Key Updates On Previous Posts
I do have "ask me if I sold" in my bio, but just in case that goes unnoticed I wanted to provide some updates. I haven't been able to link a live portfolio here yet due to issues with my Canadian brokerage. I'm sure some would be disappointed in a few of my returns, given the poor performance of commodity-based equities the past few months, but for the most part I am holding and believe sector rotation has only recently begun.

  • Patriot Battery Metals continues to be my strongest performer (currently up 1188%).
  • Other solid returns include $BRW.V (>100%), $NGEX.V (70%), $FL.V (45%), $STEP.TO (47%). I am pleased that my theses regarding lithium, copper, and energy are proving to be reasonably correct so far.
  • On the downside, however, my hydrogen pick $NXH.V remains a "dog" which I am down 48% on. I still believe in the companies potential & will continue to hold, as exciting developments continue in the growing sector.
  • I have sold my diamond stock, North Arrow ($NAR.V). Diamonds may be a girl's best friend but not so much the equities. I actually still believe in the potential here but felt there were better opportunities to be had elsewhere (namely in the fertilizer sector, so I have reallocated).
  • Gold & silver equities continue to perform poorly, but given the unpredictable events globally, they still constitute approximately 10% of my portfolio.

I continue to hold a basket of junior exploration companies related to copper, nickel, lithium, vanadium, and manganese. If you have any questions about previous posts, please never hesitate to ask for an update.

Perhaps the most important update I wished to provide is related to $SBSW
I first discussed the company on June 9, in a post called "Sibanye Stillwater: A Risky But Potentially Rewarding Play". The company has had a tough year as they faced flooding in Montana, a strike in South Africa, and a pending lawsuit with Appian Capital. SeekingAlpha's Pearl Gray Equity & Research wrote about these risks in an article this morning:

I will add the same caveat that they did:

**_This piece isn't based on price discovery or sentiment. Therefore, I strongly encourage you to use this information as part of your holistic analysis instead of considering it in isolation.
_**

as well as this quote:

It needs to be considered that the company still pays a magnificent dividend and that it has a lot of latitude in the mining space with its 5-year EBITDA CAGR of 47.52%, conveying its cost advantages.

In my view, many of the aforementioned risks remain and must be strongly considered as well as monitored on a regular basis. I believe platinum & palladium could see a significant increase in demand if hydrogen fuel cell vehicles become mainstream. The article below is worth a read if that is of interest to you.

Several countries do have plans to expand the infrastructure of hydrogen refueling stations. If fuel cell self-driving car technology takes the lead in the marketplace, Palladium and Platinum will likely continue to grow in demand and have value both as currencies and as industrial commodities.


Palladium is expected to remain volatile with an improved outlook in Q4.


As always, please DYODD and I'm happy to answer any questions that I can!
post mediapost media
Jennifer's avatar
$22.3m follower assets
Commodity Super-cycle's Temporary Setback
Commodities have suffered a brutal smackdown the past few weeks, leaving many feeling a little lost and confused. No doubt commodity investors recognized the impact a potential recession could have on demand, but the speed of the descent in equity pricing caught most off guard. It's one of the biggest clichés in markets:

Stocks take an escalator up, and an elevator down”.

Cliché or not, it's the truth - and a truth that was difficult to take for believers in the 'Case for the Copper Bull'.

I enjoy being a commodity investor because every single day I am aware of the role they play in my daily life. One of my favourite Twitter accounts is Neil Ringdahl's, a mining engineer/executive in Honduras. Neil frequently posts images of mining activity and he has some interesting stories he shares, including one regarding the Alphamin Resources tin mine in the DRC. Neil knew the helicopter pilot initially scouting the mine who faced ground fire while doing so. Many of the goods we rely on everyday were sourced from dangerous places, the result of child labour, poor working conditions, or environmentally unfriendly practices.

