Video by BABY Investments via YouTube
Source
In this clip, me & @Deep Value Co revisit the copper thesis. DV told me that he thinks higher prices for copper could happen, but are likely not needed and therefore not sustainable. He told me that $5 copper could happen, but it likely won’t stay there for too long.
In the full interview, we covered different copper stocks, DV’s copper portfolio (or lack thereof) and his plans for purchasing copper stocks, as also the time line on all of that. You can watch the full interview for free over here: https://www.baby-investments.com/interviews
So, I started this podcast by giving a very quick overview where I mentioned that "Fitch Solutions", according to mining.com, forecasts 13% CAGR for copper demand, over the next decade. While, during the last decade, we have seen rather few copper mines get built. Therefore, copper will likely find itself in a supply deficit.
Deep Value Co told me that he is bullish on the copper thesis but is not so bullish on copper prices, and while he expects the fundamentals of the copper market to make for a high-price environment for copper over a rather long period of time, he doesn’t expect the price to stay above $5 for too long, as productions costs across the board are much lower than that.
Even if we go into low double-digit inflation over the next few years, this might push production costs for copper higher, but according to DV, this still doesn’t warrant a copper price of above $5.
I completely missed the copper bull run. First of all, I started looking at copper a bit too late, but even then I could’ve entered and booked some profits, but I didn’t as I thought copper price was already rather higher (this was below $4). I am not yet invested in copper neither in my demo nor in my real portfolio, aside from the little exposure I might be having through some of my gold plays. I will not be entering the copper market soon because I find that there currently are better/cheaper opportunities like uranium, gold & silver. I see more upside in the prices of those commodities, than I see in copper and DV seems to agree with me because in the full interview, he told me that his preference goes as follows:
1. Uranium
2. Gold
3. Silver
4. Oil
5. Copper
Of course, you should know that both me and DV are relatively young and don’t have too much experience. Both me & him missed on the copper bull, so if you decided to listen to us, this will likely be a mistake.
TIMESTAMPS:
00:00 Important notice
00:25 How to watch full interviews for free
01:00 Quick overview of the investment thesis for copper
03:15 Deep Value Co’s copper outlook
06:47 Copper supply growth
07:50 What is a sustainable price for copper?
12:22 Where will copper supply come from?
17:55 Copper production & inflation
21:45 Copper supply could be even slower than expected
24:10 How long will the copper bull run continue for?
Important notice: none of this is financial advice. None of this is an invitation to make any trades. Your capital may be at risk. Consider both of us very biased as we own shares of some of the companies mentioned herein to our own name. You must always do your own analysis and take your own decisions. Before continuing you must read the full disclaimer at the beginning of the video.