Thread by @METhompson72

This thread is loosely about Rudyard Kipling and his poem “If”.

WE ARE AT AN ‘If” MOMENT

- “If you can keep your head when all about you are losing theirs.” -

Will you be a rabbit in the headlights or have the right portfolio and make the right investment decisions?

What is the big picture?
- 40 year bull market in bonds
- 40 year bear market in interest rates
- 13 years of ultra-easy monetary policy
- Paradigm shift in where energy is sourced
- 13 years of underinvestment in mineral exploration

- Ludicrous valuations and market happenings
- Fundamentals ignored
- “This time is different mentality”

(see GameStop, Hertz, negative yields in Govt bonds, everything crypto, P.E. Ratios in Tesla etc etc etc)

Turns out that YOU CANNOT PRINT MONEY WITH IMPUNITY FOREVER WITHOUT MONEY BEING WORTH LESS
If you do not believe me see Turkey now or Zimbabwe and other historical instances. why would any different result be expected in the US, Europe, Japan, UK??
INFLATION IS HERE TO STAY

This week:
S&P500 down 7.5%
Nasdaa down 13.5%
Oil up 7%
Metals up 7%

The great rotation is underway.

Expect the securities that led the market leaders to collapse most:
- ARK down over 50%
- Crypto down 40%
- German 30yr bonds down 20%

IGNORE EVERY ANALYST AND TALKING HEAD WHO MADE MONEY ON THE WAY UP
- They are mentally unequipped for what is going on

Inflation is not transitory. I
The headline rate will be volatile, but the underlying trend is here to stay.

Energy prices and wage expectations will fuel this spiral. If you think things are bad now, wait until oil hits $150, uranium hits $200 and gas hits $10.

BIG PICTURE;
- The trillions needed to fill the energy gap will go into green tech and renewables.
- Inflation will need to be tamed eventually (once Govts have inflated away their GFC and pandemic debt)
- interest rates are heading towards double-digits by decade end.

- Energy prices, wage demands, input costs, higher cost of capital will consume corporate profit margins
- Higher rates will hit bonds hard
- Higher rates will hit equities harder - particularly growth stocks

Equity indices could easily lose 70%

FILLING THE ENERGY GAP REQUIRES VAST QUANTITIES OF COPPER, TIN, STEEL, NICKEL

Demand UP + Supply static (at best) + Money worth less = MUCH, MUCH higher metal prices

Q: Why are professional money managers not investing more in commodities?

A: Because they remember 2008 when they got annihilated on commodity longs

There is not enough investment expertise in commodities to go around. Capital allocation to metal exploration remains pitiful.

If you don’t look you don’t find
if you don’t find you cannot build
if you don’t build then supply goes doen

Simples!

Liquidity is being withdrawn as Central bankers try to catch up to inflation.(Too little, too late.)

- Crypto is liquidity on steroids; this rout is going to get very ugly indeed as the public now hold much of this so-called asset class

Mining stocks will get sold off alongside general market. Trapped longs will sell what they can sell rather than what they should sell as everyone races for the exit.

This is the “If” moment - can you hold your mining longs? Can you keep your head and add to them?

100% of my portfolio is in metal in the ground.
My money is where my mouth is, I trust my own judgement, I believe in each of the companies I am invested in.
Tungsten West $TUN
Meridian Mining $MNO
Alphamin $AFM