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At the end of March, interest rates now sit at 6.32% average across the country for a 30-year fixed rate mortgage. While this is lower than a few weeks ago, they are still much higher than a year ago.
The cause is that the Federal Reserve has been raising rates aggressively over the last year to fight persistently high inflation. The Fed’s goal of raising rates is to slow the economy and bring inflation back down to a normalized level or target goal of 2%.
Raising rates makes large capital expenditures for businesses or individual households more expensive, thus creating a situation where it is no longer affordable or makes good business sense to make those investments.
Fewer large investments or fewer new homes being built because the financing costs of making those purchases are too high will eventually slow the economy and thus bring inflation down.

While we all want inflation to come down quickly, it takes time for high-interest rates to flow through the system and change business leaders’ and households’ decision-making.
Furthermore, there is a rather big delay with the economic data that tells us how the economy is performing and whether or not large investments, home purchases, and overall spending is slowing.
This all means that when we realize business leaders-consumers have changed their minds about what investments and purchases are worth making, the economy is already slipping.
If we now look strictly at the household side of the equation, it seems clear that this group is heading toward tough times in the not-so-distant future, thus making the idea of a new home purchase much less likely.
First, we have high inflation. This is making everything across the board more expensive. Consumers’ average cost of living is increasing, whether it be groceries, child care, transportation, or clothing.
Then we have higher interest rates on top of those higher daily living costs. This is making a new mortgage more expensive.
And finally, we throw in the fact that consumer debt is now at all-time highs. These combined factors paint a bleak picture of a strong housing market in the near term.
Although, if we look at the exchange-traded funds focusing on home builders, they are up 10% or more year-to-date, while the S&P 500 is up less than 4%.
I believe this is an opportunity for investors to get ahead of the curve and short the home builders before we see definitive data that indicates the economy and housing market is beginning to struggle.
A few of the basic, non-leveraged ETFs that you could short are the iShares U.S. Home Construction ETF (ITB), the SPDR S&P Homebuilders ETF (XHB), or the Invesco Dynamic Building & Construction ETF (PKB). You could open a short position in any of these funds or buy put options on them.
If you want to get more aggressive, you could short or buy put options on either the Direxion Daily Homebuilders & Supplies Bull 3X Shares ETF (NAIL) or even the Direxion Daily Real Estate 3X Shares ETF (DRN). These are both three times leveraged to the upside. So if you short them, and they decline in price, you would be getting three times as large of a move. However, this does add to your risk.
If you are uncomfortable with open short positions or buying options, you could also buy the Direxion Daily Real Estate Bear 3X Shares ETF (DRV), which is three times leveraged to the downside of the real estate industry.
The downside is that DRV is more of a real estate ETF than directly focusing on the housing industry. So, if the housing industry does turn negative, you may not realize the lion’s shares of the move lower.

Regardless though of whether you directly short the homebuilding ETFs, use options, or play the leveraged homebuilding ETFs, there is a lot of risk with this trade.
First, you are shorting the industry that has not yet shown real signs that it is cracking.
Second, it may take months for data to show that this is a smart trade today.
And finally, you are shorting stocks, thus limiting the upside to your investment but opening yourself up to a lot more risk.
This is not a trade for everyone, and by no means is this a ‘for sure’ type of trade. It is a trade based on many assumptions about the consumer’s overall health at this time and where they may be in a few months.
Ensure you fully understand what your risk is before making any decisions.
Matt ThalmanINO.com ContributorFollow me on Twitter @mthalman5513
Disclosure: This contributor did not hold a position in any investment mentioned above at the time this blog post was published. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.

It’s been an exciting year for the Gold Miners Index (GDX) with the index up 12% year-to-date and significantly outperforming the S&P-500 (SPY) for a second consecutive year.
This strong performance can be attributed to the recent strength in the gold price, with the metal launching 10% higher over the past month to hang out near psychological resistance at $2,000/oz.
The recent strength is a big deal for the average producer, which up until January suffered from considerable margin compression with a flat gold price since 2020 yet inflationary pressures across the board.
Unfortunately, for investors hanging out in the gold developer space, the returns have been dismal. Not only have the developers massively lagged the producers and many are scraping along the lows of their multi-year ranges, but they’re under-performing this year despite already lagging by 2000+ basis points last year as well.
This is obviously quite disappointing for investors and in some cases it may be leading to some irrational or forced selling as some investors are tired of not participating in the gold price move and choose to dump their shares.

