Focus on the long term and invest in world class copper stories like Pan Global.
IGNORE THE MARKET NOISE. PAN GLOBAL MAY PRODUCE MULTIPLE DISCOVERIES
If all investors based their investment decisions on rational and conservative estimates of intrinsic value, it would be very difficult to make money in the stock market. Fortunately, the participants in the stock market are humans subject to the corroding influence of emotions. Investors are frequently given to bouts of over-optimism and greed, which causes stock prices to be bid up to very high levels. These same investors are also vulnerable to excessive pessimism and fear, in which case, stock prices are driven down substantially below intrinsic value.
The lesson behind the legendary Ben Graham's Mr. Market parable is obvious. Every day the stock market offers investors quotes on thousands of businesses, and you are free either to ignore or take advantage of those prices. You must always remember that it is not Mr. Market's guidance you are interested in, but rather his wallet.
Beyond 2022, those around the industry are mostly upbeat on copper, given the multitude of positive long-term forces that will be increasingly felt towards the end of the decade:
Clean Energy Transition
For the next 3-5 years, the general consensus is that copper will be a clear winner of the "clean energy" investment theme.
The cost-effective metal possesses several physical attributes, one of them being an excellent conductor of heat and electricity. Other properties include corrosion resistance, ductility, malleability, and the ability to work in a range of electrical networks.
Because of its industrial advantages, copper has been used by human civilizations for thousands of years and is now a key building block in electric applications, transportation systems and civil infrastructure. So, of course, it has a major role to play in the global shift away from fossil fuels and towards renewables.
In fact, analysts at Goldman Sachs are calling copper "the new oil", as the metal is a key part of sustainable technologies, including electric vehicle batteries and deriving clean energy.
"Copper will be crucial in achieving decarbonization and replacing oil with renewable energy sources, and right now, the market is facing a supply crunch that could boost the price by more than 60% in four years," Goldman Sachs wrote in a report May 2021.
Goldman analysts, led by Jeff Currie, also said that more copper will be needed to create the new infrastructure systems required for clean energy to replace oil and gas, but there has not been enough of a focus on this.
The Goldman team estimates that copper demand will therefore significantly increase by up to 8.7 million tonnes by 2030, if green technologies are to be adopted en masse.
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