Commodities have been in a bear market since 2011. Copper had been showing some signs of life but has done poorly for the year. Financial advisor Matt Badiali, who specializes in natural resources, feels that the demand for copper is much greater than the supply. Based on simple supply and demand fundamentals, copper prices should be going up if this is the case. Mr. Badiali feels that “fear” in the market is the reason that copper has been a poor investment choice. He urges copper bulls that the long-term fundamentals for the metal have remained strong and that if new copper supply does not come to the market soon, then copper will be thrust into a new bull market.
— Matt Badiali (@MattBadialiGuru) November 15, 2018
Matt Badiali spent much of his life traveling the world as a geologist. He was attending the University of North Carolina working on his Ph.D. when a friend of his convinced him to get his feet wet by stepping into the world of finance. Mr. Badiali has proven himself that he can pick valuable resource companies to invest in. He recently addressed his followers and informed them that the catalyst for lower copper prices was the trade war between the United States and China. Many of the speculators feel that if the trade war continues, the global economy will enter a recession. In a recession, copper demand plummets. This is the scenario that the speculators picture for copper. Matt Badiali points out that demand for copper today far exceeds the supply and that many copper corporations are anticipating future copper production deficits. As a geologist, he reminds individuals that it takes many years to get a copper mine in operation, meaning there will be several yearly deficits.
Matt Badiali is upset with the irrational behavior of the short-term speculators, but he feels they have created a major buying opportunity for investors with a long-term investing horizon. He feels that the electric car is going to be huge in the years to come. Electric cars require more than twice the amount of copper as traditional cars. Starting in 2019, China is going to require their automakers to have ten percent of their car sales be comprised of electric vehicles. He feels the future for copper remains bright.
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