Risk/Reward Monitor: Part 2

A Look At Different Commodities & The Setup For The Stocks I Follow

This format is a bit different from the usual company deep dive, but I’m going with the working title of the Risk/Reward Monitor. In part 1 yesterday, I recorded a video on three holdings that I think are very interesting right now: Sable Offshore SOC 0.00%↑, Navios Maritime Partners NMM 0.00%↑, and Calumet CLMT 0.00%↑.

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Risk/Reward Monitor: Part 1

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Today I’ll be writing a bit on my outlook for different commodities, before breaking down a summary of my thoughts on each company in the portfolio. I’ll also talk briefly about some companies in sectors of interest that I don’t own, but might be interesting for readers.

The Precious Metals

I said in my post at the start of this year looking ahead at 2024 that I wouldn’t be surprised to see $2,500/oz gold. Since February, gold has been grinding higher and we’re sitting near all time highs at just over $2,600/oz today. I obviously should have been buying gold miners or royalties with that view on the commodity, but hindsight is 20/20. Silver has been more volatile, but it has followed a similar path since February. I still think we could see $35 by year end, but I think we could see a break to all time highs by the end of 2025.

When that happens, the chase is on, but we will have to wait and see how it plays out. Platinum isn’t exactly a precious metal, but I think it’s arguably the commodity with the most upside over the next 3 to 5 years. I talked about the setup for PGMs and the miners a couple weeks ago, but I think platinum is going to explode at some point. The timing is up for debate, I think two of the most interesting big picture ratios right now are platinum/gold and oil/gold, both of which are near all time lows.

Oil & Natural Gas

I don’t have a good way to pick bottoms in oil, especially with some of the stuff going on in paper markets right now, but I think we are probably going to be capped until the election. After that, I think oil could make a move much higher that might surprise a lot of investors. I have remained a stubborn oil bull, but I don’t think we are bumping around the $70 level by the end of 2025. Natural gas is interesting, but I just can’t find a way to get bullish on the commodity, and by extension, the producers. It has basically just ended up in the too hard pile because of the number of moving pieces, but I don’t really see the same upside in natural gas as I do with oil.

The Watchlist

There are a couple commodities and equity sectors that are on the watchlist for the next couple years. I think copper, the agricultural commodities, and the steel sector all look interesting for a variety of reasons. I haven’t found any stocks that popped off the page, but I think those are three areas that will be worth keeping on the radar.

Calling A Shot On Sable Offshore.

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