Wednesday, October 03, 2007

Three rules for buying resource stocks

As promised, we are following up our recent "Profiting from the reflation" post with some more expert commentary on investing in the resource sectors.

We talked about some of the fundamentals behind higher oil prices and energy investing in, "The path to $80 oil". Today, let's slide on over to the Daily Reckoning site for an overview of resource investing and speculation, and a little help from noted resource investor, Rick Rule.

Here's a taste of Rick's investment philosophy:

“The resource business is not a cyclical industry. It is an extremely cyclical business. More cyclical than you can imagine,” says our old friend, Rick Rule.

“In natural resources you only have two choices,” he continues. “You can be a contrarian or you can be a victim. And yet, many people still buy resource companies after they have been run-up. They still sell them when they get disgusted after they have fallen down. That is no way to make money.”

For more of Rick's wisdom, read, "Three Rules for Buying Resource Stocks".