Since #copper is on everyone's mind today after @PauloMacro thread, I'm going to highlight 2 tweets from Andrew C, whom correctly called the copper top before it was cool.
1. How much copper China's property market consumes:
Unless China goes full retard over stimmies, which is what I think will happen yet has been wrong so far, it's hard to see copper being in deficit until 2024.
Say it with me: China is the ONLY thing that MATTERS
But miners margins are being squeezed & tightness could come faster as marginal producers get priced out. As a wise 🐨 said: "Volatility is the Ally of Quality". The 2024 cliff in supply will ONLY get worse as investors shy away given coppers dramatic price drop!!!
I don't think buying around these parts is such a bad idea if you're a patient investor, but I also struggle to see copper meaningfully rally from here this year unless China stimulus occurs.
My plan is to buy after Summer, after Q2 earnings are priced in. We'll see how it goes!
Personally, I find the valuations of NA steel producers far more interesting than most base metals right now. Dirt-cheap, clean b/s & shareholder friendly policies, what's not to like? With input costs falling & steel bottomed out, it's hard to resist BTFD in size!
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If y'all curious why oil stonks are getting whacked, this is probably it. The build in products + very low implied demand from todays double whammy EIA report tells us that demand destruction in the US is sadly very evident...
I'm incredibly surprised not more picked up on this dramatic increase of import quotas, second half of the year China crude demand will come ROARING BACK!!!
Will be damn interesting to see if they also plan to expand their export quota 👀
Then we also got total crude storage, draining haaard... when SPR releases end in October alongside China ramping up imports, what do you all reckon might occur?
Most pain this week came from my copper picks, but I already knew being early means that it will be a bumpy ride! Still a big believer in copper here, as long as May lows hold I'll 💎✋& gladly accept poor performance. Rather early than late with cyclicals!
Comments:
Used up most of my cash throughout the week, but raised it all back as CPI came in hot & I'm wary of FOMC + VIX expiration next week. I do think containers is an interesting buy down here tho... might just buy it back on Monday or post FOMC 😅
You degenerate fucks got me into gambling a bit with $BAVA, are y'all happy now???
This monkeypox news spread is sus, seems like it will get picked up by the media over the weekend... trusting the shrub & having cash to avoid nasty surprises on Monday isn't such a bad idea 🧐
BAVA is far too late to enter in size, but congrats to those crazy fucks which bought yday. Think it got some juice left if we get a proper #monkeypox scare over the weekend, so I don't mind punting it for fun...
Fundamentally they are losing money, pisspoor revenue. Using the numbers from their last Q their 2022 revenue is like $150M... yet they got a contract for their MONKEYPOX vaccine for that amount!!!
I thought last week was bad, but oh boy this week sure was a rollercoaster. Got absolutely rugged on Monday, made some back Tues/Weds, rugged again on Thursday just to experience FUCK YEAH FRIDAY.
Ended up slightly up for the week, current YTD 91%. Just 3% to go from ATH! 🥳
Overtrade a lot, especially with VTNR. Should have just sat on that one... but oh well, made it back by some nice dip buys on Thurs at least, so w/e! Can't be perfect all the time 🥳
Decided to use the rally to distribute my holdings & rebuild my portfolio!
Not much to say other than I'm back in #copper!!! I think the risk is to the UPSIDE for miners overall after they got dumped 30-40% & signs of Shanghai being back soon, but might be early!
Also might just buy back VTNR on Monday, regret selling that one a lot lol.