The Dollar Cracks. Ferg’s Back. Why Hard Assets Win.

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Right, there's so much going on
in in the market today.

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We, we sat down, we started
writing out our show notes to

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the usual weekly wrap style of
episode.

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And I got AI got a message on
WhatsApp from our good friend

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Ferg, Ferg Cullen, trader Ferg,
as he might be known.

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And I, I turned to you and I was
like, should we just call Ferg

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and see if he wants to join us
for and we'll just have a chin

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wag about a whole range of
stuff.

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And he said, yeah, let's do it.
Called Ferg.

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He said, Yep, 3 hours later,
this is what's happening where

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we, we had brought Fergie in and
money miners.

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I hope you enjoy it.
It's not the usual week.

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We wrapped a bit more broad, but
I just just, it was kind of the

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conversation that I felt like we
all needed to, to have an ear

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out And I tried to figure he's
always so thoughtful about

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things.
He says things simply and I, I'm

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drawn to him.
Let's jump to it.

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I'm so I was so glad to get your
message this, this morning

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because, yeah, I mean, I mean, I
mean, like the, the, the China

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R&B thing.
I almost feel like, you know,

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speak speaking into a, an empty
room.

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But everyone acknowledges that
this is a an important thing,

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important thing to talk about,
but everyone's too scared to

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actually say it themselves.
But you, you might, you're

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unrestrained.
You don't work for anyone.

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You're happy to, you're happy to
put your controversial opinions

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out there into the abuse as
well, which which is why I was

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excited to get your message.
But I technically work for a

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little guy downstairs and
nappies.

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And my wife, she's got pretty,
pretty high expectations.

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Yeah.
What were you thinking like?

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What were you thinking?
Like just just reading the news

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of the last few days mate?
Oh, I don't know, I'm like, so

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I'm so like glad to see some
stuff start to work and then I'm

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so confused when I see other
stuff fly like it's has this

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like for craziness.
Like I've obviously been a

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uranium bull for a while and I
was just looking at URA.

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Did you know nearly 1/4 of that
entire index.

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This is just the what is it?
What's that new startup is that?

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Oclo.
OCLO is 20% of the entire ETF.

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So that thing is a $21 billion
market cap US.

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It's marching.
It's like it's, it's marching

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towards Kamiko.
Like, yeah, that's, yeah,

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remarkable.
Yes, so you've got this like the

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then you can Oh God, you can.
I get hate every time I mention

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it, but you've got like USUEC
and like Energy Fuels and like,

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it's fine if someone's playing
that game, but like energy

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Fuels, like just what?
Just over a hundred 100,000 lbs.

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It's trading nearly 8 billion
market cap.

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We're in such a weird time where
there's this like, and then and

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then I get like, yeah, there's
the whole like everyone's lined

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up for the next MP materials
deal.

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And yeah, I'm just like happy
I'm making money.

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But I'm so confused and so like
kind of scatty with so, so much

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of the stuff I'm saying ripping.
I'm like God, like this could

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all.
There's a whole lot of bugs

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heading towards like a big, I
guess you call like inflationary

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windshield.
Like there's a whole lot of

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stuff that doesn't make sense.
The, the FOMO feeling around

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this market is really
interesting.

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I'm not sure about you guys, but
it it's not actually not

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terrible, terribly bad inside of
me because I, I do feel like

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I've missed out on some stuff,
but all the other crap that I'm

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holding is, is kind of doing
well as well.

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So it, you know, it sort of ways
off and you come out of that

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like, oh, you know, the, you
know, those things like perhaps

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in the tin world going really
well, a whole bunch of names

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there.
And you know, I don't, I don't

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hold any of them at the moment
and I'm not actually too gutted

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about it because all this other
stuff like all the gold names

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are just ripping tremendously.
Are you guys feeling the sort of

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same?
Yeah, I feel, I feel, I feel

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you, you know, you know, that
that bull market thing that

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happens, it's like the more, the
more prices go up, the more

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conviction you have when you
should have the other way around

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like you should be.
Yeah, yeah, I, I, I definitely

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am noticing that in myself at
the moment.

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So a tricky a tricky 1 to
contend with.

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Yeah, there's My Portfolio.
Like I kind of joke like exactly

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what you just said, JD.
Like I've I've had a whole lot

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of kind of like mistakes that
I've just like hidden away in

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the corner of the portfolio.
And now I've like actually had

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the sort of the RIP to go and
clean up a lot of the weeds that

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I'm like embarrassed, like
looking at some of these junior

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miners that I've thrown a few K
on.

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And now I can kind of make for
the exit with sort of break even

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after watching just a horrific
draw down the last two years.

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Whereas other stuff I'm like,
yeah, really, really comfortable

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just having super heavy
positions and like like actual

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physical commodities, like I'm
having like a like, I think

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since I last came on with you
boys, like I went really heavy,

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like platinum and rhodium.
Yeah.

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And that just keeps like taking
up more and more crowd and

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everything else out in the
portfolio and, and everyone like

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it's probably the most common
message I get.

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Is it time to trim?
Is it time to trim?

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Like people send me photos of
Subarnier or even just physical

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platinum and I'm always like
sell to buy.

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What?
Like, I agree if you're going

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to, if you're going to dump it
and you're going to go into

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some, I don't know, some heated
corner of like oil or coal.

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But if you're just freaking out
because it's starting to run

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like some of the gold, like I
think gold's still cheap, but

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everyone, yeah, everyone's like
freaking out at the chart going

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vertical.
Yeah, we don't know, like we

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don't know what to do when when
something goes up like, you

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know, 3-4, five, 100% because,
because, yeah, for like 15 years

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I've been convinced that that
those are those are not actual

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paradigm shifts or, or, you
know, like they're just, they're

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just commodity cycles, but.
But that stuff we just bitch

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about because that happens in
the tech world, but it doesn't

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actually happen in in the mining
space.

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So it's a bit sort of hard to,
to grapple with.

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I'm, I'm keen to jump into a
whole bunch of different names,

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but why don't we talk a bit
about China first?

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Because I think that sort of
creates the setting.

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And, and Trev, you did a bit of
a write up on what's happening

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with, with BHB and Ferg.
You've, you've written about a

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similar type dynamic with
regards to Russia and and China

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sort of settling trades in RnB.
So why don't we kick it off

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there?
Yeah, mate.

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Well, I think like the the, the
context for, for the case I

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wrote this week was sitting the
scene a few a few months back.

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Word is they put out this short
piece about so-called, you know,

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commercial dispute between BHP
and China Mineral Resources

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Group or CMIG, China's new state
backed iron ore buyer.

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At the time the issue was said
to be over Jimmy bar fines

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specific to to that one product.
A commercial dispute about the

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blend, the pricing
differentials, impurities,

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etcetera.
Like that kind of framing of a,

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of a of a tug of war, nothing
political, just just business

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right.
And then late September,

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Bloomberg reported that the
Chinese mills had been told to

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stop buying BHP cargoes all
together, or at least the ones

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under the influence of CMRG.
So the the commercial dispute

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was at that point starting to
look like a freeze out, I

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thought.
And, and yeah, like my

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interpretation of this was, was
sort of evolving.

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I, I found it like fascinating.
We spoke about on the podcast.

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I remember making a statement
like, it's going to be

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interesting to see who caves
here.

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My, my, my theory about who that
would be.

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But for two weeks, like, you
know, there was, there was

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nothing, nothing in the public
domain.

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No, like the story just kind of
vanished.

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Like Friday afternoon.
We'd just gone single Industry

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wire article, you know, pops up
in steel orbits says that BHP

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has agreed to a, to a new
arrangement, effectively

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settling 30% of its spot iron
ore sales to China in RMB

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instead of U.S. dollars.
And that was it.

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There was, you know, that
Industry Wire kind of briefly

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did the rounds on, on Twitter.
I remember it just getting a bit

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of a spotlight there.
So I thought not I see, I see it

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on Twitter over the weekend.
I'm thinking this is this is a

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big deal.
And we come into the office on

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Monday, JD, and like, one of the
things we do every weekday is we

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compile, you know, the big
stories into a daily note.

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And I'm I'm looking everywhere
and they're like the mainstream

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press for for an article about
this.

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Like, where's the coverage from
Reuters or Bloomberg or the

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Finn?
Nothing.

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All that's out there is still
this like this steel Orbis

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industry wire, like the, you
know, everyone's absent on it.

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And so we put the steel obvious
link in there in the director

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special.
Yeah.

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And and I think we're just like
then reflecting on like, why is

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there no coverage of this?
What the hell is going on?

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Putting a few kind of like,
yeah, like having a few

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conversations with a few
different people with different

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insights in in there.
I've become, I became like just

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over the next few hours after
that, just increasingly

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convinced that there was
something here like first

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verified.
But this is true.

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It's not just like a, a, a
rogue, you know, industry wire

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thing.
So verified it is true.

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And then verified that like no
one's got any appetite to write

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about it or it's getting
suppressed by verification

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channels.
And I just thought I've got to

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put my, my, my words and my
thinking out there into the

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abyss about what, what I think
this means.