One of the things I hope to accomplish through my posts here on Commonstock is increasing awareness and appreciation of how much energy and metals have done to raise our standard of living. Other countries aren't so fortunate and the Western world should work to make energy poverty a thing of the past, not only in North America & Europe but across the world. North American mining and energy regulations are world-class and something to be celebrated. Unfortunately, with a lack of investment here, we may face increasing shortages resulting in higher prices for consumers, and an increasing level of energy poverty ourselves.



Though I am choosing to discuss copper equities in this post, I hope you will take a minute and watch this video. You may think differently next time you fire up your gas stove, fuel up your vehicle, or reach for a bottle of water:


This morning the Chinese government announced a potential $220B stimulus plan to spur infrastructure investment in the country and the price of copper rose ~4%. Let's just say I am glad I bought the dip and didn't sell any of my conviction picks, despite the panic I felt watching the share prices tank. There may be some bumps in the road, but my initial post on May 3rd regarding "The Case for the Copper Bull" continues to play out, and Jeff Currie of Goldman Sachs agrees:


From today's edition of the Globe & Mail:

Scotia Capital analyst Orest Wowkodaw thinks “the risk-reward proposition for the mining equities remains reasonably attractive.”

“Escalating global macroeconomic concerns from ongoing pandemic lockdowns in China and the impact of rising interest rates and higher energy prices in ex-China markets (which are stoking recession fears), have placed significant downside pressure on most commodity prices,” he said. “Due to weaker demand expectations, we now see most major commodity markets shifting towards a near-term balance or a modest surplus position which is likely to weigh on prices. Despite this uncertainty, we do not anticipate a complete collapse in near-term commodity prices given that visible inventories are low and are projected to remain at reasonable levels until large structural market shortages arrive. Moreover, the supply side also remains under considerable pressure. In the medium to long term, we continue to anticipate the emergence of a new commodities super cycle driven by growing demand from global decarbonization efforts to address climate change amplified by the impact of severe underinvestment in new production capacity.”

“Among the base metals, we continue to prefer copper exposure given low inventories and our forecast of a reasonably tight near-term market, before transitioning to a large medium-term structural deficit due to supply erosion,” said Mr. Wowkodaw. “We also anticipate copper to be among the biggest beneficiaries of global decarbonization efforts."

$TECK.B remains Scotiabank's top pick and one of my copper holdings.


Copper: Critical Today, Tomorrow, and Forever
-The Visual Capitalist

As we go about checking our phones for the latest updates, watching our favorite television shows, or even cooking our daily meals, we often don’t think about the uses of copper and other metals that fuel, power, and drive our modern lives.
From electrical appliances to jewelry, healthcare, and transport—we use copper everywhere–and its applications are only growing as the world moves towards sustainable technologies.

The Material for a Modern Economy

Today’s infographic comes to us from Trilogy Metals and shines a light on the varied uses of copper and the important role it plays in enabling a cleaner, greener future.


Some of my top copper picks in junior mining include:

$FDY.CN
$ACOP.V
$ATX.V
$NGEX.V
$SURG.V
$VCU.V
$MRZ.V
$TM.V

A reminder that junior mining is a high-risk sector and I usually limit my allocations to 1-2%, 5% max for a high-conviction pick. Please don't hesitate to ask me if you have any questions, I always do my best to provide an answer.
post mediapost media
Jennifer's avatar
$22.3m follower assets
A commodity war is brewing
The world could be on the cusp of a commodity war as nations worldwide continue to grapple with growing demand and falling supply of important base metals and critical minerals.

A recession means lower copper prices; equities are cheap and it's worth looking at adding the commodity to your portfolio.

In a recent interview with Kitco News, Robert Minter, Director of ETF Investment Strategy at abrdn, said that investors need to hold some gold as a core asset in their portfolios; however, he added that now is also the time to load up on other commodities, particularly base metals.

Although base metals like copper have been struggling in recent months as global recession fears grow, Minter said that fundamental shifts are occurring within the global economy that will provide long-term support for industrial metals like copper, zinc, and nickel.

