Usually, I would not consider resource stocks to appropriate value investments for the simple reason that commodity prices are too unpredictable. Unpredictable cash flows and the high levels of capital spending usually required to keep commodity companies functioning, can often result in high levels of debt and a sudden reversal in fortunes. Of course, some times the opposite can be true and resource companies can become 'rags-to-riches' stories, although all you need to do is to look at former Brazilian billionaire Eike Batista to see how quickly the fortunes of resource investors can change.
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