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Because I think it's, I think
it's seismic.

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I think this is, this is, this
is a big, big, big deal.

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But I'll I'll pause there.
Yeah, I think he nailed it,

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Trev.
Like the my first observation

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was exactly yours.
I was like, this is a seismic

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shift because it's going to
start the dominoes.

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If they can get an agreement
like that with BHP, then that's

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going to be held up with all the
other large miners.

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And why isn't this all over
Bloomberg, Reuters like it was

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it was that happened what 5 days
ago?

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And there's Reuters has even
published pieces since then that

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sort of almost like just dismiss
it like they're saying no, the,

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the few shipments that have
changed hands have still been

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USD like that.
That wasn't whatever the third

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paragraph of it.
And yeah, as you say, when you

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just Google it like you can read
the first 2 pages and there's

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not one mention of it on any
large media outlet.

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And I just find that mind
boggling of how important this

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is.
This is a real game changer when

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you consider like I, I've been
really paying attention to this

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since someone I follow really
closely and I think everyone

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should is Louis Vincent Garb's
work.

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And he's he was the first one
that kind of pointed out to me

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that the US dollar has been
largely the bottleneck to let

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Asian growth.
When you consider that they have

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to run surpluses so that they
have the dollars to buy the

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energy and the commodities they
need.

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And when you kind of understand
that this is moving away from

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that and how much growth this
could unleash through Asia, if

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they can trade with their own
energy, with their own

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commodities and their own
currencies, which they can then

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print.
It's a complete like up in the

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entire system that we've come
accustomed to for the last 30-40

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years.
And for it to get no coverage by

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the mainstream media, it's it's
bananas to me.

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But I think there's, yeah,
there's a lot of information and

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the fact that it's not getting
touched.

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And yeah, I'm happy to dive down
any of those rabbit holes you

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want, but I think it's seriously
important, yeah.

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So I've got a really interesting
thing to to add to what you just

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said there, Ferg, in in doing a
bit of reading before we just

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jumped on this call.
Now I came across another, you

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00:11:31,280 --> 00:11:36,000
know, another newswire service.
It's not like a, a Bloomberg or

224
00:11:36,000 --> 00:11:39,080
a Financial Times or anything
like these pretty sort of under

225
00:11:39,080 --> 00:11:42,600
the radar type stuff.
And they wrote up that Indian

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00:11:42,600 --> 00:11:46,760
oil purchases from Russia are
now going to be settled in Yuan

227
00:11:46,800 --> 00:11:50,520
as well.
Now this was flirted with in in

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00:11:50,520 --> 00:11:56,920
2023 and late 22 on on the back
end of right after the the

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00:11:56,920 --> 00:12:00,520
Russia Ukraine conflict started,
but it didn't kind of go

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00:12:00,520 --> 00:12:03,120
anywhere.
And now it's kicked up again

231
00:12:03,120 --> 00:12:06,600
because it's, it's kind of the
easiest currency to to do that

232
00:12:06,600 --> 00:12:10,400
in to make that R&B into rubles
transaction.

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00:12:10,400 --> 00:12:15,160
And that is a, that is a huge
win for the, the Chinese, right?

234
00:12:15,160 --> 00:12:20,120
For for them to have India, a
country of a billion plus people

235
00:12:20,560 --> 00:12:24,800
buying yuan to to settle their
energy transactions is enormous.

236
00:12:24,800 --> 00:12:27,560
And again, I don't think it's a
coincidence coming in the same

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00:12:27,560 --> 00:12:29,800
kind of few weeks that we're
talking about this with, with

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00:12:29,800 --> 00:12:31,640
BHBI mean it.
It just can't be.

239
00:12:32,120 --> 00:12:36,120
Yeah, that's and that's like I
mean there's there's you know

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00:12:36,320 --> 00:12:41,600
Saudi Arabia selling oil in in
yuan on on the other side of the

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00:12:41,800 --> 00:12:46,000
the the Ledger on the borrowing
side, you know, can you got a

242
00:12:46,040 --> 00:12:50,160
massive discount on interest for
for denominating in in yuan very

243
00:12:50,160 --> 00:12:53,760
recently.
There's there's there's

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00:12:53,920 --> 00:12:57,960
Fortescue borrowing in in yuan
like we're seeing like in front

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00:12:57,960 --> 00:13:00,800
of us.
Yeah, the the rewriting of the

246
00:13:00,800 --> 00:13:04,280
financial architecture in favour
of if you are not like I, I

247
00:13:04,280 --> 00:13:06,920
titled my piece that, you know,
the iron dollar crack PHP is

248
00:13:06,920 --> 00:13:10,520
quite surrender to the yuan.
And that might seem hyperbolic.

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00:13:11,560 --> 00:13:15,280
And, and, and some people point
out that that, you know, this is

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00:13:15,280 --> 00:13:18,440
just 30% of spot sales.
It's not long term sales.

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00:13:18,600 --> 00:13:20,400
You know what, this is a
newsworthy blah, blah, blah.

252
00:13:20,400 --> 00:13:24,960
But if you think this is where
things start, I think you're

253
00:13:24,960 --> 00:13:26,160
delusional.
I think you're asleep at the

254
00:13:26,160 --> 00:13:28,200
wheel.
Like I think this is, this is a

255
00:13:28,200 --> 00:13:32,440
well trodden playbook.
And, and like, it's a crack, but

256
00:13:32,440 --> 00:13:35,320
my God, like a, you know, a
crack grows in it.

257
00:13:35,320 --> 00:13:38,120
It splits open the whole system.
Yeah.

258
00:13:38,120 --> 00:13:41,240
I, I, I, I can't like understate
how, how like fundamentally

259
00:13:41,640 --> 00:13:45,200
like, you know, important.
I think this, this, this, this

260
00:13:45,200 --> 00:13:49,200
is because it was, it was
actually, it's funny, it's PHP

261
00:13:49,200 --> 00:13:51,680
as well, because it was, it was
Meyer's cloppers 15 years ago

262
00:13:51,840 --> 00:13:56,640
that that helped anchor the, the
the trading of iron ore, two US

263
00:13:56,640 --> 00:14:00,200
dollars in the first place at
the like, yes, they were

264
00:14:00,200 --> 00:14:03,400
settling in U.S. dollars.
But, but, but what, what, what,

265
00:14:03,480 --> 00:14:06,640
you know, what, what, what he
did with, with, with pinning it

266
00:14:06,640 --> 00:14:10,720
to the, the dollar based spot
indexes like that was that that

267
00:14:10,720 --> 00:14:13,960
basically served to ensure it
was U.S. dollar settled for, for

268
00:14:13,960 --> 00:14:16,160
the, for the, for the following
like 15 years.

269
00:14:16,240 --> 00:14:19,480
And, and now it's now it's BHP
seating ground on that.

270
00:14:20,400 --> 00:14:23,880
And you know, copper's legacy
might be kind of unwritten in

271
00:14:23,880 --> 00:14:26,040
front of our eyes.
And where does like, where does

272
00:14:26,040 --> 00:14:27,600
the power lie here?
Right?

273
00:14:27,600 --> 00:14:30,440
Like it was like it's kind of
obvious.

274
00:14:31,120 --> 00:14:34,360
It's it's so obvious it's a
commercial position for BHP to

275
00:14:34,400 --> 00:14:38,240
to seed there because they need
they need China way more than

276
00:14:38,280 --> 00:14:39,760
the other way around.
And we're kidding ourselves

277
00:14:39,760 --> 00:14:41,960
everything differently.
That's a pretty big goal.

278
00:14:42,320 --> 00:14:48,440
I yeah, I mean, I, I don't think
the, the change of this, we undo

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00:14:48,440 --> 00:14:51,680
cloppers and the work you did
back in, back in the day, right?

280
00:14:51,680 --> 00:14:56,560
Because they have had decades of
unbelievable profit, just like

281
00:14:56,640 --> 00:14:59,360
mouth watering kind of profit
that you don't, you don't see

282
00:14:59,360 --> 00:15:01,640
hang around for, for too kind of
long.

283
00:15:01,760 --> 00:15:05,240
But I think you're, you're spot
on in the power shifting and and

284
00:15:05,240 --> 00:15:08,520
the shift that we're seeing
underway right now, like the,

285
00:15:08,600 --> 00:15:14,000
the power has firmly been with
Valet, Rio Tinto, BHP and to a

286
00:15:14,000 --> 00:15:17,680
slightly lesser extent FMG over
the past 2020 plus years.

287
00:15:18,240 --> 00:15:20,360
But bit by bit that that kind of
changes.

288
00:15:20,400 --> 00:15:22,040
And I disagree with that
framing.

289
00:15:22,160 --> 00:15:25,320
And so I don't think the the
power's ever been with them.

290
00:15:25,320 --> 00:15:27,920
I think the power has been with
the US dollar.

291
00:15:28,280 --> 00:15:31,320
And like, and I'll give you an
example of like, like

292
00:15:31,600 --> 00:15:34,560
SO2020112012.
There's a phenomenal kind of

293
00:15:34,560 --> 00:15:37,040
case case study that articulates
the power.

