One commodity that seems to be trading more on emotion rather than fundamentals would be copper. According to geologist and financial analyst Matt Badiali, copper demand is much greater than copper supply, which doesn’t explain why the prices of copper have been in a downtrend. Matt Badiali spent much of his career traveling to many countries to inspect natural resource assets. He learned a lot about the business aspects of natural resource companies after speaking to several CEOs. Eventually, he would have a friend of his introduce him to the world of finance, where he discovered that he had the ability to combine finance and geology to make intelligent investment choices in the natural resource sector. Today, he has his own newsletter called the Real Wealth Strategist and subscribers to his newsletter have been able to profit from his advice.
Matt Badiali blames the short-term speculators for driving down the price of copper. Most will agree that supply and demand fundamentals play out in the long run, but they have done nothing to help copper get out of its recent slump. Mr. Badiali says the speculators are letting “fear” dictate their moves in the market. The fear has to do with the ongoing trade war between China and the United States. Many analysts fear that if trade issues with China don’t get resolved, there could end up being a global recession. In a recession, copper prices tend to drop due to a lack of economic activity. Mr. Badiali feels this fear is not warranted. As a geologist, he says it takes many years to get a copper mine to full production and with no new mines coming online in the near term, the current supply deficits are only going to worsen.
Matt Badiali reminds copper bulls that they should stay the course because it is only a matter of time before copper prices trade based on true fundamentals. Many countries are planning to do large-scale electric projects, which are going to need vast amounts of copper. The area Matt Badiali believes will be a life-changer for the wise investors is the electric vehicle. He feels it will disrupt the entire auto sector in the years to come. Electric vehicles also require substantially more copper than traditional vehicles use today.
His LinkedIn Profile: https://www.linkedin.com/in/matthew-badiali-28389158