In this week’s update, we’ll look at two names that continue to trade at massive discounts to fair value that offer a way to get leverage to gold without chasing names already up substantially year-to-date.
i-80 Gold (IAUX)
i-80 Gold (IAUX) is a $840 million market cap gold developer that has a resource base of ~15.0 million ounces of gold in the state of Nevada.
This is an enviable position to be in given that Nevada is one of the top-ranked jurisdictions globally for mining with an abundance of resources, access to a considerable workforce, and favorable permitting historically.
The company differentiates itself from its peer group for several reasons, with the main one being that it has the #1 growth profile sector-wide, with a plan to grow its production profile from ~30,000 ounces in FY2023 to ~250,000 ounces by H2 2026, with the potential to grow to 400,000 to 450,000 ounces long-term.
This profile is near unheard of in the sector, and producers of this size (400,000+ gold-equivalent ounces) in Nevada can command market caps north of $3.5 billion.
Today, partially due to a large share sale by a majority owner that spooked some investors and due to the depressed sentiment sector-wide for juniors, i-80 Gold is trading at just a fraction of its long-term potential, and well below my 2-year target price of US$4.70.
Some investors might argue that while this points to nearly 100% upside from current levels, there’s no clear path to a re-rating when sentiment for juniors remains in the gutter.
I would strongly disagree with this statement, with i-80 having nearly a dozen catalysts on the horizon and catalysts that will de-risk the story materially.
Plus, while i-80 is technically a “junior” or developer given that it’s busy drilling out and completing studies on the multiple mines in its portfolio, it’s actually already a producer and generating free cash flow, with one of its five potential mines already in production: Granite Creek Underground.
For those unfamiliar, the company’s five mines include Ruby Deeps (plus polymetallic potential at its Ruby Hill Project), Granite Creek Open Pit, Mineral Point, and McCoy Cove.
In regards to these catalysts, i-80 is drilling at multiple properties, and investors can look forward to drill results from Granite Creek, McCoy Cove, Ruby Deeps (gold), and different polymetallic deposits at its Ruby Hill Project which include Hilltop, Hilltop East, Blackjack, and the larger Hilltop Corridor plus the FAD deposit to the south (recently acquired).
This should provide a steady stream of news flow, and any new major discoveries to result in a sharp gap higher in the stock given that the stock is seeing little value for its high-grade polymetallic discovery made last year at Hilltop.
Additional catalysts for the company this year include a maiden resource estimate at its Blackjack deposit, a reserve estimate and Feasibility Study at Granite Creek, an updated resource estimate at its Ruby Deeps/426 Zone at its Ruby Hill Project, the possibility of a maiden resource at its new discovery at Granite Creek (South Pacific Zone) and a ramp-up to full production by year-end at its Granite Creek Underground mine.
In my view, these updated resources are likely to push i-80 Gold’s resource base to ~17.0 million gold-equivalent ounces, with upside to 20.0 million gold-equivalent ounces long-term from Hilltop and other polymetallic resources separate from Blackjack.
Despite gold sitting at $2,000/oz today, investors are able to get exposure to these resources for just ~$40/oz today. Obviously, not all of these ounces will go into production, and some ounces are more valuable than others if they are high-grade.
However, even if focus on just the higher-grade subset of i-80 Gold’s resource (which I believe could come in at 8.5+ million gold-equivalent ounces by 2025), i-80 Gold is trading at less than $80/oz on high-grade resources when peers have been acquired for north of $200/oz for high-grade resources that are still years away from production. Examples include Great Bear Resources, Fronteer Gold, Ventana Gold, Spectrum Metals, and several others.
So, I would argue that i-80 Gold is dirt cheap at current levels and if it stays at these levels, it could be a takeover target.
To summarize, I see multiple catalysts for an upside re-rating for i-80 and this could end up being the busiest year in the company’s life from a news flow standpoint with what’s likely to be a steady stream of news every other week for the next thirty weeks.
For investors looking for an undervalued producer flying under the radar of the average investor that focuses on the larger producers, I see i-80 Gold as a steal at US$2.30 or lower.
Liberty Gold (LGDTF)
Liberty Gold (LGDTF) has been one of the worst-performing gold developers since the Q3 2020 peak, declining over 75% from its highs at US$1.82 per share.
However, unlike most juniors, Liberty Gold has very carefully managed its capital. This has included ensuring its drilling only the holes it needs to vs. super regional targets that are less likely to hit, paying the right price for securing key land and water rights at its Black Pine Project, and divesting non-core projects to ensure it can continue to drill and operate without having to go raise capital in a soft equity market.
The result is that it has seen limited growth in its share count, which is exactly what investors want to see from a gold developer: capital discipline and putting shareholders first.
For those unfamiliar with the company, Liberty Gold owns two oxide gold projects (amenable to heap-leach) that are located in Idaho and Utah, two very favorable mining jurisdictions that rank just behind Nevada for investment attractiveness.
The company’s flagship project is Black Pine (Idaho), a project that’s home to a resource of 3.1 million ounces of gold with favorable metallurgy from recent testwork, with the company confident that 80% of leachable gold can be extracted within ten days.
Notably, the gold recovery at Black Pine is less sensitive to crush size suggesting the potential for a run-of-mine heap leach operation, which is one of the cheapest mines to build and operate.
The real story for Liberty Gold, though, is the fact that while Black Pine is home to ~3.1 million ounces of gold, there looks to be the potential for 5.2 – 5.5 million ounces here long-term as Liberty has barely scratched the surface on several targets.
This includes the Back Range Zone (northwest of main Discovery Zone), the Rangefront South Zone (southeast of the Discovery Zone and just south of Rangefront), the M Zone, filling in gaps between zones, and lowering cut-off grades to 0.17 grams per tonne of gold.
Assuming Liberty was able to prove up 5.5 million ounces of gold and we see a ~60% conversion rate (resources → reserves), this would translate to a ~3.05 million ounce reserve base and 15 years of production at 200,000 ounces per annum, with an operate of this size in a safe jurisdiction easily able to command a $500+ million valuation (which doesn’t even include its Goldstrike Project in Turkey).

