Gerardo Del Real,
Editor
April 24, 2024
We are in a commodity supercycle.
My partner and I Nick Hodge explained as much recently in a webinar we put together explaining how we’re positioning for it.
Gold is firmly above the US$2,300 per ounce level. And it has flirted with the US$2,400 level despite a dollar index that has stayed at or near the 106 level as capital inflows from overseas have flooded into the dollar looking for safe harbor from war, election cycles, and a myriad of other catalysts that have reminded the world that despite the tens of trillions of dollars being printed annually, the dollar is still the reserve currency of the world.
Copper is at US$4.40 per pound and headed higher. You get the picture. We finally have commodity tailwinds that will provide a fertile trading environment in stark contrast to what we’ve experienced the past several years.
How to Make Money on Increased Copper Demand
One small mining firm came up with a chemical solution that not only makes getting it easy, but profitable.
So investing is easy then, right?
Go ask Tesla shorts. Tesla just reported a 9% drop in revenues, the biggest year-over-year decline since 2012, a 55% drop in net income, and gross margins of 17.4% (down from 29.1% two years ago). The stock surged 13%.
So even if your thesis that the company is bleeding cash and that margins would be crushed was correct – which it was – your reward was seeing the stock surge 13%.
I have no horse in the Tesla race but I highlight the Tesla example to explain that sometimes what should work won’t work right away. So when subscribers write in and ask why their favorite stocks aren’t keeping up with the surge in commodity prices, I try to explain that gold stocks are not gold, copper stocks aren’t copper, etc.
The right commodity stocks have and will outperform. Yet, in this cycle, it’s going to be critical to know what you’re buying and why.
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There will be healthy consolidations in the commodity space for both the commodities and the stocks… consolidations that should be bought.
Buying the right stocks at the right time and not being shaken out of positions during healthy pullbacks will be the key in this cycle to maximizing gains.
Let’s get it!
Gerardo Del Real
Editor, Daily Profit Cycle