underlying resource prices to which they seek? History demonstrates typical long term leverage with exploration stocks. If gold goes up 20% you can reasonably expect the gold shares to perform at a multiple of that figure. At the present times the “juniors” aren’t even keeping up with rising commodity prices. The ongoing global credit crunch is a primary reason for this disparity. The appetite for speculation has waned. Global players have sold off winning positions in order to create liquidity. Some suggest that hedge funds may be shorting the explorers. Whatever the reasons are, the anomaly won’t persist indefinitely. Either commodity prices must fall or junior miners must rise and close the gap. I don’t see commodity prices falling significantly from present levels. They stand as protection against currency debasement which happens to be a growth industry these days. The US dollar remains at the epicenter. Opportunities abound. Let’s look at a simple example in a company called Amera Resources (AMS:Toronto).
 This portrayal is for demonstration purposes only. I personally own this stock. It is not in the Resource Windfall Speculator portfolio and this is not a buy recommendation. INTERNAL ENDORSEMENT Stock Market Shocker: How a Bunch of 5th Graders Made Fools of the Trading Elite…! Wall Street wants you to believe that you have to entrust your money with the professionals and all their skills, resources and systems, if you want to make money in the markets. It’s what these guys do for a living! How could you possibly beat them?! Nothing could be further from the truth. In fact, I have used an embarrassingly simple secret to make $15,048 in just 30 days... and boost my overall account balance 152% in less than a year. Keep reading to learn how you
could join me each month... | That’s an ugly chart. The stock is going down on exceedingly low volume (15,000 shares this day). Amera’s 52 week high is $.41. It’s near its 52 week low of $.11. Amera has 34.5 million shares outstanding. At $.14 Canadian, that gives them an overall market cap of a miniscule $4.83 million. Surely something must be fundamentally flawed with this company. But that’s not the case. They have money, excellent management and exceedingly promising projects in mining friendly South American countries. I wrote a series some time back on “The Perfect Resource Exploration Stock”: The Perfect Resource Exploration Stock, The Perfect Resource Exploration Stock: Part II, The Perfect Resource Exploration Stock Part 3: Anatomy of a Ten-Bagger.Amera fits the majority of the qualifications for such a title.
Buying high quality speculative stocks with a market cap of $5-$10 million is pretty much a “no brainer” from the perspective of savvy resource investors. It’s called ultra cheap lottery tickets. Say they prove up an asset valued at $300 million, for example. That would be 60X the current market cap level. There are zero assurances of such an event transpiring. That’s why it’s called speculation. Lots of market participants would be much more comfortable buying stocks at annual highs instead of annual lows. Low prices freak them out and they end up capitulating. Capitulation is pretty much rampant these days. I believe that’s what shows clearly on the Amera chart. When the last sellers give up their shares the market then becomes dominated by buyers. The bottom is in. The market then heads back towards the next extreme. The fear/greed cycle is inherent within all markets. All the more so in the junior explorers. Some companies are selling at prices close to their cash on hand value. Summers are typically dreary times for the juniors as well. Buyers are more interested in their tans and exotic travel than following stocks. Will the sector go even lower during this vulnerable time? It’s entirely possible. Still, the downside seems dwarfed by the upside potential. It’s likely to be an historic opportunity for accumulation. What’s your long term view on commodity prices? Invest Resourcefully, Rusty P.S. To let me know what you thought of today's article, send an e-mail to: feedback@investorsdailyedge.com. [Ed. Note: Dr. Russell McDougal has dedicated years of study and investing in the natural resources exploration sector. During that time he has closed out DOZENS of gains of 500%... 1,000%... 2,000% and more! Currently he is sitting on multiple thousand percent winners, including one stock that is up a whopping +5,000%. And for a select group of investors, Rusty has agreed to share his secrets of success... and his top stock recommendations. Click here to learn more... ] A Reason for Higher Oil Prices By Charles Delvalle I’m going to show you a very important chart below. It’s one that shows one of the biggest drivers for higher gas prices. 
Chart Courtesy of the Energy Information Center You see that little red dot on the chart above? That little dot shows that worldwide oil production peaked in July 2005. Since then, new production hasn’t been enough to offset the falling production rates of older wells all over the world. So is it any wonder why oil prices are hitting new highs nearly every single day? Listen, many people are calling this climb in gas prices a bubble. But this rise in gas prices is driven by solid fundamentals! Contrast that to the internet and real estate bubbles which were driven by nothing more than the ‘hope’ of higher prices. And with summer driving season coming upon us, you shouldn’t be shocked to see gas prices climb even more. The only thing that could take oil prices down is a nasty worldwide recession. And that’s a scenario which looks far from happening in 2008. But if you’re worried about a short-term price drop, then wait for the prices to drop and then get into the United States Oil Fund (USO). As the price of crude goes higher, so does this ETF. Good trading, Charles INTERNAL ENDORSEMENT Winners Cherry Pick!
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