Far East Capital Newsletter
Sunstone shares are performing whilst waiting on assays
21 Aug 2021

In This Issue

Sunstone shares are performing whilst waiting on assays

A year ago the market was euphoric even though gold prices had pulled back a bit (which turned out to be the start of a bear market for the yellow metal). Everyone seemed to making money across a range of sectors. Many newcomers to the stock market thought that it was oh so easy. So it should have been. It was the best year that I had seen in decades.

It is a different story today. The markets seem to be reverting back to the norm. A year ago the smart strategy was to buy on the sniff and do the homework later, or you might miss out. The opposite is the case now as the mining sector continues to drift lower. There is not much FOMO out there. Good news tends to be hit with a wall of selling - "buy on rumour and sell on news" seems to be the go. Even though there is a scramble to get set in placements and punters fight over allocations, there has been a noticeable lack of follow through as many of the companies trade below the placement price. We have seen many periods like this in the market over the years, so it shouldn't be foreign to us.

Iron ore prices have been melting down over the past few weeks, along with the share prices of the big Pilbara producers. Copper has fallen to a four month low and it is looking weaker notwithstanding the supply threats from South America, yet rare earths prices are still performing. Oil prices are suffering from fear of a covid induced slowdown. Gold is bouncing around as traders try to figure out whether or not we really have inflation and if we do, what does this mean for interest rates and the US dollar, which is edging higher? Taking the discussion one step further, if things are going well in the US, can markets hang in there if there is a tapering of the easy money; so much banter and mixed signals. 

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