Commodities

  • 21 Jul
    Why Investing In Australia Is A Good Idea Now

    Why Investing In Australia Is A Good Idea Now

    • Positive demographics, strong economic growth, a good business environment, and relative cheapness is what you should look for when investing abroad.
    • Australia has it, and on top of it, Australia offers a high dividend yield and a large potential currency tailwind.
    • The ETF is highly skewed toward financials but a decent stock picker can find a few great picks on the Australian stock market.

    Introduction

    Before investing in a country, I first like to check the demographics because it’s an easily predictable trend that has a huge impact in the long term.

    Because demographics are a long-term trend, it’s usually shunned by most analysts, but a population that grows at 3% per year adds at least 30% to a country’s GDP over 10 years in comparison to a country without population growth (think some European countries). More →

  • 17 Jul
    How The Economic Machine Works & Why You Need To Prepare Your Portfolio For It

    How The Economic Machine Works & Why You Need To Prepare Your Portfolio For It

    • Productivity growth is the long-term key, make sure your portfolio follows it.
    • The global distribution of wealth is shifting very quickly.
    • Preparing your portfolio for what’s going to happen doesn’t even cost that much. On the contrary, it is even more profitable.

    Introduction

    Ray Dalio is famous for many things. One of them is his explanation of how the economic machine works where he describes how productivity growth, the long-term debt cycle, and the short-term debt cycle affect an economy.

    Today, I’ll briefly summarize his findings as they are reported in a 300-page document and, most importantly, see how Dalio’s economic philosophy can affect our investing strategies. More →

  • 16 Jul
    Sunday Edition: What Asset Class Rises 300% In 2 Months?

    Sunday Edition: What Asset Class Rises 300% In 2 Months?

    To say the last few months have been wild for cryptocurrencies would be to put things mildly.

    On April 1, all cryptocurrencies combined had a market cap of $25 billion. But by the beginning of June, that number had risen to just over $100 billion. That’s a 300% increase in value in just over 60 days…

    By now, I imagine every investor has heard of bitcoin and it needs no introduction. The digital currency heavyweight itself was up roughly 160% in the same time frame, but the growth of other digital currencies contributed as well. Ethereum, for one, increased 439% in the same two months. More →

  • 06 Jul
    The Only Way To Invest In The Automotive Sector Today

    The Only Way To Invest In The Automotive Sector Today

    • Automotive stocks are best bought in a recession. I’ll explain how patience pays off.
    • There are no indications of a recession, but car sales have already reached their ceiling.
    • However, a new trend is booming and you may want to expose your portfolio to it.

    Introduction

    The automotive industry is a perfect example of sector cyclicality. What’s important for us investors is that cyclicality offers great investment opportunities. However, a lot of patience is necessary as such opportunities usually only arise once in a decade and only when there is a recession.

    If we take a look at Ford’s (NYSE: F) stock price over the last 30 years, we can see how stock price dips coincide with economic recessions. The stock was the cheapest in 1991, 2002, 2008, and 2012 when there was a recession in Europe. More →

  • 30 Jun
    These Correlations Might Make You Reconsider Your Portfolio Exposure To Gold

    These Correlations Might Make You Reconsider Your Portfolio Exposure To Gold

    • Central banks are slowly introducing the markets to higher interest rates, but this is just due to inflation and thus the effect on gold will be positive.
    • Since 1971, the trend for gold, monetary policy, and government debt burdens is clear.
    • Portfolio exposure to gold of 7.5% should be seriously considered.

    Introduction

    Gold prices are difficult to forecast as anything can happen, but as I have already written about how gold should be a part of every portfolio because it is a perfect hedge for economic and monetary turmoil, I’ve decided to write about the current position of gold in relation to economic forces in order to better determine how much of a portfolio should be exposed to gold. You can find my reasoning behind owning gold miners in my article available here. More →

  • 29 Jun
    Oil Is Down. Is It Time To Buy?

    Oil Is Down. Is It Time To Buy?

    • Even if oil prices are volatile, demand is stable and costs are known. This allows us to find the balance value and trade around it.
    • With oil above $50, all big producers are profitable and expanding investments and production, but that’s not a good long-term sign for oil prices.
    • For low risk, high return investments, investors should wait for some kind of panic that pushes oil prices below $40.

    Introduction

    In March when oil prices were around $54 per barrel, I wrote an article that described a low risk, high reward investment strategy related to oil.

    The article, available here, advised readers to wait for oil prices to fall much lower to lower investing risk and increase returns because the long-term oil price is defined by supply and demand surrounding production costs while in the short term, anything can happen as OPEC news can easily move markets. More →

  • 22 Jun
    Why I’m Getting More And More Excited About Copper

    Why I’m Getting More And More Excited About Copper

    • Forecasts on electric vehicle market penetration are getting more bullish.
    • At the same time, copper is already in a supply deficit.
    • Every copper miner is different, so be careful out there.

    Introduction

    I’m a value investor looking for low risk investments that will lead to high returns. Therefore, when I hear Elon Musk talk, I don’t get excited as an investor because the risk is too high for any potential return as there is a probability that TSLA goes bankrupt when a recession comes along or that it doesn’t turn a profit in the next decade as margins will probably get competed away. More →

  • 15 Jun
    Is Zinc Still A Good Investment?

    Is Zinc Still A Good Investment?

    • Zinc is up 20% in the last 12 months.
    • Global zinc inventories and supply deficits might make zinc not just a good investment, but a great investment.
    • The problem is that it’s very difficult to find pure zinc plays.

    Introduction

    Exactly a year ago, I wrote about how between mine closures with limited mine openings and increasing demand, a supply gap in the zinc market was about to be created (article available here). Since then, zinc prices are up about 20% and were up 46% for a moment in November 2016. More →

  • 14 Jun
    Step-By-Step Guide To Building An All-Weather Portfolio In Today’s Environment

    Step-By-Step Guide To Building An All-Weather Portfolio In Today’s Environment

    • I’ll explain what an all-weather portfolio is and why it’s important to think all-weather in this macro environment.
    • It’s important to understand the difference between portfolio asset class diversification and risk diversification.
    • I’ll use imaginary risk calculations to illustrate how to properly build an all-weather portfolio.

    Introduction

    History has taught us that we always have to expect the unexpected. For example, I don’t know whether the U.S. economy is going to continue to expand or whether interest rates will be lower or higher in the future. I can make estimations, account for probabilities, and then invest accordingly, but still, I have to be prepared for anything. More →

  • 12 Jun
    Stocks, Bonds, & Gold, Oh My! What’s The Safest Asset Class Today?

    Stocks, Bonds, & Gold, Oh My! What’s The Safest Asset Class Today?

    • In his search for safety, the average investor usually does it all wrong.
    • Stocks, bonds, real estate, gold, and cash will all probably drop more than 70% once in your lifetime.
    • However, there is an asset class that is much safer and will lead to huge returns, Buffett would call it a “bet on America.”

    Introduction

    When I talk to people that aren’t as obsessed about investments as I am, a word that I constantly hear is “safety.” Everybody wants to do something with their capital without risk and they are in a constant inner fight related to their money and what to do with it. More →

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