Base Metal Investor Sentiment Decoupled From Reality
Let’s start with a basic assumption, the “fundamentals” and financial markets do not always move congruently. At the present time, I get the sense that a significant portion of investors involved with, or who follow, base metals are quite skeptical of the prices and performance within the complex. A few variables these skeptics get focused on are supply growth and a total lack of demand.
Skeptic Supply Argument: supply growth will exceed demand growth. I will candidly admit I have no idea about the time frame these folks are focusing on. It is possible that supply growth could outstrip demand growth in 2010 (although I doubt it), and of course should this theory come to fruition the basic metals may face some headwinds…but does that automatically make it the norm? Not a chance. I have previously posted an article on the notoriously over-optimistic supply expectations in this industry which can be seen by clicking here.
Investing, Long Term Investment, stock market | admin March 25, 2010
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