294
00:15:37,040 --> 00:15:39,440
China has always had to flex
their muscle here.

295
00:15:41,160 --> 00:15:46,600
Between 2008 and 2012, Bali
spent $4 billion on on building

296
00:15:46,600 --> 00:15:50,520
out these like extra large iron
ore, iron ore ships called Valet

297
00:15:50,520 --> 00:15:52,480
Max.
They built like 30 of these big

298
00:15:52,480 --> 00:15:54,960
ships and they thought they
could save like like 4-3 to

299
00:15:54,960 --> 00:15:57,960
$4.00 U.S. dollars per tonne
with these, you know, big, big

300
00:15:57,960 --> 00:16:00,200
carry ships.
And so they get built.

301
00:16:00,200 --> 00:16:04,760
And then what happens in early
2012 China, they institute this

302
00:16:04,760 --> 00:16:09,600
ban forbidding dry bulk vessels
over 300,000 tonnes.

303
00:16:09,880 --> 00:16:12,240
So just these ships are no
longer allowed at any of the

304
00:16:12,240 --> 00:16:16,320
ports, right And they the stated
reasons at the beginning of that

305
00:16:16,320 --> 00:16:19,320
ban were safety important
infrastructure concerns like.

306
00:16:19,320 --> 00:16:23,040
What year did that happen?
So 2012, yeah, 2012, but you

307
00:16:23,040 --> 00:16:25,400
know, sound from, you know, like
there's a it's a commercial

308
00:16:25,400 --> 00:16:27,840
misunderstanding to start with.
And eventually what happens?

309
00:16:27,840 --> 00:16:30,760
What did Valley have to do?
They sell the entire fleet not

310
00:16:30,760 --> 00:16:34,880
for 4 billion for 1.4 billion,
mostly to Costco, not Costco

311
00:16:35,160 --> 00:16:39,080
Costco, which is a China
shipping and and it was a sale

312
00:16:39,080 --> 00:16:41,320
and leaseback.
So China got the long term

313
00:16:41,320 --> 00:16:44,240
leases of Viola using these
ships to go to their ports.

314
00:16:45,040 --> 00:16:49,200
Like like, you know, the ban,
the ban disappears.

315
00:16:49,520 --> 00:16:52,280
And So what I bring that story
up because both episodes the

316
00:16:52,280 --> 00:16:55,720
exact same choreography.
Step one dispute, like, you

317
00:16:55,720 --> 00:16:59,120
know, dispute narrative gives
Beijing room to act without

318
00:16:59,120 --> 00:17:00,720
admitting political intent.
Step 2.

319
00:17:01,160 --> 00:17:05,040
The pressure escalates.
Step 3, the foreign miner

320
00:17:05,040 --> 00:17:08,200
resolves it seeding the
structural ground violate

321
00:17:08,359 --> 00:17:13,200
selling the ships to to Costco
BHP by settling cargoes in R&B.

322
00:17:14,240 --> 00:17:16,599
Don't for a second think BHP can
bully China.

323
00:17:16,599 --> 00:17:19,480
It's the other way around.
And always like the, the, the

324
00:17:19,480 --> 00:17:22,000
buyer has the power here.
I think it's always been that

325
00:17:22,000 --> 00:17:23,280
way.
It's just the unit of

326
00:17:23,480 --> 00:17:24,960
denomination.
The power, you know, the power

327
00:17:24,960 --> 00:17:28,160
between the the East and West
is, is changing in front of our

328
00:17:28,160 --> 00:17:32,640
eyes thanks to some own goals.
Yeah, I, I see, I see your

329
00:17:32,640 --> 00:17:35,120
point.
I, I, I don't agree at all.

330
00:17:35,120 --> 00:17:39,000
I think Rio and BHB have had far
more of the power and that's why

331
00:17:39,000 --> 00:17:43,880
we saw from 2003 to 2006 prices
increase from from 30 bucks a

332
00:17:43,880 --> 00:17:48,000
tonne to like 200 odd bucks a
ton, because there was so much

333
00:17:48,000 --> 00:17:51,680
more demand outweighed by that.
And the like the, the Chinese

334
00:17:51,680 --> 00:17:54,320
have been angry about this for,
for decades.

335
00:17:54,320 --> 00:17:57,960
And that is why they, they built
this group, China Minerals

336
00:17:57,960 --> 00:18:00,680
Resources Group, because they
wanted to bring together the

337
00:18:00,680 --> 00:18:04,000
power, the buying power of the,
the steel mill so that they

338
00:18:04,000 --> 00:18:07,920
could weigh in with their buying
heft and, and try and counteract

339
00:18:07,920 --> 00:18:10,200
that.
But yeah, we'll, we'll sort of

340
00:18:10,200 --> 00:18:11,040
see where that goes.
What?

341
00:18:11,040 --> 00:18:11,440
What?
Do you?

342
00:18:11,720 --> 00:18:13,520
It's interesting you, you
mentioned, you mentioned that

343
00:18:13,520 --> 00:18:19,600
aggregation of power as a way to
mitigate like, like to

344
00:18:19,600 --> 00:18:22,000
consolidate the power.
Yeah, here's like, here's a

345
00:18:22,000 --> 00:18:24,720
hypothetical.
Could, could, could we, could we

346
00:18:24,720 --> 00:18:28,360
have a CMIG of Australia
aggregate the buying aggregate

347
00:18:28,360 --> 00:18:31,040
the selling power of, you know,
the iron ore out of Australia.

348
00:18:31,040 --> 00:18:34,240
That's that's like, you know, if
you're, it'd be it'd be a

349
00:18:34,280 --> 00:18:38,040
political nightmare, but and a
very antagonistic thing to do.

350
00:18:38,040 --> 00:18:41,360
But you know, like and anti
competitive in so many ways.

351
00:18:41,360 --> 00:18:44,000
But that's like that's that's
the only way you actually get

352
00:18:44,000 --> 00:18:46,600
leverage here, because otherwise
otherwise what happens here is

353
00:18:46,600 --> 00:18:50,280
this 30% it gets becomes more
and more you build liquidity in

354
00:18:50,280 --> 00:18:52,920
the spot market.
All of a sudden, long term, like

355
00:18:52,920 --> 00:18:59,400
every every other company like
Thalas, Rio Tinto, Fortescue,

356
00:18:59,400 --> 00:19:02,200
everyone gets like pushed a
little bit and a little bit and

357
00:19:02,200 --> 00:19:05,520
a little bit and before you know
it like and being our new

358
00:19:05,520 --> 00:19:07,400
standard, but.
Bring them all into the fold.

359
00:19:07,400 --> 00:19:11,440
Let's create an OPEC of of
Australia plus Brazil and China

360
00:19:11,440 --> 00:19:12,640
will be coming to our door
again.

361
00:19:13,280 --> 00:19:14,280
Yeah.
What do you reckon, Ferg?

362
00:19:16,480 --> 00:19:19,200
I, I just think you got to think
a lot bigger than this because I

363
00:19:19,200 --> 00:19:28,720
think this is, this is all of
Asia wanting to essentially

364
00:19:28,720 --> 00:19:31,520
increase their, their growth.
And they, they know that US

365
00:19:31,520 --> 00:19:33,080
dollar's being weaponized
against them.

366
00:19:33,160 --> 00:19:36,040
And they're like, if I don't
know how closely you've been

367
00:19:36,040 --> 00:19:40,840
following India lately, if you
follow Modi on Twitter, he's

368
00:19:40,840 --> 00:19:44,680
been posting pics of him
catching up with, with Putin,

369
00:19:44,680 --> 00:19:47,120
like going for rides.
They're all having dinners like

370
00:19:47,120 --> 00:19:48,840
that.
There was a seven-year gap

371
00:19:48,840 --> 00:19:55,520
between Modi even going to China
meeting with and the fact that

372
00:19:55,520 --> 00:19:58,800
they're actually all buddies.
When you've got China, that's

373
00:19:58,800 --> 00:20:02,240
got all the commodities.
You've sorry, you've got Russia,

374
00:20:02,240 --> 00:20:04,280
it's got all the commodities and
it's willing to obviously do

375
00:20:04,280 --> 00:20:06,640
these deals left, right and
center and currencies net

376
00:20:06,640 --> 00:20:10,000
settled in gold.
You've got China, which has got

377
00:20:11,240 --> 00:20:15,360
all the manufacturing and crazy
cheap capital, which this point

378
00:20:15,360 --> 00:20:16,880
I'll come back to because
there's, there's really

379
00:20:16,880 --> 00:20:18,560
interesting sort of parallel
with that.

380
00:20:19,360 --> 00:20:25,240
And you've got India with see
monster population really under

381
00:20:25,240 --> 00:20:28,440
the utilized labour and they're
all starting to work together.

382
00:20:29,600 --> 00:20:32,320
I think like the last Bloomberg
article I read when I was trying

383
00:20:32,320 --> 00:20:36,560
to find a Bloomberg article on
this BHP sort of yon settlement

384
00:20:36,840 --> 00:20:41,640
was it was almost a argument
saying that China's overplaying

385
00:20:41,640 --> 00:20:45,000
its hand because they can pivot
to Indian growth.

