WSTRF - Finding Value in Copper and Gold Amid Market Chaos | Benzinga
Source: Michael Ballanger 04/29/2024
Michael Ballanger of GGM Advisory Inc. takes a look at the current state of the markets, and shares some stocks he believes are worth taking a look at.
As the Friday trading session came to a close this week, I had an epiphany of sorts in that instead of standing back and admiring the results while reaching around and patting myself several times on the back, I took the septuagenarian skin on the underside of my left bicep and gave it a rather robust pinch.
Rather than standing there reveling at copper and gold prices trading at or near multi-year highs, I instead decided to look "beneath the hood" at "conditions" that have quickly emerged as the standard bearer for the "Reflation Trade" that is quickly morphing into the new narrative for a large number of gargantuan traders.
Electrification
It was around the beginning of 2023, with the dominant narrative being that electrification metals like lithium and uranium are doing God's work in alleviating the world's sorry dependence on fossil fuels to provide heat and power to a growing global populace. Being a firm believer in the inevitability of electrification, I gravitated to the space not because I felt a moral or social obligation to avoid those necessary evils like oil and gas and coal. I did so because every time I looked into the mirror and saw a predominance of grey follicles in my beard, I came to the realization that my baby-booming generation of investors has little, if any, sway in influencing either market or social trends.
We are a dying breed of old, embittered gold bugs in constant search of that adrenalin rush that sent Foofoo Mines Ltd. in 1985 from $.10 to $2.00 on the release of drill core assays "too good to be true." The reality in most cases was that a cabal of well-heeled traders with cavernous pockets full of excess margin could create junior market mania with three or four well-placed "Buy" orders designed to rip all resistance from any chart brave enough to be shown. As the volume alerts and price screeners kicked into gear, novice investors would clamor to buy any and all offerings that showed up while spreading the newly-found gospel called "King Foofoo" to any and all that might listen.
However, I digress.
The point I make is that the "old ways" of doing business in the junior resource sector have been replaced with the "new ways" by a socially responsible group of faux-liberal (with a small "L") capitalists that will fight the carbon footprint as long as they have a $100,000 Tesla, a new model iPhone, and a pair of stovepipe dress pants too tight and too short for anyone other than a starving Biafran to wear.
The popularity of electrification in the investment narrative brought in huge moves in lithium, nickel, and uranium and I played all of those metals that seemed to explode right after the global central planners decided in March 2020 to shut down world trade and shutter its citizens in a desperate attempt to maintain the status quo of ever-rising equity markets and buoyant real estate. However, because young people these days have been fed a never-ending supply of behavior modification "medicines" (like Ritalin) to keep them "on task" it appeared as though the vast majority of Millennial and Gen-X traders left their meds at home since 2020 lacking both the focus and resolve to stay invested much longer than the time it took for the ink to dry on their month-end statements.
On the topic of Attention Deficit Hyperactivity Disorder or "ADHD" as it has become known, when I was a young lad, as my mother recalled, I was known as an "active child." Teachers referred to me as "fidgety" and "prone to distraction" but it never affected either my behavior or my grades because of the use of a non-pharmaceutical method of attention control.
It was called a "yardstick" and every teacher patrolled the classroom armed with this incredibly high-tech instrument. Just the sight of it protruding from the folded arms of a 110-lb., five-foot-tall, middle-aged lady teaching us geography would immediately imbed the entire list of world capitals into one's memory banks, never, ever to be forgotten lest the wrath of "Old Yardie" come crashing down.
Yardsticks notwithstanding, I made a choice in early 2023 to refrain from falling in love (or lust) with any narrative deemed topical by the new generation of traders that run these markets.
Uranium
I turned to uranium and added Cameco Corp. (NYSE: CCJ) to my other holding, Western Uranium & Vanadium Corp. (OTC: WSTRF) in Q3 2023 and road it from $38 to $52 before exiting the uranium trade when it became apparent that the entire Twitterverse was long uranium juniors in every nook, cranny, and crevice of their investing superstructure.
Since my exit, the two "electrification darlings" of 2020-2023 have lagged badly. However, I remain a uranium "bull" and am seeking a re-entry level, hopefully soon.
Copper
While I was dabbling in the Li and U3O8 trades, I was quietly but steadily accumulating a basket of juniors that were not considered to be seen as "trades" but rather long-term positions with either excellent projects or discoveries and all of them are now fully funded and awaiting the commencement of drill programs in the hunt for or development of the one metal that is used universally the world over — copper.
I told subscribers in late 2022 that the two metals for the decade were copper and gold, with copper being the comprehensive answer to the electrification movement as whatever else happens with the establishment of new energy sources (like nuclear's revival), the current global transmission grid would need to be expanded to accommodate all this new electricity being pumped out of all these new modular nuclear reactors.
Then, along comes another Millennial narrative called "artificial intelligence" and as the mania of the decade fixes its grip on the investment world, they suddenly realize that all of this new computing power brought about by "AI" will require a boatload of additional electricity to power all of those new computers that will allow kindergarten kiddies to compose operatic ...