Commodities

  • 08 Sep
    Why You Should Be Paying Attention To Bond Yields

    Why You Should Be Paying Attention To Bond Yields

    • It’s extremely important to watch bond yields as they define the health of the economy and financial markets.
    • I was correct last year when I said to short bonds, but now things are changing and shorting bonds is no longer a low risk thing to do.
    • I’ll discuss what to look for to protect your portfolio from what bond yields are saying.

    Introduction

    Last year, I was a bond bear and wrote about how investors should avoid bonds, especially as the FED was announcing a tightening policy. I was right on with my forecasts as bond yields have almost doubled since June 2016 which lowered bond values. More →

  • 31 Aug
    How Things Have Quickly Changed On The Outlook For Copper

    How Things Have Quickly Changed On The Outlook For Copper

    • Everyone was negative on copper just a year ago. Today, most are positive.
    • There are two factors that help determine whether there will be a future turnaround or not for a commodity.
    • The nice thing is that all the data is easily accessible with a bit of research and a long term view.

    Introduction

    I’ve been writing about the imminent supply gap in copper for about a year and a half now. However, when I first came out with this thesis, the copper environment was extremely negative.

    The following headlines are an example of just some of the negativity surrounding copper in the last three years. More →

  • 24 Aug
    Gold Miners Vs. Gold Steaming Companies – There’s A Clear Winner When It Comes To The Better Investment Now

    Gold Miners Vs. Gold Steaming Companies – There’s A Clear Winner When It Comes To The Better Investment Now

    • I’ll compare current operating assets, future potential assets, valuations, costs, and cash flows for Barrick Gold and gold streaming company Franco Nevada.
    • Gold royalty companies have a lean business model and the appeal of constant positive cash flows, no matter the price of gold, is on their side.
    • Gold miners have a history that’s better to forget after terrible investments were made in 2012 when gold prices were high, but are you investing in the past or for the future?

    Introduction

    Two days ago, I described gold royalty, or streaming, companies and how they have outperformed gold and gold miners in the past.

    Today, I want to compare the largest gold royalty company, Franco Nevada Corporation (NYSE: FNV), with the largest gold miner, Barrick Gold Corporation (NYSE: ABX), to determine which is a better investment at this point in time, a gold miner or a gold royalty company. More →

  • 23 Aug
    The Practical Approach To Constructing An All-Weather Portfolio

    The Practical Approach To Constructing An All-Weather Portfolio

    • Creating an all-weather portfolio is pretty technical. Today, I’ll try to make it as practical as possible and give actual investment examples of where to invest.
    • It’s all about risk. Counter to general knowledge, bonds carry large risks at the moment.
    • I’ll describe 4 different investments that will behave differently in 4 different economic scenarios, but all of them offer a yield all the time.

    Introduction

    Two months ago, I wrote a pretty detailed technical article on how to build an all-weather portfolio. The results were quite discouraging as a huge part of the portfolio would have ended up in short term bonds, especially treasuries.

    In today’s article, I want to deviate a bit from the pure technical side and approach the creation of an all-weather portfolio from a practical side that includes actual stocks to buy and doesn’t put as much in treasuries. More →

  • 22 Aug
    Gold Royalty Companies – Reap The Reward Without All The Risk

    Gold Royalty Companies – Reap The Reward Without All The Risk

    • Gold streaming companies carry much less risk than a miner thanks to lower costs and better diversification.
    • However, these companies are still exposed to exploration upside and benefit from higher commodity prices.
    • Most of them even pay a dividend.

    Introduction

    Central banks will continue to print money even if it looks like they are taking a breath now. Therefore, gold investing still remains an important hedge for every portfolio. A hedge that is even cheap if gold prices are at a subdued level. More →

  • 07 Aug
    Palladium Is On The Rise, But Is It Worth The Investment?

    Palladium Is On The Rise, But Is It Worth The Investment?

    • Palladium has been in a deficit for the past 6 years and it’s expected to remain in a deficit for the foreseeable future.
    • Palladium is both a precious metal and an industrial metal which has its pros and cons.
    • I’ll describe a few potential ways to invest in palladium.

    Introduction

    When someone mentions precious metals, the first metal that comes to my mind is gold. However, there are other precious metals and one of them is palladium.

    Palladium, platinum, rhodium, ruthenium, iridium, and osmium form a group of elements referred to as the platinum group metals (PGMs). More →

  • 03 Aug
    This Is What To Watch For When Thinking About Investing In Junior Gold Miners

    This Is What To Watch For When Thinking About Investing In Junior Gold Miners

    • There are many risks—ranging from political risks to meteorological—to keep in mind with junior gold miners. I’ll describe some of them to give you a better picture of what can happen.
    • However, the negative attitude towards junior miners also provides excellent investing opportunities.
    • We’ll look at what makes the stock price of a gold miner move and how to recognize the pattern.

    Introduction

    The VanEck Vectors Junior Gold Miners UCITS ETF (NYSEARCA: GDXJ) has gone through some significant restructuring in the last few months because it was getting too big. The ETF simply had too much in the way of funds to continue buying stocks of junior gold miners (market capitalization below $2 billion), and had to increase the threshold by including gold miners that have a higher market cap. More →

  • 28 Jul
    Miss Out On The Rise In Cobalt & Lithium? Here’s Another Metal To Keep An Eye On

    Miss Out On The Rise In Cobalt & Lithium? Here’s Another Metal To Keep An Eye On

    • Nickel is used in Tesla’s batteries, but its price hasn’t surged like cobalt or lithium has.
    • Supply is expected to be stable while more electric vehicle production could increase demand by 20% per year.
    • A long period of low investments, higher demand alongside stable supply could lead to a spike in nickel prices.

    Introduction

    When most people think about batteries and their composition, they mostly think about lithium as batteries are called “lithium-ion batteries.” However, lithium is only one of the metals that goes into a battery. The approximate amount of lithium used in a Tesla Model S battery pack is 63kg of a 453 kg battery. So there is another 390kg to address. A look at what other metals are used to make batteries for electric vehicles will give us interesting investing ideas. More →

  • 26 Jul
    Central Banks Have Made The Rich Richer. Here’s How To Take Advantage.

    Central Banks Have Made The Rich Richer. Here’s How To Take Advantage.

    • Central banks have intentionally inflated asset prices that benefit those who own assets, while wages and real prices have remained equal.
    • There’s no case for being a saver. The risks are too high for miserable returns.
    • I’ll discuss three options to protect yourself and take advantage of the next quantitative easing rounds.

    Introduction

    In the last 10 years, the financial environment has changed significantly. You might not see it in your everyday life, but the 2007 environment and the environment today are hugely different. The wealth effect hasn’t really worked as Central Banks had planned and has significantly skewed asset values compared to fundamentals.

    In today’s article, I’ll describe what happened, compare it to what the previous situation was, show who benefited from the significant monetary policy market intrusions, and who will keep benefiting in the future to find ways to take advantage of the situation. More →

  • 25 Jul
    Is It Time To Invest In Natural Gas?

    Is It Time To Invest In Natural Gas?

    • There are many influences on natural gas in the short term, but the long term is pretty clear.
    • Despite the growth in demand, there is no supply gap expected, and thus cost and moats should be looked for in potential investments.
    • As the long-term trend is positive, it’s a good thing to buy when there is pessimism in the sector, which is usually for a relatively short period.

    Introduction

    I recently wrote an article on oil where I discussed the implications of and best timing to invest in oil. A commodity that is closely related to oil is natural gas. However, the long-term supply and demand trends are a bit different than those for oil which make natural gas an interesting long-term investment opportunity. More →

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