From the conference call with Coxe this week:
"It is to me always a source of amusement that the only time one detects latent Puritanism among analysts and reporters, when talking about the market, is when an asset class that they had never recommended, proceeds to do well. And then, they speak of the evils of speculation. And so, therefore, naturally with the kind of move we’ve had in the base metals and in the stocks themselves, this has been a subject, initially of disdain, then of disbelief…and then outright dismissal, in saying “Oh, it’s all uninformed speculators.”
Now we’ve had some interesting stories along the way. We had the alleged expert on copper who predicted, when copper prices were 1.90, that the Chinese had fabulously manipulated it to catch Western speculators and that copper prices were about to crash. And this was a detailed story, with all sorts of interviews with insiders out of China, telling us that this was going to happen. Well, since then, copper has only had a few down days. And I’m waiting for the sequel from that expert to tell us why at three dollars, we can expect a 50% drop.
What we’ve also had is experts telling us that they’ve rounded it off, that a 25% drop in commodity prices lies just around the corner. Well, if we’re going to have a 25% drop in copper and zinc, this would still be at a price where these companies would make profits far beyond what anybody would have expected from them nine months ago. And if you put the chart of Phelps Dodge up against the price of copper, you’ll see that they track each other beautifully year over year, and they’ve both doubled." |
