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Technology Stocks : Compaq
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To: Mao II who wrote (50312)2/27/1999 1:06:00 PM
From: rupert1  Read Replies (1) of 97611
 
Mao II: One way to debtors' prison is through the ownership of copper shares which you asked about earlier. I once made a small fortune by owning Magna Copper when it was bought out by Broken Hill Properties. But I sweat in retrospect because we were about 4 months away from a prolonged downturn in the copper market when we were bought out. I also held the shares for over a year, averaging down and finishing with about 150,000. There were times when I thought it was not only dead money, but lost money. Timing is everything.

Conventional wisdom is that copper prices are down and staying down for at least the better part of this year and maybe into next. But so are share prices. In the commodities, the share price always recovers before the price of the underlying commodity. It is all a question of timing. Share prices tend to be affected on a daily basis by macro-economic international news, and one has to keep a constant eye open for labour disputes, political interference and other hazards to production in the various countries where mines are operated. The share prices of smaller companies are very much open to market manipulation.

The assumption is that Europe will come through its current slow growth to a higher levels and, more importantly, Asia will pick up steam in the next few years. This will increase the demand for copper.

Some people like to own companies that have a diversifed basket of metals - including copper. And there are some pure copper plays (although even pure copper plays usually operate in the markets for metals extracted with the copper).

I have recently seen recommendations for Asarco AR and have been watching its price. Phelps is also well diversified.
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