Good afternoon
on Friday, the PMI was a bit weaker in the States - contrary to Europe - and combined with today numbers for Industrial Profits, base metals are taking a dive today so far, despite the weak US$. Weak share prices in China also might play a role. On the contrary, coking coal is abover 200 US$/t for the first time since April,
Gold is testing recent highs and might well be testing 1300 US$/oz today ( and it´s trading just above 1700 A$/oz )
Novo resources, and with it the Australian "conglomerate" stocks, taking a hit on Novo´s "change of exploration strategy".....Novo down another 14% today.
Iron ore was having a new run over the last few days, to 68 US$/t - but only quality is being sought after! the inferior ore from companies like FMG or Mineral Resources is attracting the biggest discount ever, of 40%, which is consistent with the recent China approach, to tighten emissions.According to Macquarie, some re-stocking at steel mills is taking place - the wet season in the Pilbara usually starts some time in late December, and usually, steel mills restock before they can be hit by potential supply-disruptions.
Macquarie Bank´s share price 100 A$ for the first time...if you owned Commerzbank 10 years ago, you have lost 92% of your money...in Macquarie Bank, you´ve made 120%. in Goldmans, + 37%! The right sector call is important - but it does not help, if you get your country-and stock-selection wrong!
Another interesting long term comparison:
if you invested in Blackrock World Mining Fund, Nestor Australien and Earth Exploration Fund 10 years ago, you lost 53%, 46% and 68% resp. Over 5 years, the same funds returned -30% / -38% / -37%. Year to date, the numbers are +9% / +5% +5%. These numbers show, that it´s not easy to outperform your sector - and they also show, just how badly miners have been left behind over the years!
BMW investing 240 mill in a battery-lab. I wished they would be smart enough to invest 240 mill in resources - I reckon that level of investment would guarantee their needs of battery metals for a long time...What I did not like: They are working on the development of a next-generation enigine without the need for Rare Earth. I have no idea, though what next generation means in terms of time-frame..
SXP, Dax and Nasdaq have performed 220% / 119% / 68% over 10 years, and 151% / 103% / 82% over 5 years.
If recent economic numbers around the world are an indication, the next few years might be OUR years....time for catch-up! A disciplined expansion, and EV´s will help to achieve that!
Have a nice evening
WS