Our Commodities Portfolio
Stocks | Date of Initial Coverage | Initial Entry Price | Highest Point | Performance from Initial Entry |
---|---|---|---|---|
HVY | 1688911200 10-Jul-2023 | $0.113 | 244% | 6% |
REZ | 1685887200 05-Jun-2023 | $0.022 | 70% | 29% |
GUE | 1676811600 20-Feb-2023 | $0.150 | 37% | -47% |
MEG | 1676552400 17-Feb-2023 | $0.039 | 151% | -59% |
LYN | 1668949200 21-Nov-2022 | $0.256 | 127% | 23% |
TYX | 1662386400 06-Sep-2022 | $0.017 | 206% | -82% |
SGA | 1658412000 22-Jul-2022 | $0.163 | 243% | -33% |
CAY | 1644757200 14-Feb-2022 | $0.100 | 15% | 15% |
LNR | 1644411600 10-Feb-2022 | $0.029 | 45% | -90% |
AKN | 1643893200 04-Feb-2022 | $0.165 | -12% | -97% |
EV1 | 1637067600 17-Nov-2021 | $0.200 | 70% | -78% |
KNI | 1629813600 25-Aug-2021 | $0.200 | 275% | -18% |
PFE | 1628085600 05-Aug-2021 | $0.200 | -10% | -86% |
RAS | 1625407200 05-Jul-2021 | $0.065 | 815% | -46% |
BPM | 1621346400 19-May-2021 | $0.200 | -28% | -40% |
TG1 | 1617717600 07-Apr-2021 | $0.200 | -28% | -84% |
IRD | 1616850000 28-Mar-2021 | $0.215 | -30% | -71% |
MAN | 1614776400 04-Mar-2021 | $0.080 | -13% | -65% |
EMH | 1614690000 03-Mar-2021 | $1.100 | -11% | -84% |
CCM | 1610974800 19-Jan-2021 | $0.200 | -59% | -70% |
PUR | 1606827600 02-Dec-2020 | $0.014 | 122% | -78% |
LRS | 1606309200 26-Nov-2020 | $0.018 | 2332% | 1036% |
EMN | 1599141600 04-Sep-2020 | $0.065 | 500% | -25% |
MNB | 1598364000 26-Aug-2020 | $0.030 | 483% | 50% |
TTM | 1594130400 08-Jul-2020 | $0.667 | -18% | -31% |
LCL | 1588168800 30-Apr-2020 | $0.036 | 63% | -75% |
GTR | 1588082400 29-Apr-2020 | $0.018 | 0% | -72% |
GAL | 1582981200 01-Mar-2020 | $0.247 | 403% | -44% |
SMM | 1581944400 18-Feb-2020 | $0.200 | -98% | -98% |
VUL | 1566223200 20-Aug-2019 | $0.200 | 3950% | 2315% |
Stocks | Date of Initial Coverage | Initial Entry Price | Highest Point | Performance from Initial Entry |
---|---|---|---|---|
HVY | 1688911200 10-Jul-2023 | $0.113 | 244% | 6% |
REZ | 1685887200 05-Jun-2023 | $0.022 | 70% | 29% |
GUE | 1676811600 20-Feb-2023 | $0.150 | 37% | -47% |
MEG | 1676552400 17-Feb-2023 | $0.039 | 151% | -59% |
LYN | 1668949200 21-Nov-2022 | $0.256 | 127% | 23% |
TYX | 1662386400 06-Sep-2022 | $0.017 | 206% | -82% |
SGA | 1658412000 22-Jul-2022 | $0.163 | 243% | -33% |
CAY | 1644757200 14-Feb-2022 | $0.100 | 15% | 15% |
LNR | 1644411600 10-Feb-2022 | $0.029 | 45% | -90% |
AKN | 1643893200 04-Feb-2022 | $0.165 | -12% | -97% |
EV1 | 1637067600 17-Nov-2021 | $0.200 | 70% | -78% |
KNI | 1629813600 25-Aug-2021 | $0.200 | 275% | -18% |
PFE | 1628085600 05-Aug-2021 | $0.200 | -10% | -86% |
RAS | 1625407200 05-Jul-2021 | $0.065 | 815% | -46% |
BPM | 1621346400 19-May-2021 | $0.200 | -28% | -40% |
TG1 | 1617717600 07-Apr-2021 | $0.200 | -28% | -84% |
IRD | 1616850000 28-Mar-2021 | $0.215 | -30% | -71% |
MAN | 1614776400 04-Mar-2021 | $0.080 | -13% | -65% |
EMH | 1614690000 03-Mar-2021 | $1.100 | -11% | -84% |
CCM | 1610974800 19-Jan-2021 | $0.200 | -59% | -70% |
PUR | 1606827600 02-Dec-2020 | $0.014 | 122% | -78% |
LRS | 1606309200 26-Nov-2020 | $0.018 | 2332% | 1036% |
EMN | 1599141600 04-Sep-2020 | $0.065 | 500% | -25% |
MNB | 1598364000 26-Aug-2020 | $0.030 | 483% | 50% |
TTM | 1594130400 08-Jul-2020 | $0.667 | -18% | -31% |
LCL | 1588168800 30-Apr-2020 | $0.036 | 63% | -75% |
GTR | 1588082400 29-Apr-2020 | $0.018 | 0% | -72% |