386
00:20:45,200 --> 00:20:48,520
And I was like, this is like a a
unified front.

387
00:20:48,520 --> 00:20:51,480
You're kind of completely
missing what's happening here.

388
00:20:51,720 --> 00:20:55,720
It's similar to you.
You read the articles of the US

389
00:20:55,720 --> 00:20:59,160
trying to pressure Saudis like
the there was a point, I think

390
00:20:59,160 --> 00:21:01,720
it was 2000, early 2002 thousand
and three.

391
00:21:01,720 --> 00:21:09,200
I think that US was 2020 odd
percent of Saudi oil exports.

392
00:21:09,360 --> 00:21:17,200
And now it's 3/3 and 1/2 and
China is 2021% of so it's the

393
00:21:18,160 --> 00:21:22,760
they they get to name the terms
when they're the a majority

394
00:21:22,760 --> 00:21:24,440
buyer.
And that's that's what's

395
00:21:24,440 --> 00:21:27,920
happened here, there.
And, and a lot of this has been

396
00:21:29,440 --> 00:21:32,000
spent on goals.
A lot of this is really

397
00:21:32,000 --> 00:21:37,240
accelerated since the seizure of
the Russian assets.

398
00:21:37,520 --> 00:21:42,120
And that's just, it's only going
to accelerate from here.

399
00:21:42,120 --> 00:21:45,120
Like I've read a few articles
just before coming on, I was

400
00:21:45,120 --> 00:21:47,200
like trying to see all the
different viewpoints.

401
00:21:47,200 --> 00:21:50,240
And a lot of it was like, but
the payment rails won't be able

402
00:21:50,240 --> 00:21:51,800
to handle it.
There isn't enough swaps.

403
00:21:51,800 --> 00:21:55,480
Or like if anything you learn
with the Chinese, like they can

404
00:21:55,480 --> 00:21:59,600
innovate like you did they take
EVs with like mass like joking

405
00:21:59,600 --> 00:22:03,080
about the EV, the Chinese EV
industry a few years ago.

406
00:22:03,240 --> 00:22:06,520
He's not laughing now with what
BYD has achieved.

407
00:22:06,920 --> 00:22:10,200
And I think you're going to see
a similar setup with Huawei

408
00:22:10,440 --> 00:22:12,360
verse NVIDIA and long enough
runway.

409
00:22:12,360 --> 00:22:18,480
Like don't don't underestimate
when they they put their sort of

410
00:22:19,840 --> 00:22:24,680
all their focus behind something
just how how quickly they can

411
00:22:24,680 --> 00:22:30,600
innovate and gain market share.
And where I was going with the

412
00:22:30,600 --> 00:22:34,360
sort of the cheap money parallel
was again, this is Louis Vincent

413
00:22:34,360 --> 00:22:41,680
Garv pointing out this is like a
parallel of the post GFC in the

414
00:22:41,720 --> 00:22:44,600
US.
It was this great David Tipper

415
00:22:44,600 --> 00:22:47,840
interview when he went out.
I don't think he went on.

416
00:22:47,840 --> 00:22:54,240
I don't know what it was seeing
CNN or some channel and they

417
00:22:54,240 --> 00:22:55,960
were asking what did he think of
the stock market?

418
00:22:55,960 --> 00:22:58,960
He said, oh, you just, you got
to buy because now the Fed's got

419
00:22:58,960 --> 00:23:02,000
your back.
You've obviously just had a real

420
00:23:02,000 --> 00:23:04,160
estate bust.
There's going to be cheap money

421
00:23:04,160 --> 00:23:06,240
pumped into the system if the
market goes down, the federal

422
00:23:06,240 --> 00:23:10,000
pump more in and inflation is
low.

423
00:23:11,320 --> 00:23:14,080
And that's just going to be an
epic bull market from here.

424
00:23:14,480 --> 00:23:19,680
And Louis, Louis Garve was
drawing the same analogy with of

425
00:23:19,680 --> 00:23:22,720
China in particular, that's how
cheap Chinese equities, in

426
00:23:22,880 --> 00:23:26,560
particular Chinese tickers that
you've now got the PBOC behind

427
00:23:26,560 --> 00:23:31,580
it.
You've got very like non

428
00:23:31,580 --> 00:23:34,680
existent inflation.
You've got lots of cheap money,

429
00:23:34,680 --> 00:23:38,600
which I see here in Indonesia.
There's you can buy BYD here for

430
00:23:38,600 --> 00:23:43,160
years interest free and you've
got the entire sort of Asian

431
00:23:43,160 --> 00:23:46,440
market to grow, which is all
climbing up the rest curve and

432
00:23:46,800 --> 00:23:51,760
and yeah, the PBOC just standing
by to inject more stimulus into

433
00:23:51,760 --> 00:23:53,440
the system.
They're coming off the back of a

434
00:23:53,440 --> 00:23:56,240
real estate bust.
Like the parallels are really

435
00:23:56,240 --> 00:23:59,080
interesting when you view it
like that and just how bearish

436
00:23:59,080 --> 00:24:03,960
everyone is on the market.
Like even if you look at FX I

437
00:24:03,960 --> 00:24:07,120
the Chinese large cap, 50% of
that float is short.

438
00:24:07,640 --> 00:24:10,760
You're K web where I think
nearly 1/4 of that shortest

439
00:24:10,760 --> 00:24:17,480
float, that float is short.
And I just, yeah, I think this

440
00:24:17,480 --> 00:24:20,600
is the start of like a mega
trend and no one wants to see it

441
00:24:20,600 --> 00:24:25,600
because everyone's too busy
chasing, chasing what's going on

442
00:24:25,600 --> 00:24:28,680
in the US with lots of financial
engineering and a lot of stuff

443
00:24:28,680 --> 00:24:30,280
that doesn't make sense,
honestly to me.

444
00:24:31,240 --> 00:24:32,880
I really like your thinking
there.

445
00:24:32,880 --> 00:24:37,120
The, the question that comes to
mind is we, we had a pretty

446
00:24:37,120 --> 00:24:40,880
prominent fund manager here in
Perth by a lot of Russian

447
00:24:40,880 --> 00:24:44,280
equities cheap, you know, telco
energy, all these sorts of

448
00:24:44,280 --> 00:24:45,920
things.
So I'm really curious how you

449
00:24:45,920 --> 00:24:49,200
think about the the tail risk
with with placing your money in

450
00:24:49,200 --> 00:24:51,240
in China?
Yeah.

451
00:24:51,240 --> 00:24:54,840
So that's like don't own AD Rs
to start with.

452
00:24:55,080 --> 00:25:01,720
Like the the the fact that you
could wake up to U.S. citizens

453
00:25:01,720 --> 00:25:03,480
not being able to own Chinese
equities.

454
00:25:03,480 --> 00:25:05,440
I think I really doubt it would
happen.

455
00:25:05,440 --> 00:25:08,200
But that is obviously a tail
risk you just don't want to

456
00:25:08,680 --> 00:25:10,000
position for.
So if you're going to buy

457
00:25:10,000 --> 00:25:14,080
something, buy something ideally
on like Hong Kong exchanges or

458
00:25:15,800 --> 00:25:18,480
yeah, there's, there's plenty of
vehicles that you can buy it

459
00:25:19,440 --> 00:25:22,480
that you don't have to go
through sort of ADR and have

460
00:25:22,480 --> 00:25:28,280
that risk.
But overall, like the I don't

461
00:25:28,280 --> 00:25:30,880
think the US can function
without China.

462
00:25:30,880 --> 00:25:34,000
Like I don't know if you've ever
seen this, this amazing chart

463
00:25:34,240 --> 00:25:36,440
that the, the US sort of in
dash.

464
00:25:36,600 --> 00:25:41,760
I think it's the yeah, I think
it's the the Air Force and just

465
00:25:41,760 --> 00:25:47,200
how ingrained Chinese companies
are with the vast majority of

466
00:25:47,200 --> 00:25:51,080
them have at least like two or
three Chinese suppliers in their

467
00:25:51,080 --> 00:25:53,680
supply chain.
And they got asked could they

468
00:25:53,680 --> 00:25:57,880
disentangle from the Chinese?
And he's just like, we can de

469
00:25:57,880 --> 00:26:03,360
risk, but we can't, we can't.
Like it's too entangled.

470
00:26:03,520 --> 00:26:05,760
We can't remove ourselves from
the Chinese companies.

471
00:26:05,760 --> 00:26:12,560
So the idea that like Russia,
they could sanction I China at

472
00:26:12,560 --> 00:26:16,280
all, there'll just be far too
much damage done to the US

473
00:26:16,280 --> 00:26:18,240
economy if they fully sanction
them.

474
00:26:18,640 --> 00:26:21,280
And I actually just posted a
piece out in Ferg's finds

475
00:26:21,280 --> 00:26:25,760
yesterday.
That was a lot of the way the US

476
00:26:25,760 --> 00:26:30,640
actually calculates its, its
manufacturing base doesn't take

477
00:26:30,640 --> 00:26:39,000
into account what percentage is
manufactured from foreign parts,

478
00:26:39,040 --> 00:26:40,920
which is just ludicrous when you
think about it.

