 Good day, fellow investors. I have recently finished my 40 copper mining stocks, refreshing my knowledge, re-looking at the sector as copper stocks are going down. However, I firmly believe copper might be the metal of the next decade and in this video I want to show you what's my investment strategy when it comes to copper and copper miners and by the end of this video we'll see what to take advantage of and what to be careful about. So this is the content of the video. Copper as a metal, the forecast, the supply gap, copper mining, cash cost, copper miners as stocks and the sensitivity to the price of copper, hyperbolic discounting, the jurisdiction and environmental risks, the biggest copper miners aren't necessarily exposed to copper. So let's see. However, copper you can invest through miners which is not an investment for 98% of the population. So continue watching this video if you are an enterprising investor which is 2% of the population. If not, then unfortunately this video is not for you because there is a lot of volatility and it's really difficult to stomach that volatility in the copper mining sector but there could be really a lot a lot of value because what you can lose maximally is 100% which happens very very rarely but the upside is often 2, 3, 4, 5 or even 10 times your initial investment. So be careful about the volatility in the sector. As said copper is consumed in industrial infrastructure, building transport equipment as we know, electrical vehicles, renewables, a very very positive outlook for copper from that demand perspective. On the supply perspective there is also a very positive outlook because the ore grades are getting lower, the copper is getting deeper, it's much more difficult to mine. However, I have been hearing this story about the supply gap coming in copper 2018, 2019, now it's postponed to 2021, 2022. So I would expect it to come somewhere in the next 10 years, not necessarily in the next three years especially if we see a recession. However, you can see how volatile copper is depending on what is invested, what happens, short-term speculation, there is a lot of speculation and related to the investments. In 2011 copper prices were high, investments were very high, which led to oversupply. Now you can see 2016-20 investments are low, copper prices are going up, but new projects really demand higher copper prices. The Lone Star project demands copper prices at above 2.5 to be at zero, thus at 3.5 to make this a viable project to only invest in it and stable copper prices at 3.5 with stable growing outlook. Copper demand is still very good, 3.1% in the world, especially a lot of demand growing from India. If India becomes the next China in infrastructure building, then we'll see a real explosion for copper, but also the other countries in Asia are really growing extremely fast. Urbanization in Asia as people move, as people develop, as the countries develop, more and more people will live in cities, thus more and more copper, plus more and more electrical vehicles, etc, etc, etc. So a lot a lot of copper. As I already showed, this is the supply gap expected. However, if the world hits in recession 2019-20, the demand will stay flat and then we'll pick up only 21-22. So that's something you have to be careful about. Copper will explode, yes, but it might take a little bit longer than what people expect and it might be really a bad situation if we hit a recession now and there is still lower supply with lower demand. That's something to really be careful about and take advantage of it if you can stomach the volatility, not for everybody. How to invest in copper miners? Always look at the cost. The industry average is 1.45, the cash cost, so 50% of miners make some money or break even at zero. This doesn't include the investments upfront in the mine depreciation, etc. So just to show you that 50% of the miners go bust if copper prices are at around 2, which gives us an indication of the downside limit for copper. When it comes to cost, the miners with higher costs have much more sensitivity to higher copper prices. For example, here we have on the left side Taseco, Copper Mountain, really 25% growth in earnings before interest, taxes, depreciation and amortization in case copper prices go up 10%, TEC, for example, which is a little bit diversified, has just a 5% EBITDA growth. Net present value for the projects also really, really depending on copper sensitivity and higher copper prices. Also, a lot of companies change very fast. This is Freeport McMorran. You can see how as copper prices just increased a little bit, their cash flow went from negative 3 billion, free cash flow in 2015 to positive 3 billion, which is a lot of money when things are good. However, if copper prices decline, there might be, again, trouble. However, if you can stomach the volatility, look at this, Freeport was at 2 in 2016, then it went to 20. That's a 10 beggar. So if you invested 2% of your portfolio in Freeport in 2016 or averaged down from, I don't know, 10 to 2, let's say, 4 purchases and then sold on the way up, you would have made a great return, no matter what. In 2014, copper prices were very high. The costs were always there. So the average will always be close to the cost, supply over supply, so always keep in mind that. That is why also Freeport was overvalued in 2014 and it was a completely different company because it had a lot of oil. So that's the potential to take advantage of is the volatility and leverage to small changes