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Strategies & Market Trends : Value Investing
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To: Elroy who wrote ()5/17/2024 10:49:18 PM
From: E_K_S6 Recommendations

Recommended By
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Re: Freeport-Mcmoran Inc (FCX)

Finally peeled off 10% of my 9 year old lot of FCX that I bought 7/2015 at $17/share. I have a much larger lot I bought in 5/2019 at $9.70. Will begin to peel off shares as this runs to new all time highs at/above $60/share.

That's a annualized rate of 13% which does not include the 1.5% dividend.

My larger lot bought in 5/2019 if sold today would recognize a 34.84% annualized return (not including dividends).

The purpose of my gold, silver & copper positions is not really to make huge capital gains but to hedge the portfolio against inflation.

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There is a certain type of 'value' investor that believes real 'hard' assets when bought at a discount typically during a commodity and/or boom/bust cycle will achieve much higher total returns w/ minimal risk than other industrial equities and/or even the $SPX index.

You see this in oil, miners & Ag & timber assets. Also in home builders and/or real estate assets.

This copper play is/was especially sensitive to China's demand for the metal, the EV emerging market and the infrastructure copper wire demand in construction & the grid.
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Copper is close to an all time high as is Gold w/ Silver closely following. It's asset inflation as well as the potential for Stagflation (a long sustained inflation rate w/ little to no growth in the general economy). Maybe even deflation???

The Buffett indicator is flashing SELL as the GDP/$SPX is in that over valued area. We see PE expansion and a high relative market PE compared to the 5 & 10 year normalized market PE. Now w/ Gold & Copper at/near All Time Highs many of the indicators are pointing to higher sustained inflation.

I guess the question is why would someone want to hold US dollars over 'real' hard assets that generate FCF AND increase in value at/or faster than the inflation rate.

This does not always end well for equities and I am hoping it will be less painful owning these hard assets in oil, gold, copper & Ag land/timber.
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