NEW YORK (MarketWatch) -- In the new year, oil and gold will still rule, according a top-performing newsletter.
Justin Litle's Outstanding Investments is the fifth-best performing letter over the past 12 months, according to the Hulbert Financial Digest, up 37.2% vs. the dividend-reinvested Dow Jones Wilshire 5000's 16.54%.
Over five years, Outstanding Investments is up a remarkable 36.88% annualized, vs. 8.86% for the total return DJ Wilshire.
Unquestionably, this is because, for whatever reason, Outstanding Investments has been in synch with a major market move: the rebirth of oil and gold. But you can't argue with Hulbert numbers: It's really worked.
Editor Litle is aware of this, but he's carrying on anyway. As he wrote Wednesday night:
"Every New Year's Eve in recent memory, I've thought to myself: "It can't get any crazier than this. How can the new year possibly top the last?" Yet for five years running at least, the new year HAS topped the last, in all the ways that count.
"2007 is shaping up to be the same, yet even more so. A lot of chickens will be coming home to roost. 2007 could be the year we see oil above $100 ... the year gold breaks its 1980 highs ... the year silver jumps over the moon ... the year developing-world economics and infrastructure woes really hit home ... and that is just a start."
This is true both strategically and tactically. When I last checked in, Outstanding Investments was standing firm with oil and gold. See Oct 16 column
It worked, especially with gold.
Outstanding Investment's latest letter was published some time ago, in early December. The service continues to be intensely focused on what it sees as a looming brute physical shortage of energy, and raw materials generally, in the world.
It wrote: "It's like a broken record, I know: Chinese growth is driving the commodity boom. We hear it all the time. And it's true. The fact of the matter is that China has struck some incredible deals with countries like Canada, Russia and Venezuela, and the list goes on. While we've seen a pullback in many of the commodities in the third quarter, China used that pullback to prepare for the next leg of the rally in commodities. Meanwhile, the U.S. has been asleep at the switch and busy trying to stave off nuclear proliferation in various regions of the world, with about 50/50 success. The U.S. is woefully behind in the race to snatch up valuable resources and lock in key partnerships as we head past the halfway mark of the first decade of the millennium."
One result: Outstanding Investments seconds veteran editor Jim ("The Dines Letter") Dines' fascination with uranium. See Nov. 13 column
For example, Outstanding Investments continues to recommend Cameco Corp. (CCJ ![]()
CCJ )
... despite the recent flooding of the huge Cigar Lake, Saskatchewan, uranium mine, in which Cameco has a half interest. If anything, Outstanding Investments seems to think that this will just exacerbate the supply crunch.
Cameco Corporation...
Sponsored by:
... despite the recent flooding of the huge Cigar Lake, Saskatchewan, uranium mine, in which Cameco has a half interest. If anything, Outstanding Investments seems to think that this will just exacerbate the supply crunch.
Outstanding Investments does think about other things. For example, its most recent stock of the month was Walter Industries Inc. (WLT
Admittedly, it's partly a high-quality metallurgical coal play. But Walter also owns Mueller Water Products, a leading provider of water infrastructure products. Outstanding Investing thinks U.S. infrastructure is heading for a crisis. And, as it happily quotes someone saying, "Water is the new oil."
Walter Industries Inc
Sponsored by:
(WLT ) .Admittedly, it's partly a high-quality metallurgical coal play. But Walter also owns Mueller Water Products, a leading provider of water infrastructure products. Outstanding Investing thinks U.S. infrastructure is heading for a crisis. And, as it happily quotes someone saying, "Water is the new oil."
Outstanding Investments recommends buying WLT below $48.
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