Markets Don’t Turn Overnight
You guys keep finding the most negative news articles to send me. Copper and zinc — you think that this is going to change instantly. These trends don’t change overnight. They just don’t.
And you’ve seen — let’s see — in particular, this was a Bloomberg article from September 4th that copper’s move up is “inexplicable,” and they don’t understand how this is going to continue. And for every one of those you see, there are two or three other ones that say this stuff is going to continue to go up.
This is why we use trailing stops. You will be constantly barraged with news. And what happens is, when you don’t own stocks in a sector, you’ll find all the news that says, “You should own stocks in this sector!”
Everybody wants to own lithium. Everybody wants to own lithium, because we don’t have any positions in lithium right now, and everything you read is positive.
And then as soon as you’re up 30%, 40%, 50%, you’re looking for reasons to sell.
And so, that’s why we put trailing stops in place. We don’t need to be emotional about this. We don’t need to jump when everyone says, “Jump!”
Remember, these news articles are designed to catch your eye. The data in place says that there just isn’t enough copper and zinc supply to meet demand right now.
Will that change in two months? No. Will it change in six months? We could start to see it change in six months. Will it change in two years? Almost definitely. Almost definitely. We’re riding the wave as it comes to us. And, man, copper prices are a tsunami right now. So we’ll take that.
But, really, using trailing stops should take a lot of the guesswork out of owning these stocks. If, you know, we have sovereign risk where Indonesia is stealing half of Freeport’s asset, should we sell?
The trailing stop will tell us.
“I’m really worried about the copper trend. I think it could turn on its head tomorrow. Should I be worried?”
No. That’s why we use trailing stops.
I’ve studied natural resources for over two decades. In fact, I’m considered a commodity investing expert in three industries: Mining, Energy And agriculture I’ve worked on drill rigs, owned oil wells, explored abandoned mines — all to make profitable investments in natural resources.