Mining stocks still look bright for the stock market in 2008

There is nothing that feels as good as being vindicated on an idea. As a former stockbroker I especially like to hear that I got it right. But I realize that my vanity is only a personal joy and mining stocks are the real winners.

I have said in August and September, as well as in other points in this year, that mining stocks were one of the best values in the stock market. While the focus has been on financials the market has run to gold. And with the latest drop in the stock market, some 20% down in a week and 42% for the year at that point, there were few that believed anything was still a buy. And then the market gained nearly 1000 points in a day.

And then the Motley Fool readers jumped on the ride. The MSN Money list of institutional buying and the Motley Fool CAPS both picked as their top 2 leading buy choices:

• Compania de Minas Buenaventura
  
• Agnico-Eagle Mines
  

Is anyone surprised?

Copper ran for a huge 2-day run that was unheralded, the largest mining company in the world BPH gained 3.5%. Vedanta Resources Plc, the biggest copper miner in India, gained 14%.

On Monday Barron’s wrote about Van Eck portfolio manager Joe Foster and his call for the gold market - International Investors Gold Fund.

So it seems that all these sources are looking towards the mining stocks. That means that you can be sure that this is the time for a pause in gains for a bit. I still regard this sector as one of the best purchases in the market. Volatility is not gone, but then again the markets in general are going to experience that.

The 4th Quarter is going to be abysmal. As sales miss projections and earning look to become negative, the need for metal will become attractive again. As the financials continue to seesaw, causing turmoil in other markets, and the Presidential election places a firm vision of the next 4 years precious metals will experience a run similar to that at the end of 2007.

I may be wrong, just as at various points this year I already have been. But the overall outlook has been correct, and I think it will be in the future as well. But only time will tell.