Better than Winning the Melbourne Cup

commodities stocks

How did your Melbourne Cup bets go?

I’d rather not talk about mine! It was a terrible day. Not to mention, the weather wasn’t perfect for the race.

I had five punts on the race — all $10 bets. My thinking was that the race would be unpredictable. Makybe Diva — three-time Melbourne Cup winner — wasn’t running, so the race was going to be open.

My prediction was correct. I backed a few outsiders for a place, such as Cismontane (paying $11), which seemed like the best way to play the cup. But my strategy didn’t deliver.

Rekindling won the cup. It was paying $15 for the win. wrote this morning:

The big winners were everywhere on Cup day. One lucky punter has come away with $151,255 from a $50 boxed trifecta. Another placed a $33 boxed trifecta for a return of $100,433.

A TAB customer scored the most improbable win of Melbourne Cup day after he turned a $10 punt into seven figures.

After becoming the lucky customer to have his name drawn [from a promotion draw], Dominic was asked to pick the winner of the Melbourne Cup. If his selection crossed the line first, he’d win $1 million.

Dominic selected Rekindling and sat back at home to watch his dream unfold.

A small bet turned into a fortune for a few lucky punters. If you drew a winner, congratulations. If you didn’t, the good news is that it doesn’t matter.

See, you could still make a fortune. Not from horse racing. But from buying the right stocks in the right sector. I’m not talking about bitcoin or technology either.

I’m talking about commodities — the flavour of the month. 

Better than bitcoin reported on 5 November:

According to a recent report from Goldman Sachs, entitled, “Metals Shine as Oil Volatility Dulls,” demand for all sorts of commodities has been very strong in 2017, both energy and metals included. “[A]ll markets are currently facing the best demand backdrop in over a decade with strong global synchronous growth,” Goldman wrote.

In short, the message from the investment bank is that the past year has been a relatively strong one for commodities, depending on the sector, while there is more room to run. Goldman reiterated a projection of 4 percent returns for commodities over the next 12 months, an upgrade from the 1 percent projection it had previously.

Investment banks are well-known for sitting on the fence with their forecasts. That said, while a 4% growth trajectory doesn’t sound amazing, Goldman Sachs raised its target by 300%.

That speaks volumes.

Commodities are booming across the board. The copper price is heading back towards three-year highs. Nickel prices are trading at a multi-year high. Crude oil is surging on conflict in the Middle East and corruption concerns. Zinc is trading around 10-year highs. The only laggard is gold.

Meanwhile, the Bloomberg Commodities Index has risen to its highest level since early March. The 11% surge since late June is becoming more broad-based as well. Even some long-suffering agricultural products are catching up. Take a look at the chart below:

Source: Bloomberg
[Click to enlarge]

What makes the current rally extra impressive is that it coincides with a rising US dollar. Remember, commodities are priced in dollars. A stronger greenback normally moves inverse to prices. But not this time. This shows the true appetite for commodities today. That’s why the best resource stocks are booming.

You have to be in it to win it

Punters are slowly waking up to what’s happening. The MSCI All-Country World Index just rose for the eighth straight day — the longest rally since July. The benchmark is up 18.5% for the year. That’s mostly due to emerging-market stocks, which have gained 31.5%. That makes sense because most of these companies depend on commodities.

It’s no wonder that the ASX 200 is trading near 6000 points. The commodities market is on the move. If you blink, you could miss out. Take a look at the Resource Speculator buy-recommendation-list prices:

Source: Resource Speculator
[Click to enlarge]

There’s a world outside of bitcoin — one which I’d argue is far more attractive and interesting. If you buy what I believe to be the best resource stocks, just like my readers, you could potentially make a fortune.

Don’t miss out on the next potential big winner. Find out more here.


Jason Stevenson,
Editor, Resource Speculator

Jason Stevenson

Jason Stevenson

Analyst at Markets & Money

Jason Stevenson is Markets and Money’s resource analyst. He shares over a decade’s worth of investing and trading experience across resource stocks and commodity futures and options.

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