Going Forward

When I look at my portfolio going forward, the one sector I remain bullish on is metals, particularly mining. I know there are "gold bugs" running around buying bricks of gold bullion and laughing at everyone who isn't because they claim gold is going to $3,000 an oz. Well, my argument to them is that "Is Inflation really coming as fast as people think and as violently?" Of course, much of this depends on monetary policy actions but in my views, certain things must occur before we see inflation. In my view "gold bugs" or "inflation lovers" need risings wages and there is no where to be found. Saving, rising unemployment, and wages that are not fiericng growing, in my view reduces robust inflation. Away from gold, there are many iron ore producers that will see volume increases in the coming years, unless we see drastic reductions in economic recovery. In addition, I believe there will be shortages of many metals in the coming years due to slower production. Rio Tinto (RTP) is the iron ore giant that I own (top 5 biggest positions) and will add more on dips. This stock used to be $400+ a share - i doubt it will get there again but from my valuation metrics, it's worth at least $200-$225 now. VALE and BHP are other good players - but from my perch, RTP may be the most expensive in terms of dollar amount per share; however, in reality, is the most inexpensive, in terms of true valuation. If you can trade the London Exchange, XSTRATA is an absolute steal at current levels and is worth about 50% more than current prices.