A welcome rally does not a rebound make

Hold on – those who wait out the bumps will find opportunities in resources.

Summary: The wild ride experienced by miners Rio and BHP in the last week came as a result of shorters driving prices up, while speculators joined in through a belief that the sector was on its way back up. I believe that the current cost cutting, mine closures and other measures taken to stabilise mining balance sheets will take a significantly longer time to have an effect on supply than people expect - and we should be prepared for more volatility.

Key take out: Now is the time to start researching the sector for when a sustainable recovery presents opportunities in future.

Key beneficiaries: General investors. Category: Commodities.


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