9th May '21 by Edmund Shing

14 comments 3269 reads

Copper is coining it

Summary:

Videos: Investing with kids
Podcast: Should we worry about ballooning government debt?
The Great Commodities Bull Market: Copper and lumber hit all-time highs
Non-equity sources of income

New piworld videos:Investing with kids

Tamzin and I discussed how to get children involved with investing. There may even be some hints and tips for parents too! Here are two video interviews:

piworld talks to Edmund Shing about Introducing your kids to investing - Part 1

The first in a series of introducing your kids to investing. Here, Edmund outlines why we should all be interested in investing summarised by The Rule of 72, the number of years required to double your money at a given interest rate.

Edmund shares his experience of engaging his children in investing and covers some considerations valuable to introduce anyone to investing. Later episodes will cover further steps of the investing journey.

piworld talks to Edmund Shing about Introducing your kids to investing - Part 2 Funds

We join Edmund again to introduce us to funds, how we should construct a portfolio with funds, and what we should look for. A great introduction to the basics for any newbie investor.

New podcast: Should we worry about ballooning government debt?

Why is debt growing so fast?
Who lends money to governments?
Does it matter if public debt reaches astronomical levels?
Is increasing government debt truly justified?
Do governments need to pay back all their debt?

Should we worry about ballooning government debt?

Investment Strategy Focus: May 21

Investment Strategy Focus May 21: PDF file

Read the short summary for May:

Seasonality urges caution: the old stock market idiom “Sell in May and Go Away” (implying until October) has indeed been historically good advice in general. Equity markets have typically performed poorly in May-June and Aug-Sep.
Low volatility investing for the summer: low volatility and dividend growth strategies are starting to perform well. Cautious investors should consider low volatility, defensive income equity orientation over summer.
More defensive sector recommendations: Upgrade Health Care to Positive, Consumer Staples to Neutral; Downgrade Industrials, Materials down to Neutral (but remain positive on Gold miners).
US residential Real Estate rallies hard: residential property markets are performing well globally, buoyed by housing shortages and ultra-low lending rates. US-listed REITs have steadily outperformed the S&P 500 index since the start of this year. We prefer solid real estate…

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William K

9th May '21

Many thanks Edmund. Yes, copper is looking strong, along with most other metals. Last week I increased my holdings in COPX, Blackrock World Mining Trust (LON:BRWM), Rio Tinto (LON:RIO) and Anglo American (LON:AAL) (apart from COPX they all come with useful dividends). With regard to Renewable Energy, I sold all my ICLN at $22 as the price fell below the 200 day EMA, but will keep watching and probably buy back at $24 - but that could be months away and the money is better used chasing commodity funds and miners.

Sphere

Agreed about copper looking strong into the future as well as the recent past . I’ve just increased my shareholding in Central Asia Metals (LON:CAML) as well as those you’ve listed.

Momoko Miyamoto

Thanks for the great article. Enjoyed your discussion with Tamzin too. Hope your employer doesn't mind you regularly disclosing all these very useful trade secrets. Ref. hybrid debt, I've held a number of these for years as a higher yielding but riskier alternative to bonds. Many of these tend to be illiquid so only make sense as a long term hold for income. Building society permanent interest bearing shares are worth a look too, there's a Nationwide one which is linked to 6m LIBOR and an Investec pref linked to UK base rate, both possibly useful for inflation hedging. £RE.B is about to resume coupon payments thanks to rising palm oil prices and £RAVP yields around 10% from Russian logistics warehouses (I hold all of above as well as a couple of other PIBS). RE.B is high risk but also has 2 years of accumulated coupons which makes it quite interesting at the current SP.

Any thoughts on the sustainability of current PGM prices? I don’t think Rh has a futures market so speculative activity is probably limited but I suspect carmakers are panic buying and stockpiling at present given the current situation with microchips. Virtually every fund manager right now seems to be talking about semiconductor shortages and TSMC, but I reckon 2020 saw unprecedented sales of iPads, laptops, home gadgets etc which will not be repeated for decades if ever. I think the chip shortage will ease faster than current consensus.

ken mitchell

Thanks for yet another superb article Edmund.

