 Good day, fellow investors. We recently discussed how index funds are in a bubble. All the money goes into US equities, US securities fixed income and how that is very risky. Then what are the other options? Well, I'm going to give you one option. If you look at the commodity index over the next five years, it's down what 40%? Nobody likes commodities. No index funds ETFs. They are not rushing into commodities. Go a little bit more now, but no commodities. So commodities are still really, really cheap. Commodities that I really like is copper in light of global development, growth, electrification. Zinc is also a good commodity. And in this video, I really want to explain, give you a great analysis, risk reward, long-term investment analysis on copper as a metal. And why am I bullish on copper? And why both my portfolios in my stock market research platform have copper exposure through various and zinc exposure through various miners because those A are cheap now. Commodities are cheap now. The cycle reverts over the long-term. When that happens, you make a lot of money and the tailwinds are still strong, no matter trade wars. That's all temporary. The world is still growing. Let's start with the analysis. So copper and other metals in an investing environment. The thing is with copper that many bet on prices going down in case of a recession. On the other hand, many miners leverage themselves and then a recession makes things look really bad for the whole sector. That's why everything is scared to invest. Oversupply leads to low prices and supply gaps lead to extreme spikes. That's normal when you look at the copper price over the last 40 years, huge ups and downs, volatility, and nobody likes volatility. I do. I do. And I like to take advantage of the volatility. So recently, I found a very nice presentation from the Strategic Investment Advisor group and they held a Natural Resources Day with industrial experts at the Hotel Savoy and Bauer and Vil in Zurich. And I will use many of their charts to put copper into a long-term perspective, but also a short-term perspective. Demand for copper is more stable than perceived by those who look at copper prices. It's in line with global growth. So the world will continue to develop, use more copper, especially Asia, Africa continue to develop. That's 5.5 billion people. So those ups and downs, if you put them into a long-term perspective, you see are not that significant. The price volatility of copper is absolutely no indicator for demand. So demand grows depending on economic development and global life demand development. Copper demand will probably stay strong EVs or no EVs. Albeit, I consider EVs and electrification a nice added bonus. So it might really spur copper prices in the long-term. Chinese demand is remaining strong. If we look at the power grid investments that they plan over the next five-year plan, that is still very strong, still a lot of things to build, electrification. Perhaps every light on the streets will have a charging station in the future where the world might be going. Nobody knows in 10, 20 years, but I think we'll be positively surprised and that will be very, very positive also for copper. Then on mine production, it is slowly increasing. It will be declining in the future and the problem is with copper. There isn't enough cheap copper. The cheap copper has been mined. Global mining or grades are going down. The technology is increasing, but the technology isn't developing linearly and there are really hiccups when it comes to mining. You have seen the turquoise hill travel with Oyu, Togu, the mine in Mongolia. They have delayed production for two years, increased copper mining costs, production costs, capex for two billion to commission the plan and that is what copper actually is about. And if you look at those fundamentals, you can take advantage of the short-term view the market has. As I said, copper is not easy to find anymore. It's getting deeper and more expensive to mine. It was actually our great-grandfathers that built today's copper industry. Since 1996, there hasn't been a huge copper discovery. All were made in the future. There is actually less copper out there and demand is growing. So, if you look at the copper resource base, over the last years it's growing at just 0.35% return over years. 60s to 1990s that resulted in very low prices in the beginning of the 2000s. It grew at 1.2%. So, that's something very, very interesting and something I like to play on as a long-term investment because I think there is a margin of safety. The supply side issues are what I like to focus on. Copper, unlike many other metals like iron, has limited supply. So, actually the more loss isn't working in mining because on the supply side you can't really double it that quickly. You cannot do it with copper. Iron ore prices and iron ore costs mining are going down because there are huge ore bodies in Australia, for example, at very low cost. But with copper they are not finding enough to do that. Plus, as copper prices are low nobody invests in copper prices. And those are the cycles that go up and down the cycles I like to take advantage of. Now over the last 3-4 years copper is down again. Low investments in relation to what is needed, which will mean low production in the future, which will mean extreme price spikes. So, you have to buy in a downturn, which we are in now and sell in a boom. A lot of sectors are underinvestment, underinvested, have been underinvested for the past few years, which leads to relatively higher returns on invested capital over time. The long-term trends, you can see the line, you can see the formula. It's pretty clear what will happen. And then again as a protection against inflation we have seen Draghi now pumping more money into the economy as protection against inflation. I think that copper prices, nominal copper prices will continue to go up in the line they have been going up over time. Post-World War II, the value of the copper market has constantly increased at a healthy growth rate and the growth rates is going faster. Thanks to electrification, globalization and prices will follow. As for shorter-term copper prices, those will be above cash mining costs plus a premium. Who would invest in a mining in a mine at 5% return on capital employed? 20% is the minimum. This implies copper prices at above 7,000 per ton. The current price 10 September 2019 is 5,700. This is an unsustainable loss. I assume copper prices over the next decade will be above 7,000, which spikes above 10,000. That is 3.18 per pound, which spikes to 4.5 as a minimum. When that happens, copper prices and copper miners will really be the great beneficiaries and those that are long now will benefit with their portfolio exposures, perhaps even as a diversification play against the index funds bubble. We also have to time things very well as it is possible for them to crash too. A financial fortress investment is always good to me. Low cost producers with low debt that can prevail in any environment. This is the diversification that I have said. We are now, let's say, in the Facebook bubble. We have seen the dot-com bubble and look at what is cheap. Mining companies are extremely cheap. When you look at their CAPE ratio, cyclically adjusted price earnings ratio, that takes into account 10 years of earnings. On copper supply demand balance, even in the worst case scenario, that there is no enough supply to cover it. So we might expect spikes and then there are a lot of gaps, production issues, etc. Further, if India gets more traction and continues to grow with current trades, the sky is the limit. On zinc, similar if India continues to grow, more demand for steel also not that soon as with copper, but over the next 5-10 years, there will be a supply gap with zinc prices spiking. Also, zinc stocks are at really lows now in London. So perhaps also on a short-term basis. So this is my view on copper and zinc. I'm very bullish but you have to play this in a smart way. You have to see how this fits your portfolio and then you can make a decision. So this is the analysis. I am a long London man mining, for example. I made a video about 12 months ago and then it's all about how to balance that in a portfolio. You can check more that in my stock market research platform, as I said. Now, this is very volatile but I think that demand for copper gives a fundamental basis, a fundamental margin of safety, especially when you can buy things on the cheap. You look at the cost curve. There are various miners. I analyzed about 10-15 copper miners, even more over the last year. I really understand the sector and I am ready to balance that exposure in the portfolio over the long-term. If you're looking for something else, something different, something there is outside the investment radar but with good yields. And then you can see also different miners. It's a crazy environment. So you really need to know them all to find those that are like you like them. Little debt, good integrity management, which is the key, which is very rare. Or you can bet on high debt and less integrity management because when those have lower margins but when copper prices go up, those stocks spike. Also go down when copper prices go down. So it depends on you. That's something we can discuss privately or something you can read in my research report. So let me know if you have any questions. Check my stock market research platform, send me an email or a Facebook message. If you like that, more than comments. Thank you and I'll see you in the next video.