GAL | 1582981200 01-Mar-2020 | $0.247 | 403% | -44% |
SMM | 1581944400 18-Feb-2020 | $0.200 | -98% | -98% |
VUL | 1566223200 20-Aug-2019 | $0.200 | 3950% | 2315% |
How to invest in commodities
Macro Outlook Commodities - 2023
The fallout from the Global Financial Crisis (GFC) in 2008 and the years immediately after saw a short term boom bust cycle in the commodities sector.
The subsequent bust in ~2011 led to a period of over 10+ years of depressed commodities prices and broad based underinvestment in new supply.
Then in 2020 the 2 year covid hand brake and the freezing up of supply chains globally made the problem even worse.
Covid made the world realise that relying on other countries for supply of critical commodities is a risk, encouraging many governments to try and discover and develop local supply.
This “security of local supply” theme was turbo-charged after the Ukraine war took all sorts of commodity supply off the market, especially food (Ukraine wheat) and energy (Russian gas).
Supply side problems coupled with increasing demand from the push towards decarbonisation has brought about the idea of a “commodities supercycle” - where demand outweighs supply significantly and commodity prices stay higher for longer.
The commodities supercycle has now entered the lexicon of investors - with big pools of capital now turning to mines, organisations investing upstream to secure battery metals and governments providing funding to secure critical mineral supply.
The history of commodities supercycles is as follows:
- US industrialisation: Late 1890s through to a peak in 1917 - the US was rapidly industrialising and the supercycle peak coincided with the entry of the US into World War 1 and continued until the early 1930s.
- World War and the rebuild: The next supercycle began in the lead up to the Second World War. The war itself and rebuilding in the aftermath required lots of materials - it peaked in 1951, and this demand continued through to the early 60s
- Cold war and nationalisation: The early 1970s marked the start of the third cycle as commodity supply was disrupted as the Cold War saw countries nationalise industries and foreign investors pulled out. In the mid 1980s producers managed to shore up supply and the cycle faded.
- China Industrialisation: The most recent supercycle started in 2000 when China joined the World Trade Organisation (WTO) and started to modernise. The raw materials China needed to do this sparked a long bull run for commodities. The 2008 GFC put a spanner in the works but Chinese stimulus made the cycle continue through to 2014 when oil cratered on oversupply.
Our view is that we are now entering the next iteration of a commodities supercycle for the following reason:
Clean energy revolution & localisation of supply chains - We think the fundamentals for the next supercycle have been set with the world looking to transform the way energy is produced and consumed (through cleaner, renewable energy technologies) AND the push to localise the supply chains for these critical raw materials (Fallout from the Ukraine/Russia conflict).
We think that 2023 will be a year where the tailwinds for the commodities supercycle get stronger and capital starts to flow into the commodities where the biggest supply/demand imbalances are being forecast.
