To The Moon

With 6 months left before 2023 is officially over, is it timely to explore and see if there is anything else that is worth investing?

One area that I am keen is Metals.

Immediately, metal “gold” comes to mind, right?

Actually, it is a “misnomer” to think that gold is the alternative in times of inflation. Really?

Yes, really (see below).

• Above is US inflation rate through the decades, stopping short of the current cycle.

Gold "mixed" performance during inflation years

• By matching the US inflation table against this table, it shows returns from (a) commodities (b) REITS and (c) gold.

• The outcome is “obvious”.

• Rounding off, latest IG news dated 25 May 2023 indicated that gold prices will end lower as US Treasury yields continue to rise.

• With 2 more planned interest hike by the Fed in 2023, this would further dampen gold prices.

• It is also envisaged that Fed will keep interest rates elevated until it achieves the 2% target.

• Does not bode well for gold in the immediate & medium term.

I was thinking of “copper” as the investible after coming across the above news article.

Copper got off on a “negative” start for the first 5 months in 2023 due to:

• Talk of US recession

• China’s reopening that never really took flight, contrary to many analysts’ belief.

Of late, things are looking up for $Freeport-McMoRan(FCX)$ as the Phoenix-based company:

• Is spotting the strongest balance sheet of any copper miner.

• A strong management team.

• Having the ability to return capital to shareholders.

The good news is that copper prices are starting to tick higher, amid signs of economic resilience.

If copper prices continue to rise, so will Freeport stock.

Copper Futures: 1-Year performance

• Based on past one-year performance, copper price has gained +10.06%.

• Based on past one-month performance, copper price has gained +0.91%.

• Using technical analysis, copper price is upwards trending.

• With China’s 2023 forecasted GDP growth at 5.4%.

• This is “better” than the 4% forecast by Reuters.

• Indicating China’s economic recovery is right on track.

Freeport will also stand to benefit from:

• Long-term adoption of electric vehicles (EVs)

• Other forms of alternative energy.

Freeport Target Price.

Below pls find Wall Street analysts assessment of Freeport:

1. Vertical Research Partners, Mike Dudas has a $57 target price. “Invest now and you could be in the early innings of a long-term copper cycle” he says.

2. Tuttle Capital Management, CIO - Matthew Tuttle, has a modest $47 target price, assuming Freeport only gets back to its 2023 peak.

3. RBC Capital Markets, Analyst - Sam Crittenden, has a $50 target price. “If copper continues to move higher, generally that push estimates higher”.

• Do you think investing in copper is a viable option?

• Do you think copper futures price will continue to recover / rise?

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