Nick Hodge – The Fed Rate Cuts Begin, A Shift To Value Sectors In US Equities, The Case For Commodities Like Copper And Uranium, And A Site Visit To Hannan Metals
Nick Hodge, Co-Owner of Digest Publishing and editor of Foundational Profits and Hodge Family Office, joins us for a longer-format discussion on the beginning of the Fed rate cutting cycle, as shift from growth to value sectors within US equities, and the case for higher commodities prices in copper and uranium to fuel policy initiatives. We also get a recap on his recent site visit in Peru to visit the flagship exploration project Hannan Metals.
When looking at the macroeconomic factors moving markets, we discuss how the beginning of the central bank rate cuts will impact rate-sensitive sectors like utilities, real estate held in REITs, the financial sector and gold. This brings up the recent trend where money is rotating some out of the magnificent 7 and growth tech stocks, into those types of value sectors, including consumer staples and hard assets.
Shifting over into the commodities and resource stocks, the conversation gets into all of the policy initiatives for the green transition in energy, and EVs, and how the move from coal to nuclear power is obvious, but will require more production from uranium mines, as well as more lithium and cobalt resources to come online for batteries. We also review all the projections around A.I. data centers and how few generalists are really considering the massive amounts of copper that are going to be required. This brings up the point about the long lead times needed to bring mines in to production, and that something needs to be done to expedite permitting bottlenecks. Nick points to the timeline of over a decade to finally see the recent positive permitting outcome for Perpetua Resources (Nasdaq: PPTA) (TSX: PPTA) authorizing the Stibnite Gold Project for their antimony and gold, as an example of how long these processes can take, and the patience required as resource investors.
Wrapping up we discuss the site visit he just returned to from Peru, visiting the flagship Valiente Copper-Gold Project for Hannan Metals (TSXV:HAN)(OTC PINK:HANNF), and the exploration upside present, and some of the unique observations made seeing the project in person and talking to local community and stakeholders.
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Warren Buffet’s cash will not be going into precious metals and he will not be buying miners since none of them approach the financial metrics that interest him.
If you can figure out what Warren Buffet is going to do with his cash, you must be a bigger financial genius than the miracle of Omaha. LOL! DT
Buffet himself has said many times over the years that he won’t incest in PM’s or thwir miners
In the past Buffet has invested in Silver.
He also bought Barrick in the middle of the 2020 surge in gold mining stocks. So it’s not inconceivable that he’d do so again.
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Warren Buffett’s Berkshire Hathaway invested in a gold miner last quarter. Here’s why that’s a huge departure from the past.
Theron Mohamed – Business Insider – Aug 17, 2020
Mr. Buffett is not a fan of gold as an investment. Here are a few of his comments about the precious metal: “ [Gold] gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility.”
Why are men standing around guarding gold in a hole in the ground if it has no utility and isn’t valuable?
It’s a monetary metal, and it’s utility is being a store of value. That’s why central banks all over the planet have been buying it hand over fist the last few years. I guess it has utility for them.
You’d think the “oracle of Omaha” would have the vision to see that…
Since July Jensen Huang CEO of Nvidia has sold $500 million worth of stock and on September 10-11th he sold $26 million. DT
Good on him… It would have been crazy not to ring the register on the Nvidia trade this summer at those nosebleed high valuations. Those buying the other side of those trades became the proverbial bagholders…
That was exactly my point, but it is always better to S-P-E-L-L it out for those who don’t get it, but if you don’t get it, you shouldn’t be investing in the stock market. DT😜😉🤣
Mr Buffett talks his book…
Of course he does.
Fed Cuts Rates by Half Percentage Point – Officials are hoping to prevent a gradual cooling in the labor market from turning into a deeper freeze
Nick Timiraos – Wall Street Journal – Sept. 18, 2024
“The Federal Reserve voted to lower interest rates by a half-percentage point, opting for a bolder start in making its first reduction since 2020. The long-anticipated pivot followed an all-out fight against inflation that the central bank launched two years ago.”
“Eleven of 12 Fed voters backed the cut, which brings the benchmark federal-funds rate to a range between 4.75% and 5%. Quarterly projections released Wednesday showed a narrow majority of officials penciled in cuts that would lower rates by at least a quarter-point each at meetings in November and December.”
https://www.wsj.com/economy/central-banking/fed-cuts-rates-by-half-percentage-point-03566d82