Today, Liberty Gold sits at a valuation of just $142 million, suggesting it’s trading at one-third of its long-term potential, and I would argue that a $500 million valuation on Black Pine is conservative. In fact, we’ve seen suitors pay upwards of $100/oz for heap-leachable ounces in the United States.
I would argue that give progress securing water rights and the fact that there’s no fish-bearing streams or timer values in addition to favorable metallurgy, Liberty’s Black Pine is one of the better projects out there.
So, I see two paths to a considerable upside re-rating for Liberty. These include progressing towards the Feasibility stage where ounces tend to command a much higher value or being taken over given that this is an extremely profitable mine even at a $1,7500/oz gold price, let alone a more bullish scenario like $1,850/oz to $2,050/oz gold (range thus far this year).
To summarize, I see Liberty as a Speculative Buy at US$0.375, and I would view any sharp pullbacks in the stock as buying opportunities.
Many investors are busy chasing the names that have already doubled off their lows and while this may work, I prefer hated stocks that are still well below their highs that are being thrown out with the proverbial bathwater.
Liberty Gold and i-80 Gold are two such examples, and I believe both are likely to be outperformers in the developer space over the next two years as they have strong management teams aligned with shareholders, exceptional projects in favorable jurisdictions, and relatively simple operations that investors can be confident will be permitted in a timely manner.
Disclosure: I am long IAUX, LGDTF
Taylor DartINO.com Contributor
Disclaimer: This article is the opinion of the contributor themselves. Taylor Dart is not a Registered Investment Advisor or Financial Planner. This writing is for informational purposes only. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Taylor Dart expressly disclaims all liability in respect to actions taken based on any or all of the information in this writing. Given the volatility in the precious metals sector, position sizing is critical, so when buying small-cap precious metals stocks, position sizes should be limited to 5% or less of one’s portfolio.

Editor’s Note: Our experts here at INO.com cover a lot of investing topics and great stocks every week. To help you make sense of it all, every Wednesday we’re going to pick one of those stocks and use Magnifi Personal to compare it with its peers or competitors. Here we go…

