"Within a diversified portfolio of resource stocks, I like to have some small bets on the little guys," says Curtis Hesler, a noted authority on natural resource investing and the editor of The Professional Timing Service.
"Some of the smaller and, admittedly, more speculative exploration companies did not follow the mining sector during the August-November rally. This is not unprecedented.
"This failure to 'join the party' reminds one of what happened in 2005 when the lower tier gold miners failed to participate (some crashed severely) while the majors were strong. Most of them more than made up for it during 2006 when the mining stocks surged again.
"Everyone has a different financial circumstance, so you will have to decide what a prudent wager on these will be for you individually. There is risk here, but the juniors certainly do beat buying call options, and they do apppear to be poised for superior performance in 2008.
"Currently, I favor Taseko (ASE: TGB) and Great Basin Gold (ASE: GBN). They are our most recent lower tier recommendations They are buys at $4.50 and $2.45, respectively.
"The fundamentals are looking stronger for gold, which is one reason I do not expect to see gold adversely
affected much by periods of dollar strength this year. There are supply shortages developing in gold. Gold, like oil, is becoming more difficult to find.We could well see a situation of 'peak' gold develop in the next couple of years.
"In the meantime, as standards of living in Asia, India, Russia, and other emerging economies improve, individual
gold ownership will increase. Gold ownership is something most non-Westerners are attracted to culturally.
"Be sure to diversify. Don't fall in love with any one stock; but when the mainstream finally discovers commodities, the mining shares will all explode. The small ones will not be left behind."
Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.
Closing Bell: Stock bulls and dollar death (DDRX,GMCR, PEET, SBUX, EBAY, CI, TECD)
So long peak oil, here comes peak uranium
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