Minter said that broken supply chains are forcing many governments to develop their own supply chain of critical metals and minerals. However, as commodities become nationalized, many are starting to worry that there isn't enough supply to meet growing demand needs. He added that this could lead to a commodity war as nations chase down dwindling supplies.
"Supplies of industrial metals like copper are near-all-time low levels," he said. "Maybe we have enough copper to meet current demand, but we can't take any significant demand surprises in industrial metals."


What Is Doctor Copper?

The term Doctor Copper is market lingo for this base metal that is reputed to have a "Ph.D. in economics" because of its ability to predict turning points in the global economy. Because of copper's widespread applications in most sectors of the economy — from homes and factories to electronics and power generation and transmission — demand for copper is often viewed as a reliable leading indicator of economic health. This demand is reflected in the market price of copper.

Why this metal may see an ‘absolutely ballistic’ price spike.
==============================================================
Goldman Sachs metals strategist Nick Snowdon believes the global renewable power drive will push copper prices from the current US$4.29 per pound to US$6.80 per pound by the end of the decade. He adds that the fundamental supply and demand outlook is so dire that he doesn’t rule out an “absolutely ballistic” temporary price spike to over US$20 per pound before 2030.

Mr. Snowdon appeared on Bloomberg’s Odd Lots podcast on May 30 with a remarkably bullish story. The key points were that copper inventories are already low, the metal is largely irreplaceable as an electricity conductor for electric vehicles and renewable power, and there’s little-to-no new copper production on the horizon.

Goldman Sachs estimates global copper production of 24 million tonnes for 2022. Of that only 1.5 million tonnes will be consumed by decarbonization efforts - primarily electric vehicles and new wind and solar power.

Tickers for your watchlist, please DYODD:
$ATX.V $FDY.CN $IVN.TO $NGEX.V $MRZ.V $TM.V $TECK.B
post media
Jennifer's avatar
$22.3m follower assets
Copper Supply Challenge
Altius Minerals and S&P Global Market Intelligence present the Case for the Copper Bull in one slide:

For your watchlist:
$IVN.TO
$TM.V
$FDY.CN
$ATX.V
$VCU.V
$SURG.V
$CDB.V
$KZD.V
$NGEX.V
post media
Jennifer's avatar
$22.3m follower assets
COPPER PRICES TO GO BALLISTIC
Copper prices tipped to go ‘ballistic’ as EV revolution causes supplies to run out

Experts are sounding the alarm about an “extreme” shortage on the horizon that could send prices skyrocketing for scores of essential products.

An “extreme” shortage of copper over the coming decade could drive the price of the crucial commodity up as high as $US100,000 ($140,000) per tonne as supplies effectively “run out”, one expert has warned.

The looming supply shock is being driven by surging demand for electric vehicles (EVs) and other “green” technologies, coupled with chronic underinvestment and lack of expertise required to build new copper mines, according to Goldman Sachs metals strategist Nicholas Snowdon.

For your watchlist:

$ATX.V
$BBB.V
$CDB.V
$FDY.CN
$IVN.TO
$KZD.V
$MRZ.V
$NGEX.V
$TECK.B
$TM.V
$SURG.V
$VCU.V

post media
Jennifer's avatar
$22.3m follower assets
Long Copper - are you?
Bloomberg: Why Copper May Be One of the Tightest Markets the World Has Ever Seen
"the big story in the next decade could be copper"

For your watchlist:

$ATX.V
$CDB.V
$FDY.CN
$IVN.TO
$KZD.V
$MRZ.V
$NGEX.V
$TECK.B
$TM.V
$SURG.V
$VCU.V


See my original post "The Case for the Copper Bull"

post media
Jennifer's avatar
$22.3m follower assets
G&R: Commodity Bull Market's Hardly Begun
Not only is the commodity bull market not over, it has hardly begun. Look carefully at the chart below:

The latest Market Commentary by Goehring & Rozencwajg released on May 18, 2022 is another must read (download link: http://gorozen.com).