Real estate investment trusts, or REITs, have existed here in the U.S. since the 1960s. The mature American market means there are some interesting subsectors where investors can gain exposure.
One such asset class is infrastructure. American Tower (AMT), Crown Castle (CCI), and SBA Communications (SBAC) are the second-, fourth- and 11th-largest U.S. REITs. All three own communication towers across the country, which are leased out to mobile phone services providers, radio and TV broadcasters, government bodies, and other companies.
The other type of infrastructure popular in the REIT space is data centers. The third- and 10th-largest REITs, Equinix (EQIX) and Digital Realty (DLR), both own and lease data centers to technology companies requiring immense amounts of digital storage space.
However, the data center REITs have come under criticism. In 2022, well-known short seller Jim Chanos said he was raising money to bet against such companies, predicting that the tech giants currently renting the space would look to develop their own data centers going forward.
As Chanos put it, “…although the cloud is growing, the cloud is their enemy, not their business. Value is accruing to the cloud companies, not the bricks-and-mortar legacy data centers.”
Chanos also pointed to a wider issue in the REIT space: the risk that many are overvalued.
According to numbers compiled by FactSet, the average S&P 1500 REIT is priced at 2.39 times net asset value (NAV) and 40.2 times earnings. Also, the average S&P 1500 REIT’s net debt is 1.36 times its NAV.
However, the high multiples on REIT shares come from the fact that they have lots of exposure to high-growth sub-sectors, such as self-storage, healthcare, student accommodation, and the aforementioned infrastructure.
What we want to do this week is to compare a REIT in the sub-sector that Chanos doesn’t like — Digital Realty — and the largest of the communications tower REITs, American Tower.
The easiest way to do that is to ask Magnifi Personal to do it for us. It’s as simple as asking this investing AI to “Compare AMT to DLR.”

This is an example of a response using Magnifi Personal. This image is not a recommendation or individual advice. Please see bottom disclaimer for additional information, including INO.com’s relationship with Magnifi.
To have Magnifi Personal run similar comparisons for you, or to dive deeper into this one and compare the two REITs using different criteria, get access to Magnifi Personal completely free-of-charge – just click here!
As you can see, over three years, AMT comes out on top in terms of both returns and volatility.
This ability to have an investing AI pore over reams of data for you in seconds and spit out an easy-to-understand comparison of two or more stocks is an invaluable tool in deciding where to invest next.
We highly recommend you try it out. Click here to see how.
Magnifi Personal makes research like this as simple as typing a question. You can easily do this yourself, or ask Magnifi Personal to add other measures to the comparison, including dividend, valuation metrics such as P/E or P/B ratios, gross margin, and more. Just click here to see how to set up your Magnifi Personal account.
Latest from Magnifi Learn: Taxes are important! They fund our education system, roads, and investments in the future of our country. But when you are investing, you need to keep costs in mind and every investment has costs – opportunity costs, fees, and potential losses to name a few.

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In a previous post titled “Platinum Outshines Palladium, Yet Both Offer Opportunity,” I discussed potential opportunities for investors to buy into these two white metals.
The fact that platinum was chosen over palladium by three out of five readers in the ballot was not surprising. The platinum/palladium ratio and the chart setup for platinum futures were both supportive of the title’s argument.
Let’s check on what has changed in one month. We’ll start with platinum futures.
Source: TradingView
The price of platinum futures has been following my predetermined path with remarkable accuracy. I kept the previous annotations for you to see it.

The forecast that the price would reverse around the “golden cut” 61.8% Fibonacci retracement area proved to be successful, as the price tested the support twice and held. Subsequently, the futures price mimicked the trajectory of the blue zigzag, moving to the upside.
This month, the price began to build a sideways consolidation in accordance with the down leg of the blue zigzag.
Last time we observed a minor Bullish Divergence on the RSI, which played out with a short bounce before the last test of support. However, this time we can see a larger divergence, which contradicts the falling valleys on the price chart.
The size of the divergence is significant as it has pushed the price up by more than $100. Currently, the RSI is confirming the sideways consolidation on the price chart as it sits on the important level of 50.
The black dashed line represents a bullish trigger that was added at the latest top of $1,012. A break above this level would confirm the end of the consolidation phase and indicate further upward movement.
The upside target for point D has been adjusted to $1,224, which is $4 lower than previously projected due to the second test of the “golden cut” support at point C.
So, platinum has cleared the “launchpad” for palladium which only hit the crucial support and is yet to take off. Let us check it in the next chart.
Source: TradingView
My previous analysis for palladium futures was based on the monthly time frame and identified a large sideways consolidation in its final stages.
At the time, the price was in the last minor leg down out of the second large move downwards. A positive sign in this pattern is when the price retests the valley of the first large leg down in the second one, confirming the complete consolidation pattern.

