Are Mining Stocks a Good Bet Again?
Source: Seeking Alpha, David Hunkar (1/28/09)
"Gold will continue to be a favorite for investors in these tough times."
Mining companies are dependent on the economic growth of individual countries, especially fast-growing countries such as China and India. The governments of China and India have promised heavy spending on infrastructure projects such as roads, bridges, railroads, airports, etc. as part of their stimulus plans.
Here in the U.S., the Obama administration has promised to invest heavily in upgrading the infrastructure, as well. So in a way the demand for commodities might increase as these projects are implemented.
However, all these government initiated efforts will not start immediately; hence these stocks will continue to be extremely volatile. Gold will continue to be a favorite for investors in these tough times. But the demand for commodities like coal, silver, iron, copper, tin, etc. is difficult to predict at this time with any accuracy - other than the infrastructure investment mentioned earlier.