OI6: A Fundamental Approach to Commodities ft. Ricardo Leiman & Pedro Marion
Top Traders Unplugged
Insights on Energy Markets and Global Gas Dynamics
Exploring the relevance of oil in the energy matrix amidst debates on its future, alongside insights into global gas market evolution with a focus on LNG integration and trading strategies.
In this episode, Moritz Seibert is joined by Ricardo Leiman and Pedro Marion from KLI Asset Management, a UK-based commodities-focused hedge fund. Ricardo and Pedro explain why KLI’s trading approach is rooted in deep fundamental analysis of commodity supply and demand and how they integrate commodity equities into their portfolio. Furthermore, they mention that the strong diversification across their portfolio of about 30 markets allows them to hold directional positions longer term, avoiding stop-outs on short-term price reversals – a feature that’s also an edge. Ricardo and Pedro also provide color on markets which they believe are currently interesting, including copper, sugar, coffee, oil, and EUA emission allowances.
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Episode TimeStamps:
02:09 - Introduction to Ricardo and Pedro
06:18 - What is their edge?
07:57 - What commodities are they trading?
08:46 - Why they don't trade cocoa
11:09 - Acquiring information through networking
13:40 - Why and how do they trade commodity equities
17:15 - What do they consider long-term?
19:38 - Why isn't copper sky rocketing?
22:01 - Their approach to options
22:50 - How they incorporate trend following in their trading
25:24 - Global macro perspectives
27:28 - No hard landing?
28:35 - Is the coal market dying?
31:14 - The outlook of EUAs
35:03 - Do they formulate a price target in their models?
37:08 - A disconnect in the green transition
38:58 - Natural gas market integrating with LNG
40:55 - Their view on the grain markets
43:34 - A quick touch on other markets
44:20 - Thanks for listening
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