July 27, 2024, 3:04 a.m.
Should you invest in miner or their commodities?
July 17, 2023
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Keith McLachlanDo you own the miner or the actual commodity. Pros and cons.
In summary:
- Commodity bear: If you are bearish on a commodity, hold neither it nor those that mine it. Neither should benefit here.
- Cost pressures and supply challenges: If you are bullish on a commodity but see high(er) inflation and/or mining-related risks/supply shocks, consider holding the physical over the miner (unless you can find a low cost-curve miner with low-risk production).
- Commodity bull: If you are bullish on a commodity and not worried about inflation or mining-related risks, then consider holding the miner over the physical.
- Uncertain but want to participate: Consider not investing in either miner or commodities. Rather consider investing in those companies that supply them, such as Master Drilling Group (Read: Expect the lights to be shot out).