Notes from Lunch

With a notable resource investor

Greetings to you from Miami and the bitcoin conference here. What a city, what a few days I’ve had.

Dinner at Michael Saylor’s house last night, hanging out with Robert Kennedy Jr, enjoying the wisdom of Michael Lewis.

I’ll have a write up of it all for you at some point next week. But, the short if it: I remain a happy holder of bitcoin.

In the meantime, I had lunch earlier in the week with a resource investor, of whom I think rather a lot, and I thought my notes from that lunch - our thoughts - might be of some interest to you, so here they are.

1. We both agree the US dollar is going up.

You might have seen my piece on the dollar from a few weeks back. My concern was that it was making a low, and it seems to have. What are the implications?

More pain for metals and mining investors, I’m afraid to say. This will not be good for the portfolio.

2) We don’t think there will be a war

By that, we mean an all-out war between either the US and Russia or the US and China. That does not mean we see an end to what is happening in Ukraine. (By the way Robert Kennedy gave a talk at Saylor’s about the war and what he had to say was extremely insightful. More on this later in the week.)

Proxy wars are a different kettle of fish.

3) Rare earths are overcooked

My friend is Australian, and there has been something of a mania for rare earths. It has mostly passed us by.

4) Lithium is not done

I declared the lithium bull market over, at least for the time being, back in February. I’m now starting to think there might be some more life yet in the old dog, largely because of what has been happening with Andrada (ATM.L), a company I originally bought as a tin play, but that has made what appears to be a major lithium discovery that could prove the company maker.

5) We both like oil but there is a shortage of good places to invest

Oil has been grinding lower and lower, but the long-term fundamentals - we are consuming more and more of it, but investing less and less in producing it - remain in play. I think every portfolio needs to have some oil exposure in it.

My buddy likes tiny caps, and finding tiny caps in the oil space is hard. That said, mid and large caps are easier to find. I cover oil here.

6) He’s super bullish on gold. I’m a bit on the fence

Let me just clarify. I’m a massive gold bug, as I’m sure you know. Everybody should own some. My enthusiasm however is tempered in the short-term, while the US dollar is rising.

7) That makes non-USD producing countries look interesting

If the dollar is rising, profits go up on gold produced in countries with weaker currencies.

8) We didn’t even talk about crypto which means it’s closer to a bottom than a top

No explanation necessary.

I’ll have more on bitcoin, as I’ve said, later in the week, as I’ve said. I like it.

9) House prices are stubbornly hanging on

Never bet against UK property. It defies all. High prices are a function of fiat money, I guess, so they are inevitable.

Even with higher rates, prices are holding on. Will it ever correct? Who knows. Maybe the cycles guys are right and we will have to wait till 2025. Maybe rates need to go higher. With inflation still at 10%, they might have to.