Following the previous post, the price of palladium futures experienced a sharp decline and touched the first major valley of 2020 at $1,355. After a minor pullback, it dropped even further to $1,333 completing the large consolidation.
However, the RSI did not confirm this new low on the price chart and instead built a bullish divergence. It played out as it was supposed to, sending the price to the upper trendline of the orange narrowing downtrend.
However, the first attempt to break up failed, and the price retraced deeply without infringing upon the new low.
Currently, both the RSI and the price are near the barriers. The price is poised to explode out of the orange downtrend and a move above 50 for the RSI should provide confirmation. If successful, the initial upward move could follow the blue zigzag pattern, targeting the nearest resistance at $1,765.
Following a consolidation period, the price could then continue its rally towards the second resistance at $2,360. This area between the two barriers represents the consolidation zone before the minor downward move, which has recently been completed.
The price should keep above $1,333 to carry on in the bullish mode.
Intelligent trades!
Aibek BurabayevINO.com Contributor
Disclosure: This contributor has no positions in any stocks mentioned in this article. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.

In an early episode of The Simpsons, “Homer Defined,” Homer saves the nuclear plant from meltdown by randomly pushing a button on the control panel. Soon “to pull a Homer,” meaning to “succeed despite idiocy,” becomes a popular catchphrase.
Is that what happened last week? Did Jerome Powell and the Federal Reserve inadvertently “pull a Homer” by helping to create a bank panic that actually might accelerate their desire to slow down the economy? That might not have been their intention, but it sure looks like it.
At least it does to former White House adviser and Goldman Sachs President Gary Cohn (although he didn’t reference The Simpsons).
“We’re almost getting to a point right now where he’s outsourcing monetary policy,” Cohn told CNBC, referring to Powell. “I don’t believe they [the banks] are going to loan money, or as much money, and therefore we’re going to see a natural contraction in the economy.”

Minneapolis Fed president Neel Kashkari said basically the same thing on CBS’s Face the Nation Sunday.
“It definitely brings us closer [to recession],” Kashkari said. “What’s unclear for us is how much of these banking stresses are leading to a widespread credit crunch. That credit crunch … would then slow down the economy.”
Now, I sincerely doubt that the Fed deliberately phonied up a banking panic in order to put the brakes on the economy.
Just the same, though, it certainly did play a major role in creating one not just through monetary policy — by raising interest rates so high and so fast — but also through neglect.
Just as it did in the road leading up to the global financial crisis, the Fed allowed problems at several banks it regulated to reach the point that generated an electronic run on deposits and the banks’ eventual failure. 
While the details are certainly different, the current episode does harken back to the 2007 mortgage and real estate market meltdowns, which was largely due to regulators — led by the Fed — allowing banks and other lenders to approve mortgage loans for the asking without nary a hint of underwriting for years before it dawned on them to act. By then the mountain of debt had gotten so big and so combustible that the entire global economy was shaken for more than a decade.
Hopefully the current bank panic will remain just that — a panic, and not a full-blown crisis. But we really need to look at how the Fed goes about its business, and something clearly needs fixing.
The Fed is being asked to do two very important things – run monetary policy and regulate large banks — neither of which it seems capable of doing very well, unless it involves throwing massive amounts of money at problems it itself created or ignored.
The system in Canada provides a sharp contrast. There, the Bank of Canada, the country’s central bank, formulates and executes monetary policy, while the Office of the Superintendent of Financial Institutions (OSFI) regulates deposit-taking banks, insurance companies, and private pension plans, among others. Granted, OSFI has a much easier job of regulating about 400, mostly small, banks compared to thousands in the U.S., but it is very strict when it comes to regulation. When was the last time you heard of a banking crisis in Canada?
Yet some people in Washington don’t believe the Fed has enough on its plate. They want the Fed to be a major player in battling climate change and economic inequality, too.
While some of the problems at SVB, First Republic and others were certainly the result of poor management, the root problem appears to be Fed monetary policy that kept interest rates too low for too long.

The banks, like many others, loaded up on supposedly super-safe government bonds with super low interest rates that rapidly sank in value as the Fed raised interest rates. When the deposit runs began, the banks had to start selling off their bond holdings to meet massive withdrawal demands, forcing them to realize huge losses on their portfolios, triggering Fed and Treasury intervention.
While the Fed can probably be forgiven for not imagining a deposit run like this, it should have been perceptive enough to know that a problem was lurking in the banks’ bond portfolios, sitting as they were on possible massive losses if they were forced to sell them before maturity, which turned out to be the case.
“The question we were all asking ourselves over that first week was, ‘How did this happen?’” Fed Chair Jerome Powell said last week. Maybe the Fed’s bank examiners should have known.
If this whole episode does manage to get the Fed where it wants the economy to be without further raising interest rates — i.e., in recession — it certainly doesn’t put the Fed in a positive light.
We might as well have Homer Simpson run the Fed.
George YacikINO.com Contributor
Disclosure: This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.