Nick Hodge – Macroeconomic Movers, The Chinese Economy, Outlook On Copper and Lithium Stocks
Nick Hodge, Co-Owner of Digest Publishing and editor of Foundational Profits and Hodge Family Office, joins us for a longer-format discussion on the macroeconomic factors moving markets, the Chinese economy, and investing trends in both the copper and lithium markets and their related equities.
On the macro front, we get into the expectations around the Fed rate cutting cycle, inflation trends, how flat GDP growth and stagflation may be more likely than a recession, the widening out of participating sectors within US equities, and the case for higher prices of raw materials in the ongoing commodities supercycle. This leads into a discussion of how significant the health of the Chinese economy is to the commodities sector, but that Nick is not positioning on the long-side strictly because the PBOC is working to stimulate the economy.
This leads into a broader discussion on critical minerals like copper and lithium and how there is a global market at play, much larger than just what is happening in China, and there are longer-term demand drivers at play, that need to be considered over the shorter-term market noise. The conversation gets into all of the policy initiatives for the green transition in energy, and EVs, all the projections around A.I. data centers and how few generalists are really considering the massive amounts of copper that are going to be required over time. Nick lays out that at present he is not heavily invested in senior copper producers or ETFs directly, but has exposure indirection through gold ETFs, but also through a basket of copper juniors like Aldebaran Resources (TSXV:ALDE)(OTCQX:ADBRF), Gladiator Metals (TSXV: GLAD) (OTCQB: GDTRF), and Kutcho Copper (TSXV: KC) (OTC: KCCFF).
With regards to lithium, Nick outlines that it is a prime example of the cyclicality of the commodities cycle and that made a full cycle over the last few years from undervalued, to overvalued, to topping activity and valuations, to a pricing correction, to bottoming activity. He highlights companies in his portfolio like Volt Lithium Corp. (TSXV: VLT) (OTCQB: VLTLF), Patriot Battery Metals (TSX: PMET) (OTCQX: PMETF), Q2 Metals Corp. (TSXV:QTWO)(OTCQB:QUEXF), and the recent Rio Tinto acquisition of Arcadium Lithium plc (NYSE: ALTM) (ASX: LTM) as some success stories in the lithium stocks with recent news.
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