479
00:26:41,240 --> 00:26:45,280
So it's just like sales receipts
on the end, like for cars half

480
00:26:45,600 --> 00:26:48,360
imported parts, it still just
takes it as American made on the

481
00:26:48,480 --> 00:26:52,320
final sale of the vehicle.
And there's lots more examples

482
00:26:52,320 --> 00:26:56,640
like that that US has hauled
itself out so badly.

483
00:26:56,800 --> 00:27:01,120
And yeah, I think if they did
really try and sanction China,

484
00:27:01,280 --> 00:27:04,080
like the fallout in the US would
be absolutely massive.

485
00:27:04,080 --> 00:27:05,800
So I honestly don't think they
can.

486
00:27:07,720 --> 00:27:12,240
Yeah, it's AI mean it despite
all of that, we've we've heard a

487
00:27:12,240 --> 00:27:14,640
lot about it the the last kind
of six months and and again it

488
00:27:14,640 --> 00:27:17,120
just kicked up over over the
weekend, right.

489
00:27:17,640 --> 00:27:21,200
And it's, it's so remarkable
because I think a lot about the

490
00:27:21,720 --> 00:27:24,000
the amount of money we hear
governments talking about with

491
00:27:24,000 --> 00:27:26,240
regards to to critical minerals
and all these sorts of things.

492
00:27:26,240 --> 00:27:29,080
And we speak about it a bunch,
you know, a billion dollar

493
00:27:29,080 --> 00:27:31,040
stockpile here, $2 billion
there.

494
00:27:31,840 --> 00:27:34,680
But that little trade spat wiped
off nearly 4 1/2 trillion

495
00:27:34,680 --> 00:27:39,320
dollars in, in one day off of
the S&P, which is kind of

496
00:27:39,320 --> 00:27:42,480
remarkable to think about.
It puts it puts the the industry

497
00:27:42,480 --> 00:27:45,920
in which we play predominantly
into a lot of context, I kind of

498
00:27:45,920 --> 00:27:53,480
think.
Totally, Yeah, the, the and the

499
00:27:53,480 --> 00:27:55,080
market's weird as a result of
it, right.

500
00:27:55,160 --> 00:27:58,360
Like I, it's funny you mentioned
David Tepper is like banging the

501
00:27:58,360 --> 00:28:00,960
table, like, you know, by the
market, because he was also

502
00:28:00,960 --> 00:28:04,520
doing the exact same thing like
8 months ago by Chinese tech, by

503
00:28:04,520 --> 00:28:08,680
China.
Yeah, he was.

504
00:28:08,720 --> 00:28:12,160
Yeah, yeah, it makes good sense
at certain times.

505
00:28:12,480 --> 00:28:16,360
But then everyone in our
everyone in our neck of the

506
00:28:16,360 --> 00:28:20,360
woods in our world is just
instead of being drawn to the to

507
00:28:20,360 --> 00:28:23,520
the, to the maybe the beaten up
bargain that, that you're

508
00:28:23,520 --> 00:28:27,320
inherently drawn to Ferg.
They they love the unobtainium,

509
00:28:28,120 --> 00:28:33,040
the Trump box, the yeah, the
rare earth, you know, the the

510
00:28:33,080 --> 00:28:37,040
anointed administration deals
that just yeah, mint shareholder

511
00:28:37,040 --> 00:28:42,440
value into existence.
Yeah, it's difficult with that

512
00:28:42,440 --> 00:28:47,120
because there's I think we're
talking before how you can have

513
00:28:47,120 --> 00:28:49,720
a faces that you think sound and
then there's just a whole lot of

514
00:28:49,720 --> 00:28:53,960
turds in with the raisins.
Like if you look at URA with

515
00:28:55,000 --> 00:29:01,600
going over only 20% of that's
just one SMR startup now, which

516
00:29:01,600 --> 00:29:06,600
is just, it's got no revenue.
No, it's just running on hype

517
00:29:06,680 --> 00:29:09,400
and you've got like, yeah,
before you even add in a few of

518
00:29:09,400 --> 00:29:12,280
the other SMRS.
I think I think over 1/3 of it's

519
00:29:12,280 --> 00:29:17,840
like just between SMRS and maybe
a bit of was it's the interest

520
00:29:17,840 --> 00:29:19,840
as well.
It's just, yeah, you're not

521
00:29:19,840 --> 00:29:22,680
getting the fundamental.
And then you can, you can even

522
00:29:22,680 --> 00:29:27,120
go further and dig into the
likes of like the UEC was nearly

523
00:29:27,120 --> 00:29:31,640
8 billion market cap Now on what
did it produce like 100,000 lbs?

524
00:29:33,040 --> 00:29:35,040
Try and explain that cash flow
to me.

525
00:29:35,040 --> 00:29:37,800
And I don't know, they'll hold
up the nameplate of 12 million,

526
00:29:37,800 --> 00:29:41,520
but I'd be, I'd be amazed if
they have even hit 20% of that.

527
00:29:42,280 --> 00:29:45,760
So, yeah, it's, it's a weird
market, honestly.

528
00:29:45,760 --> 00:29:49,680
It's, I'm finding myself
increasingly trying to hide out

529
00:29:49,680 --> 00:29:56,360
and physical and yeah, really,
really trying to stay away from

530
00:29:56,360 --> 00:29:59,360
the hype.
But it's difficult, yeah.

531
00:29:59,560 --> 00:30:02,160
And it's obviously nice to see
stuff working as well.

532
00:30:02,160 --> 00:30:06,840
But yeah, I don't like don't
feel comfortable when I see so

533
00:30:06,840 --> 00:30:10,560
much just crazy stuff flying at
the same time.

534
00:30:11,320 --> 00:30:13,520
What are the physicals you most
draw into at the moment, Ferg?

535
00:30:15,480 --> 00:30:18,520
So I got a big chunk of My
Portfolio and PGMS.

536
00:30:18,520 --> 00:30:26,280
So I have what was that cost?
It was like over 10% of My

537
00:30:26,280 --> 00:30:32,920
Portfolio is just rhodium and
platinum, have another 5% was

538
00:30:33,080 --> 00:30:40,840
physical uranium.
And what else have I got?

539
00:30:41,600 --> 00:30:44,520
I've been kind of got kind of
like a dollar cost average where

540
00:30:44,520 --> 00:30:47,280
I put it in a vault with
physical gold and a bit of

541
00:30:47,280 --> 00:30:51,360
platinum.
So yeah, I kind of always liked

542
00:30:51,360 --> 00:30:56,320
the sort of non recourse side of
it as well, having been on the

543
00:30:56,320 --> 00:30:59,920
other side of right at the start
of my career, had my brokerage

544
00:30:59,920 --> 00:31:02,400
go bust.
So that was a kind of a career

545
00:31:02,400 --> 00:31:03,880
defining.
I don't want to ever have to

546
00:31:03,880 --> 00:31:09,520
start from zero again.
Was that Opus Prime just by the

547
00:31:09,520 --> 00:31:14,480
way?
That was BBY, yeah, Yeah.

548
00:31:15,200 --> 00:31:18,200
Good to learn that lesson early.
Yeah, he was getting an

549
00:31:18,200 --> 00:31:21,880
instruction from A and she was
like astrologer or something.

550
00:31:21,880 --> 00:31:25,360
Came out later.
Just maybe, maybe Grimace.

551
00:31:25,760 --> 00:31:30,680
The worst thing was I actually
got, I actually got the payout.

552
00:31:30,920 --> 00:31:34,440
I got like maybe 2/3 of it back.
But it was like a year or two

553
00:31:34,440 --> 00:31:36,320
ago and I was like, thanks.
I'm like, I don't really need

554
00:31:36,320 --> 00:31:39,920
the money now.
Like I would have been when I

555
00:31:39,920 --> 00:31:45,200
was like on the bones of my ass.
And yeah, over whatever it was

556
00:31:45,200 --> 00:31:47,720
over a decade ago, yeah, I
really needed it at the end.

557
00:31:47,720 --> 00:31:50,440
I don't give it to me now.
It's not very helpful.

558
00:31:50,640 --> 00:31:53,240
Yeah.
Wow, nasty.

559
00:31:53,560 --> 00:31:55,080
That is, that's pretty
remarkable.

560
00:31:55,560 --> 00:31:59,240
Came to unpack, yeah, a few of
those medals and just sort of,

561
00:31:59,360 --> 00:32:01,680
yeah, maybe go around the table
and share what we're kind of

562
00:32:01,680 --> 00:32:05,120
thinking.
PGMS is the one I'm most keen to

563
00:32:05,120 --> 00:32:07,840
start with because yeah, like we
sort of said, it's really

564
00:32:07,840 --> 00:32:10,680
started to work.
So both Platts and Palladium

565
00:32:10,680 --> 00:32:14,440
about 1000 US bucks an ounce
maybe 6 odd months ago.

566
00:32:14,440 --> 00:32:18,760
Now they're 17 and 1600
respectively.

