Copper is the simplest investment thesis anywhere | Forexlive
The best investments are often the simplest ideas. This chart from Goldman Sachs represents the single, most-compelling long-term investment that I know of.
The trade here is obviously miners, especially those near production and it’s trade David Einhorn is making.
The trade has improved in the past month but it’s still not hard to find a miner trading at 6x EV/EBITDA (at current copper prices) with 30 years of proven reserves.
I can’t help but think the market is myopically focused on the near-term and copper oversupply through 2024 rather than the out years. No one wants to be long copper in a recession.
All that said, the reward in this trade looks to me to be far better than the risk and I haven’t heard a compelling case for why it won’t work yet. There’s obviously a timing element to getting the trade just right but is timing it really all that important?
h/t @chigrl