What the analysts say
Goldman Sachs believes that commodities will be the best-performing asset class once again in 2023, handing investors returns of more than 40% (source).
The investment bank has been strong on commodities since calling the start of a commodities supercycle in 2020 and think that 2023 will be another strong year for the sector.
On the supply side Goldman Sachs believes that with the cost of capital high there will be a continued undersupply of commodities in 2023 - as new mines and new production remain underinvested.
On the demand side, the re-opening of China will continue to push commodity demand up as the country looks to re-build from tumultuous years of lock down.
Read the full Goldman Sachs 2023 commodity outlook.
JP Morgan strategist Marko Kolanovic is also calling for the start of the worlds fifth “commodity supercycle” of the last 100 years and thinks that pools of capital flowing into the commodities sector will lead to prices that are a lot higher than most expect.
What about the bear case?
The bear case for commodities is a looming recession.
If a recession materialises and consumption craters, then this would be bad for commodities.
The irony is that the inflationary environment has been caused, in part, due to increases in prices for commodities.
For example, if the price of lithium doubles in the next 12 months, it could make electric vehicles unaffordable for consumers - thus destroying demand.
And if the demand side of the equation changes, due to the inflationary pressures, then commodity prices will fall.
Our Commodities Investments
Heavy Minerals Ltd (ASX:HVY)
Read Investment Memo →
Resources & Energy Group Ltd (ASX:REZ)
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Global Uraniuum and Enrichment (ASX:GUE)
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Megado Minerals (ASX:MEG)
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Lycaon Resources (ASX:LYN)
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Tyranna Resources Ltd (ASX:TYX)
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Sarytogan Graphite (ASX:SGA)
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Canyon Resources (ASX:CAY)
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Lanthanein Resources Limited (ASX:LNR)
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Auking Minerals (ASX:AKN)
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Evolution Energy Minerals (ASX:EV1)
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Kuniko Limited (ASX:KNI)
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Pantera Minerals Ltd (ASX:PFE)
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Ragusa Minerals Ltd (ASX:RAS)
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BPM Minerals (ASX:BPM)
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TechGen Metals Ltd (ASX:TG1)
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Iron Road Limited (ASX:IRD)
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Mandrake Resources Limited (ASX:MAN)
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European Metals Holdings (ASX:EMH)
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FYI Resources (ASX:CCM)
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Pursuit Minerals Ltd (ASX:PUR)
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Latin Resources Limited (ASX:LRS)
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Euro Manganese (ASX:EMN)
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Minbos Resources (ASX:MNB)
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Titan Minerals (ASX:TTM)
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Los Cerros (ASX:LCL)
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GTi Resources (ASX:GTR)
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Galileo Mining (ASX:GAL)
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Tempus Resources (ASX:SMM)
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Vulcan Energy Resources (ASX:VUL)
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Our Commentary on Commodities
Australia announces Critical Mineral Strategy as stocks defy tax loss selling
Weekender
Jun 24, 2023
|Next Investors
|11 min
There’s only 5 trading days left in the financial year. That means the final 5 days of tax loss selling. So far, the May/June months have played out much as we expected, BUT there have been a select few companies out-performing in the gloom...
Goldman Sachs Predicts a Continuing Commodities Supercycle
Weekender
Dec 17, 2022
|Next Investors
|9 min
In this Weekender, we cover the new Goldman Sachs report that predicts 2023 to be a booming year of the continuing commodities supercycle. With next week being the last full trading week of the ASX before Christmas break, we will be launching our Wise-Owl Pick of the Year for 2022, around ~10pm on Monday.
Critical minerals quickly becoming a priority in the EU
Next Investors
Sep 20, 2022
|1 min
Australia announces Critical Mineral Strategy as stocks defy tax loss selling
Next Investors
|Jun 24, 2023
Goldman Sachs Predicts a Continuing Commodities Supercycle
Next Investors
|Dec 17, 2022
Critical minerals quickly becoming a priority in the EU
Sep 20, 2022