567
00:32:19,120 --> 00:32:22,600
Rhodium as well kind of group
group it in I think from 4 1/2

568
00:32:22,600 --> 00:32:27,760
thousand ish level now to to 7
odd 1000 bucks and they're yeah,

569
00:32:27,760 --> 00:32:31,000
rhodium sort of held at that
level for for quite some time.

570
00:32:31,000 --> 00:32:35,160
But has your, has your thinking
changed given this, this sort of

571
00:32:35,160 --> 00:32:38,160
run up with with how you're
positioning at all in across the

572
00:32:38,440 --> 00:32:42,280
the sort of space there?
No, not really.

573
00:32:42,320 --> 00:32:45,200
I'm honest.
Like it's, it's nice to see the

574
00:32:45,200 --> 00:32:48,600
faces validated, but I think
it's kind of a long way to run

575
00:32:48,640 --> 00:32:52,440
because you've still got, I
think if you bunch all the PGMS

576
00:32:52,440 --> 00:32:55,360
and in South Africa, they're
only just starting to kind of

577
00:32:55,360 --> 00:33:00,600
approach sort of like kind of
incentive price where they could

578
00:33:00,600 --> 00:33:02,640
consider bringing on additional
supply.

579
00:33:02,640 --> 00:33:06,200
And then as we all know, there's
a big lag with with that like it

580
00:33:06,200 --> 00:33:08,160
doesn't it's not going to turn
on tomorrow.

581
00:33:08,520 --> 00:33:13,160
And you've also seen one that
not many people's mention is non

582
00:33:13,160 --> 00:33:17,520
nickel, which is a big chunk of
the PGMS out of Russia that's

583
00:33:17,520 --> 00:33:21,520
keep pushing back a big
expansion and that's looking

584
00:33:21,520 --> 00:33:23,960
probably not going to come on
until late 2028.

585
00:33:23,960 --> 00:33:27,360
Now that was supposed to add 7%
to the overall space and that

586
00:33:27,360 --> 00:33:32,000
was supposed to help offset the
decline in South African supply.

587
00:33:32,480 --> 00:33:36,720
So yeah, it's one of those
sectors that yeah, it's shot the

588
00:33:36,720 --> 00:33:43,280
lights out, but I honestly,
maybe you can have a decent pull

589
00:33:43,280 --> 00:33:44,840
back.
Like nothing goes straight up in

590
00:33:44,840 --> 00:33:50,160
the line like platinum has
forever what, a 1020% even 30%

591
00:33:50,160 --> 00:33:53,880
pull back.
Be healthy, sure, but I'm not

592
00:33:53,880 --> 00:33:56,960
worried because I'm playing this
for the next 5 years.

593
00:33:56,960 --> 00:34:00,840
Like I, I want stuff that I can
sleep if I wake up in the

594
00:34:00,840 --> 00:34:04,600
markets like Trump's gone full
retard and we get like a

595
00:34:05,120 --> 00:34:09,120
liberation day on steroids.
Like if I've got a portfolio

596
00:34:09,120 --> 00:34:13,280
full of sort of physical
platinum, rhodium, uranium off

597
00:34:13,280 --> 00:34:16,600
sleep just fine and I'll know
that the reaction function, if

598
00:34:16,600 --> 00:34:19,600
anything, will be to print more
money because you can't have a

599
00:34:20,000 --> 00:34:26,280
just the where US finds itself
like it's, it's all so

600
00:34:26,280 --> 00:34:29,840
financialized that if the market
rolls over, they need to the tax

601
00:34:29,840 --> 00:34:33,840
receipts will roll over and the
whole thing becomes harder to

602
00:34:33,840 --> 00:34:35,280
finance.
So they'll have to pump money in

603
00:34:35,280 --> 00:34:38,480
to try and get it up.
I think inflation will run

604
00:34:38,480 --> 00:34:41,159
hotter.
And that all just leads back to

605
00:34:42,280 --> 00:34:47,199
to a lot of the sort of, if
you're based in like and hard

606
00:34:47,199 --> 00:34:51,239
assets, particularly ones where
you see a really big sort of

607
00:34:51,239 --> 00:34:53,760
supply demand gap, then you'll
you'll do really well.

608
00:34:54,560 --> 00:34:59,760
And other areas where I think
it's you might not be able to

609
00:34:59,920 --> 00:35:03,960
partake in the the physical, but
you're paying so little to play

610
00:35:03,960 --> 00:35:06,400
the game with the miners with
like the likes of 10.

611
00:35:06,400 --> 00:35:08,040
That's probably my favorite
right here.

612
00:35:08,240 --> 00:35:13,000
And also coal like you're just
not paying much and history is

613
00:35:13,000 --> 00:35:15,640
anything to go by.
They're often some of the better

614
00:35:15,640 --> 00:35:18,240
outperformers when inflation
does show up because you kind of

615
00:35:18,800 --> 00:35:21,320
if you have all the like the the
shit coins and the non

616
00:35:21,320 --> 00:35:25,520
profitable ticker one end of the
long duration curve, like your

617
00:35:25,520 --> 00:35:28,880
shortest shortest duration you
can get as like a a commodity

618
00:35:28,880 --> 00:35:31,320
trading in a few times cash
flow, selling into spot.

619
00:35:31,320 --> 00:35:32,880
That's the shortest duration you
can get.

620
00:35:32,880 --> 00:35:35,640
So you they generally really
shoot the lights out on their

621
00:35:35,640 --> 00:35:39,280
outcome.
So yeah, between physical really

622
00:35:39,280 --> 00:35:42,200
well priced commodity producers
and then if I'm going to look

623
00:35:42,200 --> 00:35:46,560
for torque, I'm like sort of
with uranium, I don't really

624
00:35:46,560 --> 00:35:50,560
like any of the producers.
So I just want to sit on guys

625
00:35:50,560 --> 00:35:52,880
are sitting on big pounds that
haven't sort of signed any

626
00:35:52,880 --> 00:35:56,280
contracts because I see, yeah,
future price has been an awful

627
00:35:56,280 --> 00:36:00,320
lot higher.
I think we're all in alignment

628
00:36:00,320 --> 00:36:02,400
that real assets do pretty well
in this environment.

629
00:36:03,480 --> 00:36:06,920
It's it's always hard to to look
at a look at look at 60% up year

630
00:36:06,920 --> 00:36:10,040
to date or 80% up year to date
in certain commodity prices and

631
00:36:10,040 --> 00:36:12,120
think I think this trend
continues.

632
00:36:12,120 --> 00:36:17,240
But but the P the PGM the way to
play it like like I love your

633
00:36:17,240 --> 00:36:18,800
way of thinking about risk
haven't probably been on the

634
00:36:18,800 --> 00:36:21,400
receiving end of mine is that
have have torched torched money

635
00:36:21,400 --> 00:36:25,960
along the way.
I I yeah, when like thinking

636
00:36:25,960 --> 00:36:28,640
about expressing the same the
same view on on that commodity

637
00:36:28,640 --> 00:36:33,840
ourselves like I remember the
analogue I remember clearly is

638
00:36:33,840 --> 00:36:36,720
is remember when bauxite shut
the lights out the tail end of

639
00:36:36,720 --> 00:36:41,040
last year and the two kind of
like ways to play bauxite on on

640
00:36:41,040 --> 00:36:42,960
ASX.
There was Metro mining and then

641
00:36:42,960 --> 00:36:46,040
there was Canyon Canyon the
undeveloped, you know, yeah,

642
00:36:46,160 --> 00:36:50,320
like sexy development project
could be, could be phenomenal,

643
00:36:50,360 --> 00:36:51,760
needs, needs funding, blah,
blah, blah.

644
00:36:51,800 --> 00:36:57,560
And then Metro like producing
already turn around story Canyon

645
00:36:57,560 --> 00:37:00,720
absolutely monstered the
monstered like Metro.

646
00:37:00,880 --> 00:37:02,240
Our performance was was
enormous.

647
00:37:02,240 --> 00:37:05,920
So I think like I think and I
think about that often when

648
00:37:05,920 --> 00:37:09,600
you've got these these sharp
yeah, like commodity move

649
00:37:09,600 --> 00:37:12,120
dynamics, is it better to be in
the minor or is it better to be

650
00:37:12,120 --> 00:37:15,160
in the development story that is
like, you know, blue, like blue

651
00:37:15,160 --> 00:37:17,440
sky, yada yada.
And I often think it's the

652
00:37:17,440 --> 00:37:21,040
development story.
And the good thing about the

653
00:37:21,040 --> 00:37:25,720
development story as well is
you're less like, you're less

654
00:37:25,720 --> 00:37:30,040
prone to an operational screw up
because because it's not

655
00:37:30,360 --> 00:37:31,680
nothing's operational at the
moment you.

656
00:37:31,720 --> 00:37:33,680
Can't let the mining get in the
way and actually ruin the

657
00:37:33,680 --> 00:37:35,200
narrative.
I actually think, I actually

658
00:37:35,200 --> 00:37:38,520
think there's risk mitigation
and more upside in owning the

659
00:37:38,520 --> 00:37:41,320
development story.
And yeah.