in copper prices. Something to be careful about is always look at the debt maturity schedule. Look at here, Freeport, they had a lot of debt, 20 billion of debt in 2016 and then that was maturing in 2017 and that is why the stock went really down because people were afraid that it won't be able to repay the debt and then you have to sell the assets at fire sale prices and that is never good. Something very important when it comes to copper miners is hyperbolic discounting. This means that investors and generally people discount something happening in the long term at much higher rates than in the short term and is something we value investors, patient value long-term investors can take advantage of if we have the patience. So, Kaz Mineral's Russian company that has a growth profile but they recently acquired for 600 million plus 200 million, 275 million of contingent payments, the Bainskaya deposit in Russia from Roman Abramovich and his group and what happened to the stock price they acquired, they paid 600 million, the stock market cap fell from 819 pennies to 471 so almost 50% the market cap fell 1, 2 billion and they spent just 600 million because they invested now for something that will be online in 2029 so in the next 10 years so they will have only outflows in the coming 10 years but it's a great project for the long term and the market doesn't like the long term when it comes to copper everybody wants give me money now now now I don't care about the future and that's something we can take advantage of if we are patient and we carefully position ourselves for the long term and can take advantage of it. I don't need 50 100% in a year if I can position myself to get 20% from this environment over the next 10 years that's amazing if I can get 15% that's also amazing so if I can buy a minor now that I know has the potential to be five times higher in 10 years if I can buy three minors one gets five times higher one is free and one is equal so I tripled my money in 10 years which is an amazing return I just have to have be able to stomach the volatility. Another risk is jurisdiction and environmental risks this is the largest undeveloped copper deposit in the world owned by Ivan Ho some Chinese companies Kamoakakula however Democratic Republic of Congo they just issue a new mining code that increases taxes introduces a 50% windfall profit tax increases royalties five-fold and a lot of miners completely have to change their plans but also copper costs go up less investments in the future less incentive to invest so very very interesting how will this work the market didn't react to this except for lowering stock prices in Congo but that's something to be careful or again to think about to be take advantage another great project is the pebble project mine but it really threatens the Bristol Bay the salmon's there so it will not be approved ever so again environmental permitting is something to be careful about also to be careful the biggest miners aren't necessarily exposed to copper BHP owns part of the Escondida mine which is the largest copper mine in the world but just 28% of the corporate EPTDA is from copper so some exposure but not that much exposure so let me finish with my five views on the copper sector one it's extremely volatile but two if you have a long-term strategy you can do well three especially if you know how to analyze a miner if you know to focus on value on safety then over the long term you're not afraid to average down there was always risk but in relation to the risk reward it is okay check a deeper analysis of land in mining here check my stock market research platform if you want to see more reports about a little bit miners but there will be a lot coming more so feel free to check that if you want to see deeper and deeper analysis on what I'm talking about here and then also something important sometimes you really have to start buying and it the best time to buy is when everybody is afraid so I really bought nevsoon you can check my articles here october 30 2017 nevsoon is a serious takeover target these prices I made a video published it also around the world and you can see here nevsoon had value but if I went reading the comments on chat boards on youtube about the company it was all this will go bankrupt they will lose this they will lose that they will lose operation in every tree they will get fine suit whatever however you have to go against that and the best time to buy is when nobody likes it of course there was value in the projects the chinese bought it and we had I don't know 85% return a little bit less for me because I started to buy a little bit early with a part of my position but still a very good return over the last two years so if you're interested in this copper exposure if you believe in the metal if you want some portfolio exposure subscribe to the channel because that's what we do here we analyze let's say asymmetric risk investment opportunities where the risk is calculated and the upside is very pretty much unlimited 510 percent over the long term so subscribe if you want to more to hear more about the mindset more about different opportunities check my other videos on copper miners landing mining so looking forward to a comments to discuss this more into that and don't check don't forget to check my reports on my stock market research platform the link is in the description below and there are also some free reports which you can look in the preview mode thank you and I'll see you in the next video