Nick Hodge, Co-Owner of Digest Publishing and editor of Foundational Profits and Hodge Family Office, joins us to review macro investing themes in general US equities and in the commodities resources stock in gold, copper, oil, uranium, and lithium.
We kick things off with the continued break higher in gold and gold equities over the last month, on the back of the banking crisis and expectations around the Fed tightening cycle coming to a pause. This is a wide-ranging discussion that gets into the continued yield curve inversions, if we are still heading towards a “double-whammy” recession, and how that could affect the demand for various commodities.
One of the topics reviewed is that while a longer-term fundamental thesis can be bullish, for something like Dr Copper, it still could show weakness in the medium-term with a contracting economy on the horizon. Investors can take advantage of longer-term macro trends by purchasing into weak corrective periods. We also discussed the recent OPEC+ cuts in oil production, and what that means for the energy space, the precious metals space, and the outlook they see for a slowdown in global growth and demand.
Nick makes the point that investors should use the volatility (both to the upside and downside) for compounding gains when positioning in or trimming out of resource sectors. We touch upon the continued volatility and poor sentiment in the uranium sector, despite a compelling macro fundamental backdrop, and he mentioned having done well getting positioned 2 months back in the more advanced companies that are dual-listed on the big boards like Energy Fuels (UUUU) (EFR), and enCore Energy (EU), while keeping a tight stop in place.
We also revisited the lithium sector, the recent pullback in Li prices due to China reopening, Liontown Resources (LTR.AX) turning down a major takeover offer, and some of the frothiness coming out of the lithium stocks over the last 2 months. While he had lightened up on some positions in the past 2 months, Nick noted that there have been companies like Patriot Battery Metals (PMET) and Critical Elements Lithium (CRE), that have pulled back to levels where he’s been a recent buyer once again.
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