660
00:37:41,360 --> 00:37:43,000
How do you think about that with
PGMS?

661
00:37:43,000 --> 00:37:46,520
So we we bought some, we bought
some Southern Palladium like

662
00:37:46,520 --> 00:37:49,400
development story that that
thing's just gone bonkers.

663
00:37:49,400 --> 00:37:52,920
Unfortunately, we didn't capture
the whole move, but we also just

664
00:37:53,120 --> 00:37:56,080
I think we, I think like like we
were talking about this, we just

665
00:37:56,080 --> 00:38:00,480
buy a portfolio of producers and
like you know, I think we

666
00:38:00,480 --> 00:38:04,200
bought, we bought Zimplats as
well, bought Zimplats.

667
00:38:04,200 --> 00:38:07,320
I think that's just a ripping
business, great track record

668
00:38:07,440 --> 00:38:10,760
feel feel comfortable owning
that and comfortable that you

669
00:38:10,760 --> 00:38:12,440
know returns to shareholders
will endure.

670
00:38:12,600 --> 00:38:16,000
But if you go back in time, by
the way, and capture all of the

671
00:38:16,000 --> 00:38:19,520
ASX mining, no, actually all of
the listed mining companies from

672
00:38:19,520 --> 00:38:26,640
I think it's 2002 to today,
Fortescue returns #1 simplatz #2

673
00:38:27,000 --> 00:38:28,080
total shareholder return,
really.

674
00:38:28,360 --> 00:38:29,800
Yeah, wow.
Really.

675
00:38:29,960 --> 00:38:32,800
Yep, I mean like, I mean there's
not many like miners that are

676
00:38:32,800 --> 00:38:36,640
still on the same list of 2002.
Business Today, a lot of turn

677
00:38:36,680 --> 00:38:38,680
over there.
But it's, it's a, it's a, it's

678
00:38:38,680 --> 00:38:42,360
a, you know, like, I think it's
evidence of I've got shareholder

679
00:38:42,360 --> 00:38:44,920
value alignment, like, you know,
returns to shareholders

680
00:38:44,920 --> 00:38:47,160
evidence.
So I feel pretty comfortable

681
00:38:47,160 --> 00:38:50,440
there.
And then I like we didn't, we

682
00:38:50,440 --> 00:38:53,240
didn't buy it, but I think I
think Teresa is actually pretty

683
00:38:53,240 --> 00:38:54,880
interesting too.
We're like enough to visit that

684
00:38:54,880 --> 00:38:59,320
operation in South Africa.
I'm kind of interested in that,

685
00:38:59,440 --> 00:39:03,560
that like the, I remember
pitching it to you, Ferg, after

686
00:39:03,560 --> 00:39:04,920
we even visited it.
I've never owned it.

687
00:39:04,920 --> 00:39:09,240
I don't want to pitch it to you,
but I was like, but, but, but

688
00:39:09,240 --> 00:39:12,640
again, like 40, I think it's
like 40% owned by, you know,

689
00:39:12,720 --> 00:39:15,200
family.
Like great track record of

690
00:39:15,200 --> 00:39:19,080
actually, you know, reinvesting
for, for growth, generating more

691
00:39:19,080 --> 00:39:21,360
profits from that reinvestment.
You've just got good alignment

692
00:39:21,360 --> 00:39:24,680
with with, with, with what's
going on there going underground

693
00:39:24,680 --> 00:39:26,000
now.
So costs are going to go higher,

694
00:39:26,000 --> 00:39:29,880
but, but you know, going to face
that sooner rather than later.

695
00:39:29,880 --> 00:39:32,240
And yeah, it's like 1 operation
now.

696
00:39:32,240 --> 00:39:34,440
The big upside there, there's
two, there's two catalysts I

697
00:39:34,440 --> 00:39:38,600
think like can can make things
really interesting for Theresa.

698
00:39:39,200 --> 00:39:45,400
One is migrating off the LSE and
two is our Caro growth project.

699
00:39:45,640 --> 00:39:49,200
But even exclude, exclude Caro,
exclude LSE and they're trading

700
00:39:49,440 --> 00:39:51,880
substantially less than the NAV
today.

701
00:39:52,800 --> 00:39:55,880
And what we we know from these
like plant reef mining is like

702
00:39:55,880 --> 00:39:58,040
they, you know, NAV never
captures the right thing.

703
00:39:58,040 --> 00:39:59,280
That's why it's implants has
been the story.

704
00:39:59,280 --> 00:40:02,760
It is because you go deeper,
expand, you know, like, yeah,

705
00:40:03,040 --> 00:40:04,720
yeah.
Yeah, it was, it was super cool

706
00:40:04,720 --> 00:40:07,680
to see the, like you said, the,
the, the investment they've done

707
00:40:07,680 --> 00:40:11,320
in the project, you could see
like plant one, plant 2, plant

708
00:40:11,320 --> 00:40:14,080
3, as they just get enough cash,
they expand it by building

709
00:40:14,080 --> 00:40:16,360
another plant and then they can
sort of have more output.

710
00:40:16,360 --> 00:40:17,640
That was, it was pretty cool to
see.

711
00:40:18,320 --> 00:40:23,320
We also sort of went by a a bit
of Sibanye's operation and Ferg,

712
00:40:23,320 --> 00:40:26,320
I know you've done a write up on
on Sibanye in the past and and

713
00:40:26,320 --> 00:40:28,800
toyed with the idea.
Have you actually held that one

714
00:40:28,800 --> 00:40:29,760
or you're holding it at the
moment?

715
00:40:30,080 --> 00:40:31,640
Yeah, yeah.
No, I've I've got it, Yeah.

716
00:40:32,320 --> 00:40:33,720
How do you kind of think about
that now?

717
00:40:33,720 --> 00:40:38,280
Oh.
So yeah, I'm happy to share with

718
00:40:38,280 --> 00:40:41,840
like how I set it up because I,
so I essentially bought 5%

719
00:40:41,840 --> 00:40:48,640
physical rhodium, 5% physical
platinum, 3% and plates and 2%

720
00:40:48,640 --> 00:40:51,360
Sabania.
And my thinking there was

721
00:40:52,280 --> 00:40:54,480
Sabania and, and plates were the
talked plays.

722
00:40:54,680 --> 00:40:57,680
But you're investing in South
African miners.

723
00:40:57,680 --> 00:41:01,760
So you're playing, playing with
fire.

724
00:41:01,880 --> 00:41:04,800
Like you can wake up and they do
something dumb like any day of

725
00:41:04,800 --> 00:41:08,400
the week.
So the ratio was kind of

726
00:41:08,400 --> 00:41:13,280
important because if anything
happened, I don't know, you wake

727
00:41:13,280 --> 00:41:16,640
up to some crazy news like that
South African governments trying

728
00:41:16,640 --> 00:41:17,680
to nationalize them or
something.

729
00:41:17,680 --> 00:41:24,680
Then between and plants is 3035
odd percent of global rhodium

730
00:41:24,680 --> 00:41:28,120
production and I think Sibanya
is somewhere around quarter,

731
00:41:29,040 --> 00:41:31,520
then you're going to get a
pretty crazy price reaction and

732
00:41:31,520 --> 00:41:33,080
the commodity.
So it's kind of like a hedging

733
00:41:33,080 --> 00:41:35,600
strategy.
Like if anything went too wrong

734
00:41:35,600 --> 00:41:40,320
with the miners, they were such
a big, such a big amount of the

735
00:41:40,320 --> 00:41:43,560
global production that I'd make
out like a band on the bandit on

736
00:41:43,560 --> 00:41:47,920
the physical.
And that was how I kind of how I

737
00:41:47,920 --> 00:41:50,920
positioned the portfolio and
largely been kind of happy with

738
00:41:50,920 --> 00:41:53,400
how it played out.
Also think like with Rhodium,

739
00:41:53,400 --> 00:41:57,040
people really underestimate just
how violent the moves and that

740
00:41:57,040 --> 00:41:59,520
have been historically.
It's a, it's a by product.

741
00:41:59,520 --> 00:42:04,600
So when people require it, they
can't, there's no real way to

742
00:42:04,600 --> 00:42:09,000
increase the the supply and a
lot of the additional supply

743
00:42:09,000 --> 00:42:11,680
coming on in the next few years.
Kind of like what I mentioned

744
00:42:11,680 --> 00:42:14,520
with no nickel, it doesn't
actually have much rhodium at

745
00:42:14,520 --> 00:42:16,440
all.
It's very Palladium heavy.

746
00:42:17,360 --> 00:42:21,080
Some plants are supposed to add
a decent amount to the overall

747
00:42:21,160 --> 00:42:23,080
PGM market and that's all
Palladium heavy.

748
00:42:23,080 --> 00:42:28,080
So very low rhodium split and
even within, even within South

749
00:42:28,080 --> 00:42:33,560
Africa, it's all moving up to
sort of the northern Bush field

750
00:42:33,560 --> 00:42:35,040
and that's all more Palladium
heavy.