If investors had constructed a natural resource equity portfolio consisting of 25% energy, 25% metals & mining, 25% precious metals, and 25% agriculture, they would have significantly beaten the stock market in three historical periods of radical undervaluation (1929, late 60's, late 90's). Another time period in which commodity equities are radically undervalued? Today. Most importantly, in 1970 a similarly constructed portfolio would have returned 400% over a decade, handily beating the stock market which only returned 80% in that inflationary time frame.

G&R states that if the stock market stays at present levels, commodity prices would have to surge 600% to become overvalued relative to the stock market.

"The great commodity bull market has only started, and investors should use any resource market pullback as an opportunity to increase their exposure."

My commodity portfolio includes some of the following:

Energy

$ARX.TO (gas & condensate)
$SDE.TO (oil & gas)
$WCP.TO (oil)
$VET.TO (oil & gas)
$STEP.TO (oil field services)

Metals & Mining

$AN.V (lithium)
$ATX.V (copper)
$BRW.V (lithium)
$FDY.CN (copper)
$PMET.CN (lithium)
$FL.V (lithium)
$FPX.V (nickel)
$SPC.V (nickel)
$NGEX.V (copper)
$SR.V (vanadium)
$SURG.V (copper)
$VCU.V (copper)

Precious Metals

$FOXG.V (gold)
$KGC.V (gold)
$OZ.V (gold)
$AU.V (gold)
$APGO.V (silver)

Agriculture

$ERTH.CN (fertilizer)
post mediapost media
Jennifer's avatar
$22.3m follower assets
The Case for the Copper Bull Continues...
"A commodity super cycle has now begun and will carry on for the next 30 years, predicting a 20% rise in copper prices by the end of 2022."

Thank you for the Reuters article, Jon Bond @007

My copper holdings:
$ATX.V
$CDB.V
$FDY.CN
$FIL.TO
$IVN.TO
$KZD.V
$MRZ.V
$NGEX.V
$VCU.V
$VOY.CN
post media
Jennifer's avatar
$22.3m follower assets
Re-upping my 'Case for the Copper Bull'
Recession and/or low copper price = buying opportunity!

Suggestions for your watchlist:
$ATX.V
$CDB.V
$FDY.CN
$IVN.TO
$KZD.V
$NGEX.V
$SURGE Copper Corp on TSX-V
$VCU.V
post media
Is the projected demand for copper mostly from electric vehicles? Is it possible that EVs production scale is capped because there just isn't enough copper at reasonable prices to make EVs affordable enough for the average consumer? Random thought :)
Add a comment…
Jennifer's avatar
$22.3m follower assets
My Commonstock Portfolio
Still working on getting it linked up to the site, but opened a new account and bought the dip on Thursday. Dip kept dipping on Friday, but I added these names because I believe in them:
$AFM.V (tin, DRC)
$AN.V (lithium brine, Argentina)
$ATX.V (copper, Chile)
$BRW.V (lithium spodumene, Eastern Canada)
$EOG.V (oil & gas explorer, Guyana/Namibia/South Africa)
$FOXG.V (gold, Quebec)
$FPX.V (nickel, British Columbia)
$HZM.TO (nickel, Brazil)
$IVN.TO (exposure to multiple metals incl copper/nickel/zinc, DRC)
$MEG.TO (oil & gas, Alberta)
$NGEX.V (copper/gold/silver, Chile)
$ROK.V (oil & gas, Alberta & Saskatchewan)
$STEP.TO (oil field services, North America)
As always, please DYODD and know that I prefer higher risk/reward opportunities and may trade them quickly, so please ask questions, including if I sold!
Next

Longest holders

Commonstock is a social network that amplifies the knowledge of the best investors, verified by actual track records for signal over noise. Community members can link their existing brokerage accounts and share their real time portfolio, performance and trades (by percent only, dollar amounts never shared). Commonstock is not a brokerage, but a social layer on top of existing brokerages helping to create more engaged and informed investors.