Not sure though that you’re right when writing “We now have conclusive proof of a new broad based commodities bull market.....and convincingly broken out of the downtrend that has remained in place since 2008.”

This claim has been made by several commentators recently but is not supported by facts.

Surely the extreme Mining bear market ended at the end of 2015 and not recently?

The Mining Sector lows at the end of 2015 were way lower than at the bottom of the 2008 bear market.

The new mining bull market started in 2016 and not recently. And it could be argued that it’s not a bull market in its infancy but a very mature one.

Figures.

FERREXPO bottomed at around 16p in 2015. Price now is 470p! That’s nearly 30 times higher!

Anglo American bottomed at 220p in 2015 and now £33. About 14 fold gain since then.

Rio Tinto..from £18.98 to £64

EVRAZ from 60p to 660p for 11 fold rise.

KAZ Minerals from 98p to £8.50 etc etc.

JohnEustace

For copper I would also look at £GLEN who I think are the biggest. They are also now a major cobalt producer as a by-product.

I hold all the mining majors and all the PGM South African producers.

Wilkonz,

How do you hold COPX? I'm not able to buy it due to it not having a KIID?

10th May '21

I hold COPX as a spread bet on IG - although I believe it can be bought on IG in a share dealing account. (IG seem to have a lot of US markets unavailable elsewhere).

Good points about the mining boom ken mitchell, and one should not forget that the mining dividends at 4-5% per annum add to their value. But apart from the examples you've picked, the overall mining bull market didn't really take off until about a year ago. If you look at Blackrock World Mining Trust (LON:BRWM) and $XME, which both represent a wide basket of miners and metals, prices were pretty static from January 2017 until after March 2020.

Good points Wilkonz.

There’s no doubt imo that the extreme bear Mining bear market that ended with share price falls far larger than the 2008 lows (e.g Anglo American 70% lower at the bottom than in 2008) did end at the lows at the end of 2015. But yes; the Mining sector drifted lower again after that (though nowhere near back to the 2015 lows) from 2017, and that time bottomed out, like so many sectors, in March last year. So it can also be argued, as so many commentators have, that this Mining bull market started a year ago. Even then though that’s over a year ago and not very recently.

Also some Mining shares are either at, or even above, previous mining bull market peaks, and figures like that suggest this is not a nascent Mining bull market but one where the easy gains have been had.

But that claim can be countered with mining shares often on very low PE ratios (e.g Ferrexpo around 4 even AFTER going up from 18p to 470p). So arguably the Mining sector has not even seen a rerating yet as the share prices have just risen along with commodity prices.

Peter171

A great article, thankfully I have the sector covered!

Westway001

Would you mind sharing with what you have covered it? For example, I have invested in Wisdom Tree enhanced commodity UCITS which has gone down whilst most other things have gone up...

Caper4

11th May '21

great article Edmund. Many thanks. A friend of mine is the founder and major investor in a Canadian listed company ,First Quantum Minerals FM . Mainly operate in Zambia and the founder/owner is extremely bullish about the future . Not sure if you have come across this company ?

Rusty2

That seems to be WT ENHANCED COMMODITY UCITS ETF (LON:WCOG) which is mainly US Govt. Bonds?

If you want exposure to copper then you could consider Wisdomtree Commodity Securities ETC (LON:COPA).

I can't buy £COPX in my ISAs or else I would probably hold that as well.

I do also hold Central Asia Metals (LON:CAML) and Phoenix Copper (LON:PXC) which are miners.

Hartshay

2nd Jun '21

Copper doing well. However uranium shoot up ....

Market Musings 09/05/21: Copper is coining it

Copper is coining it

Summary:

New piworld videos:Investing with kids

piworld talks to Edmund Shing about Introducing your kids to investing - Part 1

piworld talks to Edmund Shing about Introducing your kids to investing - Part 2 Funds

New podcast: Should we worry about ballooning government debt?

Should we worry about ballooning government debt?

Investment Strategy Focus: May 21

Investment Strategy Focus May 21: PDF file

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Edmund Shing

14 comments

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