Tom welcomes back Trader Ferg to discuss his investment strategy focusing on undervalued and overlooked sectors, with particular emphasis on commodities like platinum, gold, and uranium. He highlights the importance of positioning early in sectors with tight supply-demand dynamics and understanding long-term fundamental trends. Regarding platinum, Ferg sees significant potential driven by multiple demand factors, including catalytic converters, industrial applications, jewelry, and investment demand. He notes the metal’s supply deficit and believes the current price movement is just the beginning of a potentially multi-year trend. The primary supply is down 6% year-on-year, with recycling also declining, creating a compelling investment narrative.
Ferg discusses his investment philosophy of balancing risk minimization and regret minimization, typically starting positions at 3% and potentially scaling up to 5% for high-conviction investments. He emphasizes the importance of portfolio management and being willing to tolerate some volatility to capture significant upside. The conversation explores broader macroeconomic trends, particularly focusing on Asian energy demand.
Ferg argues that developing countries, especially in Asia, are at the early stages of increasing energy consumption, which could drive significant demand for commodities like coal and oil. He highlights that 6.5 billion people are seeking to improve their standard of living, which will require substantial energy infrastructure and consumption. On the gold market, Ferg believes central banks and institutional investors are still underallocated, and he sees potential for continued appreciation, especially as Asian countries seek alternatives to US dollar-denominated trade. He suggests that while gold might continue to outperform other commodities, individual commodity sectors will experience periodic strong performance.
Timestamps:
0:00:00 – Introduction
00:00:41 – Platinum Analysis
00:05:28 – Opportunity & Timing
00:09:24 – Balancing Risk/Regret
00:14:33 – Platinum Demand Outlook
00:20:28 – Thoughts on Silver
00:24:06 – C.B. & Retail Gold Demand
00:26:15 – C.B. Stimulus & Gold
00:28:00 – Mining Sector & Shorts
00:30:45 – Long-Term Uranium?
00:33:40 – CapEx Cyclicality & Timing
00:37:15 – Low Volatility & Geopolitics
00:41:49 – Ratio Charts & Coal?
00:44:40 – Long-Term Energy Demand
00:49:00 – Asian/Africa Demographics
00:52:25 – Developing World & Energy
00:54:25 – Ratio Analysis
00:58:41 – Concluding Thoughts
01:03:13 – Wrap Up
Guest Links:
Substack: https://traderferg.substack.com/
X: https://x.com/trader_ferg
Trader Ferg is a Full-time trader for going on 8+ years now. He has a habit of hanging out in hated corners of the market that are considered uninvestable. He enjoys sharing his research and thoughts about possible trades and markets.
