Lobo Tiggre: Why This War Could Put Copper on Sale | War = Hard Assets
Summary
- War-driven inflationary pressures and material consumption for rebuilding efforts (e.g., Iran, Ukraine) bolster the long-term case for hard assets.
- Near-term recession fears from war-related economic disruptions (e.g., Strait of Hormuz closure, higher oil prices) could temporarily sell off copper and copper stocks, creating a buying opportunity.
- Gold and silver are less likely to materially correct on recession fears; investors should wait for larger dips to add positions before the next upward move.
- Central banks are expected to intervene with aggressive monetary stimulus (e.g., "stimmy checks") to prevent a recession, supporting asset prices.
Trade Ideas
"if there's fear of recession that copper will take it on the chin" and "to put copper on sale and copper stocks even more on sale and I would buy that dip". Recession fears triggered by war and its economic knock-on effects (e.g., higher oil prices, trade disruptions) could lead to a short-term sell-off in copper prices and mining stocks. However, the speaker believes central banks will deploy stimulus to avert a recession, making any dip a temporary discount. Copper demand remains underpinned by long-term inflationary trends and rebuilding needs. LONG on dips because the expected sell-off is transient, and copper fundamentals are strong due to structural demand and monetary support. An actual recession occurs despite interventions, reducing industrial demand for copper, or supply chains recover faster than expected, capping price gains.
"I don't think they would sell off in the same way" as copper, and "you should content yourself with buying the bigger dips before we make the next big move higher." Gold and silver are primarily monetary hedges and are less sensitive to industrial recession fears than copper. They may experience corrections or consolidation, but the long-term uptrend is supported by persistent inflationary policies and potential currency debasement. Waiting for larger dips provides better risk-adjusted entry points for long-term appreciation. WATCH for significant dips to initiate LONG positions, as precious metals are expected to resume their upward trajectory over time. A major market crash (e.g., 2008-style) could trigger a broad liquidation affecting gold and silver, or a sudden shift to deflationary policies could undermine their appeal.
