#trends 0005 : Commodities


Hi All,

First off, Happy New Year! We survived 2020.

Now let’s talk Commodities. I ended 2020 explaining how I’m starting to re-arrange my portfolio for the next 5-10 years. The first step is to open up small positions in Commodities. I’ve talked about how in times of uncertainty, especially when the Federal money printer is still going brrr, having some allocation into Commodities to preserve your wealth may be wise.

I like to take in knowledge from people much smarter than I am in various topics. One of them is Commodities. From all the insights I’ve been reading up on, Commodities seem to be one of the few undervalued Asset Classes right now. But Commodities can be so confusing because there are so many. We have precious metals like: Gold, Silver, Platinum. We have others like Rhodium, Copper, Uranium. Then things like Cocoa, Oil, Water etc….where do you even begin?

Well, one principle I’ve always kept close to heart is the K.I.S.S principle (Keep It Simple Stupid). Following said principle, I’ve decided to focus solely on the stocks below:

  • First Majestic Silver Corp. (AG) - I’m more bullish on Silver, therefore this will be used for my Silver allocation. I’ve already started to accumulate a small position in this and looking to increase it over time by using the DCA (Dollar-Cost-Average) method.

  • Metalla Royalty & Streaming Ltd (MTA) - This is a way of exposing myself to Gold and Silver via the royalty play, instead of directly into mining companies.

  • Nova Royalty (NVARF) - To me, this was the easiest way to get exposure to Copper and Nickel. I had a 2% allocation in here a month ago, which I just sold to secure a +70% gain. I wish I went in with a bigger allocation when I first bought it. I also like this for the royalty play, similar to Metalla and will probably make this a sizable portion of my portfolio overtime.

  • Blue Lagoon Resources Inc (BLAGF) - I have a tiny allocation in here as well for purposes of having diverse picks and also because this was could have a higher asymmetric upside if precious metals were to explode in price.

My general approach is to Dollar-Cost-Average over time for most of these stocks, because it is never a good idea to go all in at one time. You never know when we could potentially have a huge market correction, which I believe is due soon. Therefore, it is better to have cash waiting on the sidelines to buy the dip.

In the long term though, Analysts are predicting a Gold price of $3000-$4000 and Silver price of $50. Currently, Gold is trading at $1900 and Silver at $26.

🔥 IPO Hotlist

Nothing exciting in the pipeline this week due to the holiday season. That being said, here are the high profile companies that are supposed to IPO sometime in the upcoming weeks to watch out for:

  • Affirm

  • Bumble

  • Coinbase

  • Petco

  • PoshMark

  • Robinhood

  • Roblox

⚖️ Watchlist

I don’t really have anything on my watchlist for this week. Need to see how the first week of 2021 plays out first.

🍯 Bitcoin

Bitcoin broke $33K. Another major milestone and a new all time high established. I actually closed my Bitcoin position at $28K in order to secure some profits. Not sure if that was a smart decision or not because it just seems to keep going up. Either way, one thing I did which turned out to be smart was to use the profits to buy new Bitcoin as a backup. I did this because if it kept going up (which it did), then I wouldn’t be mad I missed out on the FOMO. If I was wrong and it crashed, then I would be down on the free money I made and not the original principle amount I put in. So a win-win either way.

🗺 One More Thing…

The month of January in general has many upcoming catalysts like the certification of election results as well as the swearing in of the new president. But more importantly, The Georgia Runoff is this week on Jan. 5th. The final results may take a few days to tally, but ultimately will determine which party controls the US Senate. This is a very big deal for the markets, therefore any unexpected events may occur.

🔗 Links

  1. EB Tucker: Gold Price Train Will Come Once, Why You Need to Get On Board Now - Stansberry Research

  2. Rick Rule: Uranium Investing Will Be Explosive in 2021 - I Love Prosperity

  3. Frank Holmes maintains $4k gold price target; stocks, bitcoin, inflation to rise in 2021 - Kitco News

  4. What you need to know about the Georgia Senate runoff elections - The Washington Post

As always, this is not financial advice. I use this as a way to journal my thoughts and share with anyone else interested enough to want to read this, as well as for educational purposes only.