How to Invest in Commodity Supercycles

Commodity supercycles refer to prolonged periods of rising prices across various commodity markets, typically lasting for a decade or more. 

These supercycles are often driven by a combination of factors such as rapid industrialization, population growth, geopolitical events, technological advancements, and changes in global supply and demand dynamics. 

Here are a few notable commodity supercycles from history:

Post-World War II Supercycle (1940s-1950s): Following World War II, there was a significant surge in demand for commodities as countries focused on rebuilding their infrastructure and economies. This period saw rising prices for commodities such as steel, copper, and oil.

1970s Supercycle: During the 1970s, there was a notable commodity supercycle characterized by high inflation, geopolitical tensions, and supply disruptions. Factors such as the OPEC oil embargo, geopolitical instability in the Middle East, and high demand from emerging economies contributed to sharp price increases in oil, gold, and other commodities.

1990s and Early 2000s Supercycle: The early 2000s saw another commodity supercycle driven by factors such as rapid industrialization in China and other emerging markets, as well as increased demand for commodities from the technology sector. Prices of commodities like oil, copper, and agricultural products experienced significant gains during this period.

Today’s Supercycle: A new cycle kicked off in 2020 on the back of record stimulus and 40-year-high inflation. Gold, aluminum, cocoa and more are already at or near all-time highs. This supercycle should last for another 10-15 years. We are hosting a seminar to help you profit from it on March 28th at 3pm ET. You can register here

During commodity supercycles, resource stocks tend to perform well as they are directly tied to the prices of underlying commodities. 

Companies involved in the exploration, production, and distribution of commodities such as oil, metals, and agricultural products often experience increased profitability and stock price appreciation during these periods. 

Here are some examples of resource stocks and their percentage returns during past supercycles:

Energy Stocks (Oil and Gas): During the 1970s oil crisis, energy stocks saw substantial gains. For example, Exxon Mobil (formerly Exxon and Mobil) experienced significant growth during this period. From 1970 to 1980, Exxon's stock price increased by over 800%. In the early 2000s supercycle, energy companies benefited from rising oil prices. For instance, Chevron Corporation's stock price more than doubled from 2000 to 2008.

Mining Stocks (Metals and Minerals): Mining companies often perform well during commodity supercycles. In the 1970s, companies like Freeport-McMoRan, a major copper producer, saw significant gains. Freeport's stock price increased by over 1,000% from 1970 to 1980. Similarly, during the mid-2000s supercycle, mining companies like BHP Billiton and Rio Tinto experienced substantial growth. From 2000 to 2008, BHP Billiton's stock price more than tripled.

Agricultural Stocks: During periods of rising agricultural commodity prices, agricultural companies may also benefit. Archer Daniels Midland (ADM), a major agricultural processing company, saw its stock price increase by over 600% from 2000 to 2008 during the early 2000s supercycle.

Already in the current cycle, which kicked off in 2020, we have seen tenbagger and even 100-bagger returns on resource stocks in the gold, lithium, and uranium spaces. 

On March 28th, we invite you to attend our ‘Trade of the Decade’ webinar, where we’ll outline top commodities for this current cycle as well as stocks to get positioned in now. 

You can register for free here. Hope to see you then so you don’t miss out on the next round of massive commodity stock wins.

Call it like you see it,

Nick Hodge

Nick Hodge
Publisher, Daily Profit Cycle