This Is Bad For Fossil Fuels But Great For Copper

The world is wiring everything in sight and is desperate for more electrons, no matter how they're derived. The resulting investment thesis: 'Buy everything related to power generation.' OurPortfolioreflects this, with oil, uranium, and copper all well-represented. But there's another scenario that leads to a very different conclusion. It goes like this: Breakthroughs in solar and batteries are poised to undercut the cost of other energy sources, leading to a kind of singularity in which the world quickly shifts from legacy power generation to these next-gen technologies. Here's a video that fleshes out the idea. A transition to ultra-cheap energy would cause demand to explode, turbo-charging the grid build-out. And copper doesn't care which power source wins, as long as the result is a wired world. That's why other commodities are fluctuating while copper marches steadily higher. Here, for instance, are the 'gain/loss' figures for ourPortfolio'scopper stocks: And here are the year-over-year Q2 numbers for one of ourPortfolio'ssenior copper miners: Should we sell our other energy stocks and pile into copper miners? No, the world is still in the 'buy electrons, no matter the source' part of the energy transition, and there's always a risk of another recession, which would punish cyclical commodities. But we should understand what current trends mean for our positions over the long run, and be ready to shift gears accordingly.