Hello VYR,
just my personal thoughts here, I see no love in the mining sector, nor change in the sentiment in the near future. When it comes, it will be swift and aggressive. For the time being, commodities are going nowhere. It'll happen at some point. Most of the money still going to coins, chips and AI, with hedge funds exploiting every single opportunity to short and make quick buck. Miners, being capital intensive, are out of favour. Just my opinion.
Commodity crunch"Defying the drop, Munro Partners’ concentrated global growth strategy charted a 12 per cent return during the month. The fund continued to capitalise on its long-term high conviction bet on US chipmaker Nvidia, which advanced 30 per cent in February after its fourth quarter report smashed analysts’ expectation. Other funds to ride the three-month rally to double-digit returns include hedge funds operated by Kardinia and Auscap, neither of which hold substantial short positions based on recent filings.Hedge funds exposed to the commodity sector, however, are among the worst hit. Ausbil’s global resources fund, Paragon’s commodity-focused long-short fund and Regal’s resources long-short fund all lost more than 2 per cent in February alone and remain in the red over three months.The funds have fallen alongside the S&P/ASX 200 Resources Index, which was down 6 per cent in February, as cratering commodity prices and rising costs pinched miners and dragged down share prices.The losses in February have added to an already difficult 12 months for Ausbil’s global resources fund, which is now down more than 50 per cent from a year ago. The fund has been hit by a collapse in battery metals producers and explorers, amid a sustained rout in the price of lithium and nickel.More recently, the fund told investors its long exposure to copper and uranium producers had hurt returns but said it expected lithium prices to recover going forward.“Sentiment towards battery materials has turned positive in recent weeks, and we believe pricing is likely to trend higher,” the fund told investors this week."
The Only Deep Value Left In This Bloated Circus Of A Market
Gold miners have been taken out back and shot, especially when compared to the price of spot gold, which sits near all-time highs. The VanEck Gold Miners ETF (GDX), for example, is 23.8% off its 1 year high while gold is just 2.45% off its 1 year high.
Lepard and Schiff will tell you that the reason miners are trading at such a low multiple is because the models used to predict their future cash flows are still using a predictive gold price in the future of less than $2000 per ounce. I’ve heard Larry Lepard say some models, when you look on a Bloomberg terminal, are still predicting that the price of gold will be $1800 an ounce in a couple of years. You and I, and even the Bitcoin community, know that this isn’t going to be the case. At some point, these models will update—or the market will force them to—and it'll become extraordinarily evident that gold miners represent some of the only value stocks left in the entire stock market, which, as a whole, is grossly overinflated and overvalued.Miners are also getting a lot of hatred nowadays because of how well Bitcoin is doing.
I hear Peter Schiff talk a lot about how people are pulling their money out of gold miners and putting it into Bitcoin. At first, it sounds like he’s just making excuses (or as the bitcoiners say ‘coping’), but I’m sure this is what’s happening. If you look on social media, or you watch financial media, the hype is around Bitcoin as a safe haven asset, not gold. It is reasonable to assume that money is coming out of precious metals and moving into Bitcoin, even by investors who are just rejiggering their allocations and not necessarily abandoning gold altogether.
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