Comment of the Day
Video commentary for January 18th 2022
Commodities Boom Sends Industry Titan Glencore to Decade High
This article from Bloomberg may be of interest to subscribers. Here is a section:
Commodities giant Glencore PLC (LSE:GLEN) hit the highest in almost a decade, driven by rallies in everything from metals to coal and optimism for a years-long supercycle.
The world’s biggest commodity trader surpassed its 2018 intraday peak on Tuesday, valuing the Swiss company at about $74 billion. Like its mining rivals, Glencore has benefited from massive global stimulus measures that have stoked demand for raw materials, and has also been a big winner from an energy crunch that sent coal prices to a record high.
A Bloomberg gauge of spot commodities has doubled since early in the pandemic -- reaching an all-time high in October -- as government measures to bolster economies underpinned demand while supply curbs further tightened metals markets. At the same time, a green revolution is boosting long-term prospects for metals including cobalt and nickel for products like batteries.
Glencore is expected to deliver record profits and a bumper dividend when it reports earnings in February. And as the boom draws more investors into commodities, many analysts forecast prices to remain high. Goldman Sachs (NYSE:GS) Group Inc. said that a commodities supercycle has the potential to last for a decade.
My view - The London Metals Index is testing the 2007 and 2011 highs. Those were bumper years for mining profits so this year is likely to be no different. The challenge for investors is those peaks also represented major climaxes ahead of a rapid tightening of monetary conditions and slowing global growth. The question is whether this time is different?
Email of the day on biotech:
I enjoyed your feedback from your Saudi Arabia Conference. Question: could you please give me your opinion on Moderna and Biotech, do you see potential? I made good profit, then bought these stocks again and sit now on a position down 45%. Take the loss and run? thank you for your attention.
My view - Thank you for this question which others may have an interest in. The biotech sector has just seen the promise of MRNA technology vindicated in real time. That ensures there is a strong pipeline of potential products that will create value for years to come. There are trials underway for universal covid vaccines, solutions to the common cold, an HIV and a malaria vaccine to name a few.
Microsoft to Buy Activision Blizzard in $69 Billion Gaming Deal -
This article from Bloomberg may be of interest to subscribers. Here is a section:
Microsoft Corp. said it’s buying Activision Blizzard Inc (NASDAQ:ATVI). in a $68.7 billion deal, uniting two of the biggest forces in video games.
In its largest purchase ever, Microsoft will pay $95 a share in cash for one of the U.S.’s biggest gaming publishers, known for titles like Call of Duty and World of Warcraft but which is also grappling with a cultural upheaval over its treatment of women. Activision Chief Executive Officer Bobby Kotick will continue to serve in that role, Microsoft said. Once the deal closes, the Activision Blizzard business will report to Phil Spencer, who heads Microsoft Gaming.
Adding Activision’s stable of popular titles will help Microsoft expand its own offerings for the Xbox console and better compete with rival Sony Corp.’s PlayStation. Activision has a long history with the Xbox. The publisher’s largest franchise, Call of Duty, became successful largely due to Microsoft’s innovative online platform Xbox Live, which allows players to connect for multiplayer matches. Most of Activision’s games are published on Xbox consoles.
“This acquisition will accelerate the growth in Microsoft’s gaming business across mobile, PC, console and cloud and will provide building blocks for the metaverse,” Microsoft said in a statement Tuesday.
One of the industry’s most legendary publishers, Activision has been mired in controversy for months amid several lawsuits over allegations of gender discrimination and harassment. Kotick, who has led the company for three decades, has been under pressure from employees to resign. The scandal has taken a toll on a company already struggling to adapt to the end of a pandemic-fueled video game boom. In November, Activision delayed two of its most anticipated games and gave a sales forecast for the fourth quarter that fell short of Wall Street’s expectations, sending the shares plunging.
My view - Activision’s culture of ignoring and covering up sexual harassment has been the central factor in the share losing so much of its value over the last 12 months. It poisoned the brand from the perspective of female gamers. News yesterday that a large number of executives were fired was probably a condition set by Microsoft for the purchase. They will certainly wish to begin the merger with a clean slate.
Eoin's personal portfolio short profit taken January 11th
One of the questions subscribers as most often is how to find details of my open traders. To make it easier I will simply repost the latest summary daily until there is a change.
The Chart Seminar 2022
With global vaccination rates rising, the prospect of anti-COVID pills on the horizon and the promise of travel restrictions being dropped, it is time to start thinking about venues for The Chart Seminar in 2022.
Please drop sarah@fullertreacymoney.com a line if you would be interested in attending an event next year, as well as your preferred location.
At present I am looking at a late May date for a London seminar and I am open to other times and locations subject to demand.