Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Micro Strategy Bubble Mania - 10th May 24
Biden's Bureau of Labor Statistics is Cooking Jobs Reports - 10th May 24
Bitcoin Price Swings Analysis - 9th May 24
Could Chinese Gold Be the Straw That Breaks the Dollar's Back? - 9th May 24
The Federal Reserve Is Broke! - 9th May 24
The Elliott Wave Crash Course - 9th May 24
Psychologically Prepared for Bitcoin Bull Market Bubble MANIA Rug Pull Corrections 2024 - 8th May 24
Why You Should Pay Attention to This Time-Tested Stock Market Indicator Now - 8th May 24
Copper: The India Factor - 8th May 24
Gold 2008 and 2022 All Over Again? Stocks, USDX - 8th May 24
Holocaust Survivor States Israel is Like Nazi Germany, The Fourth Reich - 8th May 24
Fourth Reich Invades Rafah Concentration Camp To Kill Palestinian Children - 8th May 24
THE GLOBAL WARMING CLIMATE CHANGE MEGA-TREND IS THE INFLATION MEGA-TREND! - 3rd May 24
Banxe Reviews: Revolutionising Financial Transactions with Innovative Solutions - 3rd May 24
MRNA - The beginning of the end of cancer? - 3rd May 24
The Future of Gaming: What's Coming Next? - 3rd May 24
What is A Split Capital Investment Trust? - 3rd May 24
AI Tech Stocks Earnings Season Stock Market Correction Opportunities - 29th Apr 24
The Federal Reserve's $34.5 Trillion Problem - 29th Apr 24
Inflation Still Runs Hot, Gold and Silver Prices Stabilize - 29th Apr 24
GOLD, OIL and WHEAT STOCKS - 29th Apr 24
Is Bitcoin Still an Asymmetric Opportunity? - 29th Apr 24
AI Tech Stocks Earnings Season Opportunities - 28th Apr 24
S&P Stock Market Detailed Trend Forecast Into End 2024 - 25th Apr 24
US Presidential Election Year Equity Performance in the Presence of an Inverted Yield Curve- 25th Apr 24
Stock Market "Bullish Buzz" Reaches Highest Level in 53 Years - 25th Apr 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

How to Double Your Money by Investing in Copper

Commodities / Copper Apr 04, 2013 - 01:10 PM GMT

By: Money_Morning

Commodities

Copper prices are up 170% over the past four years - meaning huge profits for anyone who has been investing in copper.

But now many investors are bailing on the red metal. Prices have slipped about 9% this year, and inventories are soaring.


Copper prices hit an eight-month low today (Wednesday) as slowing economic growth has led speculators to take more short positions on the metal.

Copper inventories also appear to signal low demand. Stockpiles of the red metal in the London Metals Exchange are at the highest level since October 2003.

But what appear to be bearish signals for investing in copper are not the case. Here's what investors need to understand...

A Key Signal for Investing in Copper
With copper, peak inventory levels are usually hit before a price rebound - sometimes with prices doubling in less than six months.

For example, at the start of 2009, copper prices were trading around $1.30 per pound. Copper inventories were nearly 550,000 metric tons.

Within about six months, inventories plummeted by more than half to about 250,000 metric tons, and prices in the same time period rose more than 50%.

The same thing happened in 2010. Inventories again reached 550,000 tons in February, before declining 37% by the end of the year to 350,000. Meanwhile, prices climbed 52% over the same time period to over $4.00 per pound.

Now it looks like we've reached another inventory peak - meaning a copper-price bottom.

So how should investors position themselves for a copper prices rebound?

We asked our investing team for the best pick when investing in copper. They gave us an investment that doubled in 2009 when copper prices rose more than 50%, and climbed about 70% when copper prices rose in 2010.

Investing in Copper
One of the best ways for investing in copper is a mining stock that has huge upside potential.

"Our experts look at this stock and see a bargain," explained Private Briefing investment service editor William Patalon III.

We're talking about Freeport McMoRan Copper & Gold Inc. (NYSE: FCX).

Freeport-McMoRan stock got hammered last year after analysts bashed two energy acquisitions the company made.

Freeport in December announced it would buy McMoRan Exploration Co. (NYSE: MMR) and Plains Exploration & Production Company (NYSE: PXP) - both of which are aggressively producing oil and natural gas through on-shore and off-shore properties in the Gulf of Mexico, California and throughout North America.

But an interesting thing happened as retail investors fled...

"Some of Wall Street's sharpest hedge fund managers bought big blocks of stock in the fourth quarter, right about the same time the stock fell," explained Patalon. "One of them was Omega Advisors' Leon Cooperman, who snapped up more than 3 million shares of the stock - and also publicly stated that he liked the deals themselves."

As Patalon explained, Freeport's recent acquisition gives a "double catalyst" to the company's share price.

"You'll win if copper prices advance, but you're also going to win just from the company itself digesting this acquisition, streamlining it to operations, and getting things right," said Patalon.

Plus, while investors watch the FCX share price climb, Freeport pays 3.8% dividend yield.

For more information on why Freeport is the best way for investing in copper, check out this Money Morning "Buy, Sell or Hold" analysis on why to buy FCX.

Source :http://moneymorning.com/2013/04/03/how-to-double-your-money-by-investing-in-copper/

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in