Yes, I agree with you, in the medium-longterm horizon great upside. Although, in the short term, for me the water remains murky at best, scary at worst.
I too believe we are headed for an infrastructure investment-led, commodities upcycle. At least, that will be the over-arching theme, as developed countries who can issue debt in their own currencies seek to stimulate their economies out of covid-catalysed recessions. Green investment will be a part of it. And Copper should benefit from all that, yes. In particular, I am hoping China once again spends. However, don't expect the infrastructure credit binge it went on during the gfc, it is a different china today.
However, in the short term, competing with that positive narrative, is the (ongoing) economic carnage caused by covid, and the huge debt overhang (which was already at historical levels BEFORE covid after an 11yr bullmarket) on both corporate and government balance sheets. Without consumer spending power to drive the growth engine, I don't know how this can all just magically turn around? In the macro sense, it is government debt, govt programs, that is keeping millions, upon millions in the world fed and societies from erupting. Without these programs, the natural course of covid would have been at best another gfc and deep recession/depression. And the Fed/central banks saved the financial system, and the equity markets, on Mar-23rd (market botyom) Powell released his statement and $3Tn dollars subsequently flooded both markets and mainstreet.
But, unlike the US which has the world's reserve currency, all other countries can't keep just printing and printing and printing ...not without consequences. That's why I think there is still a reckoning coming coming short term. It will take ages, at least 2 years to vaccinate to whole world. We can't keep this up for 2 yrs. Ozzie govt is already starting to cut back on jobkeeper, for example. And then we're being told that the vaccine doesn't last more than 6-12mths, and you that need two shots per go. Man, there are what..7 Billion people on earth, you do the math.
I caught a plane last month...qantas, it was 60% empty. It lost huge money on that flight. It's stuff like this I'm talking about, that's happening all over. SMEs going bankrupt, and most large businesses taking on debt to stay alive.
It could start with Commercial real estate Loan Obligations (CLOs) on US banks' books, or something else...I don't know, some catalyst. Whatever.
My only point is that the short-term is not as rosy as everyone seems to think. I just wanted to let people know that. Sorry if I scared some folk. HCH is a true longterm play, mining maybe to start something like 2026..but, a lot hurdles and ups and downs to come. Traders beware. Holders need be strong, need conviction, coz it could get very bumpy short term.
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By the way, the EV issue is a little more complicated for me. I confess I'm not sure of the numbers, but it seems to me, on the face of it, EV will not be successful without nuclear base-load (or more fossil fuel power plants), which remains political poison in the west. Green power, even with new battery tech, doesn't have the reliablility of base-load you need for the masses of new power needed.
Thanks for the discussion.
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