Good afternoon
the world is a casino! And financial markets even more so…as we have seen in the recent GameStop-episode. Dangerous stuff..and equity markets - in parts - are not necessarly exhibiting the underlying value, but the black-and-white bets by a social media crowd! I have to say, though, that hedge funds are not much better, and some of them got what they deserved…when a company shows a short position of more than 200% of tradable shares, you must be a mad gambler to be short!!! And when the Top 15 best paid hedge fund-managers earned a combined 23 bill US$ last year, you know, that changes cannot be that far away!
I reckon that one should have a healthy cash position, some gold , and some farmland alongside a well diversified share portfolio!
Infaltion as measured by the CPI is not raising it´s ugly head as yet!
Base metals are having a very strong day indeed today - I guess financial investors are pushing it as tehy reposition their portfolios….gaining some exposure to huge spending programs around the world. Copper up by 2% in the moment, nickel and zinc by 1.2%. Co and Ni making new, recent highs ( copper is up by about 6% this year already, nickel up by 12% ). Base metal stocks have been consolidating in Australia so far in 2021 - I think that consolidation might well be behind us now.
The entire precious metals complex, led by platinum, is up strongly today as well. And last but not least ( and a negative for mining companies! ), oil is making new recent highs again today.
Mineral Resources - came out with an excellent results! Mining Services doing well, iron ore doing extraordinary well - which is no surprise, given these fantastic prices. Lithium was breaking even last half at the EBITDA-level, which is a good effort, with spodumene trading below 500 US$. But I cannot become very inspired at current all time high prices - they are a high cost producer of iron ore, and at the top of the market, I do not want to buy something which is of significantly inferior quality compared to the big boys!
Northern Star - and the same applies here! Good result, with Pogo starting to deliver very nicely. But tehy are so large now, that I find it very hard to see them at more than just gold exposure. Furthermore, among the larger producers in Australia, you know that I am much more supportive of Evolution, as their cost base is much lower! In general, the gold space is very tired in the moment - so I see little enthusiasm to deploy fresh funds in gold stocks in the moment!
As the Quarterly reporting season has just finished 10 days ago, there is very little happening on the news-front in the moment. Probably a good time to accumulate a few resources stocks ex gold, for now!
Have a nice evening
WS