751
00:42:35,040 --> 00:42:40,240
Whereas historically like the
the splits that have been super

752
00:42:40,240 --> 00:42:43,440
high rhodium, like 9% rhodium,
that's just been in one

753
00:42:43,440 --> 00:42:45,240
particular area in the Bush
belt.

754
00:42:47,120 --> 00:42:50,080
Yeah.
Also the there's one other

755
00:42:50,080 --> 00:42:52,160
element and I know you kind of
touched on it, but I think it's

756
00:42:52,160 --> 00:42:55,960
kind of more prevalent than ever
that they, they have operations

757
00:42:55,960 --> 00:42:59,480
in the US that they, you know,
retrenched half of or something

758
00:42:59,840 --> 00:43:01,800
earlier this year, maybe late
last year.

759
00:43:01,800 --> 00:43:05,960
So I'm kind of curious to see
if, if the US government starts

760
00:43:05,960 --> 00:43:08,960
handing out money and they, they
might look at that, but not

761
00:43:08,960 --> 00:43:10,560
something to sort of pin any
hopes on.

762
00:43:10,560 --> 00:43:13,360
But I'm, I'm kind of curious
about that one there with a

763
00:43:13,360 --> 00:43:15,520
whole bunch of jobs in, in
Montana there.

764
00:43:16,840 --> 00:43:18,760
Should we, should we move this
on and, and talk about silver?

765
00:43:18,760 --> 00:43:20,840
Trev, I know you did a bit of
thinking about silver and

766
00:43:20,840 --> 00:43:23,400
there's a lot of talk about the,
the squeeze going on this week.

767
00:43:23,880 --> 00:43:28,200
Talk about yeah, you mentioned
earlier JD, like seeing seeing

768
00:43:28,200 --> 00:43:29,840
big returns in in corners of the
market.

769
00:43:29,840 --> 00:43:32,440
You can't be across everything
and like, you know, but but

770
00:43:32,440 --> 00:43:35,680
Silver's one just I've watched
the set up right in front of us,

771
00:43:35,680 --> 00:43:38,200
just watched, watched the like,
watched everything play out and

772
00:43:38,200 --> 00:43:40,400
been like.
You you told me when I sold one

773
00:43:40,400 --> 00:43:43,360
of these that I'm an idiot
that's going to whatever triple

774
00:43:43,360 --> 00:43:43,880
or something.
I.

775
00:43:43,960 --> 00:43:45,160
Forgot about that.
Yeah, right.

776
00:43:45,280 --> 00:43:47,600
I actually forgot about that.
You are an idiot.

777
00:43:47,600 --> 00:43:50,720
I had that on my actually, I'm
an idiot too, because I had that

778
00:43:50,720 --> 00:43:52,680
same stock of my to buy list and
I never bought it.

779
00:43:53,320 --> 00:43:54,840
Yeah, so.
We've all been there.

780
00:43:54,960 --> 00:43:57,000
Anyway, opportunity cost, the
exact same thing as real.

781
00:43:57,160 --> 00:44:01,520
Yeah, both opportunity cost like
silver, silver and gold, both

782
00:44:01,520 --> 00:44:03,840
all time highs.
Yeah, the silver bulls feel

783
00:44:03,840 --> 00:44:08,680
vindicated silver squeeze
playing out it's it's remarkable

784
00:44:08,680 --> 00:44:12,800
like where the the silver lovers
don't know where they live most

785
00:44:12,800 --> 00:44:16,280
of the time, but they they come
out in absolute spades like when

786
00:44:16,360 --> 00:44:19,280
when silver gets when it gets
bid and my God, there's a lot of

787
00:44:19,280 --> 00:44:22,160
them out there.
Stocks are flying especially

788
00:44:22,160 --> 00:44:25,000
like we're just more acquainted
with the ASX stocks, which are

789
00:44:25,000 --> 00:44:29,440
much lower quality silver names,
but even those silver names are

790
00:44:29,440 --> 00:44:33,400
just absolutely gone ballistic.
Is, is this one of those, one of

791
00:44:33,480 --> 00:44:36,840
those like derivatives of the
same theme like, you know,

792
00:44:37,120 --> 00:44:39,600
transition to real assets,
precious metals in vogue,

793
00:44:39,600 --> 00:44:42,680
etcetera, etcetera that you've
just let go by to the keeper as

794
00:44:42,680 --> 00:44:45,240
well, Ferg?
Yeah.

795
00:44:45,240 --> 00:44:47,800
Well, this is just, yeah.
I just see it as one big theme

796
00:44:47,880 --> 00:44:51,920
and like it's yeah, running
across the board like whether

797
00:44:51,920 --> 00:44:59,080
you've really played it via
gold, silver, platinum, it's all

798
00:45:00,480 --> 00:45:02,200
capturing.
Yeah.

799
00:45:02,360 --> 00:45:09,480
What has been like it's been
fascinating seen just how kind

800
00:45:09,480 --> 00:45:11,080
of capital star this got with
crypto.

801
00:45:11,080 --> 00:45:14,080
Like I saw it, crypto did take
up a lot of like the speculative

802
00:45:14,080 --> 00:45:18,680
fever, especially in like the
more juniors like I've, I don't

803
00:45:18,680 --> 00:45:22,600
know, don't earn any silver, but
I do own gold juniors and just

804
00:45:22,600 --> 00:45:27,240
seen that go from just massive
outflows even when gold was

805
00:45:27,240 --> 00:45:30,240
running was just absurd to me.
And to see that finally getting

806
00:45:30,240 --> 00:45:33,320
inflows now it's starting
retails only just starting to

807
00:45:33,320 --> 00:45:36,280
pay attention to it.
So I always kind of smile when I

808
00:45:36,280 --> 00:45:39,880
get emails now with people like,
you know, time to sort of head

809
00:45:39,880 --> 00:45:42,400
for the exits because some of
the stuff is getting

810
00:45:42,400 --> 00:45:44,720
overextended.
And I just feel whether it's

811
00:45:45,200 --> 00:45:48,400
gold, silver, platinum, like,
sure, if you want to kind of

812
00:45:48,400 --> 00:45:53,240
trade it for a small pullback
like be my guess, but I'm just

813
00:45:53,240 --> 00:45:55,760
closing my eyes and kind of
looking at where the sort of

814
00:45:55,760 --> 00:45:57,680
stuff will all be in five years
time.

815
00:45:57,880 --> 00:46:04,400
I just think this is this is
like the trade you kind of want

816
00:46:04,400 --> 00:46:08,480
to benchmark your rest of your
portfolio against and at the

817
00:46:08,480 --> 00:46:11,360
very least have absent, absent
physical.

818
00:46:11,440 --> 00:46:15,160
Yeah, which whichever one it is,
is 1 you can get your head

819
00:46:15,160 --> 00:46:17,040
around.
This is kind of why I went after

820
00:46:17,040 --> 00:46:21,080
platinum so heavily is because I
all the PGM space more in

821
00:46:21,080 --> 00:46:23,040
particular, it's because I
thought I could get my head

822
00:46:23,040 --> 00:46:24,960
around the sector.
It's quite simple really when

823
00:46:24,960 --> 00:46:28,600
you consider it's only a few
South African miners, non nickel

824
00:46:29,000 --> 00:46:35,720
and and whereas silver's a bit
more complex and yeah.

825
00:46:37,360 --> 00:46:39,440
It's interesting when you
mentioned like, yeah, part of

826
00:46:39,440 --> 00:46:42,560
your your buy thesis for for
rhodium was the fact it's this

827
00:46:42,560 --> 00:46:44,480
byproduct.
I always, I always like

828
00:46:44,800 --> 00:46:47,160
struggled to get over the line
on being really interested in

829
00:46:47,160 --> 00:46:50,240
silver just because of the huge
volumes of of Co production

830
00:46:50,640 --> 00:46:53,600
involved in it.
But you know, like bull markets

831
00:46:53,600 --> 00:46:56,880
to bull market things.
And yeah, sure, it makes it does

832
00:46:56,880 --> 00:46:58,160
make sense that silver's gone
crazy.

833
00:46:58,200 --> 00:47:02,800
Like bull market few interesting
deals this week silver wise.

834
00:47:04,040 --> 00:47:06,280
I can't I just can't believe the
numbers associated with some of

835
00:47:06,280 --> 00:47:10,000
the cap raisers.
So Boab Metals ASX listed, they

836
00:47:10,000 --> 00:47:12,480
raised 50 million bucks.
Why is that such a big number?

837
00:47:12,960 --> 00:47:16,640
Because like 3 months ago their
market cap was 50 million bucks.

838
00:47:17,240 --> 00:47:20,600
Like it's just crazy.
It's utterly crazy.

839
00:47:20,600 --> 00:47:23,560
I just, yeah, I had to pinch
myself when I saw saw that.

840
00:47:23,600 --> 00:47:26,440
And then this will be
interesting if it comes to

841
00:47:26,440 --> 00:47:27,840
market.
It's like a standalone vehicle.

842
00:47:27,840 --> 00:47:32,160
I doubt it.
It'll probably just be be go to

843
00:47:32,520 --> 00:47:34,040
an alternative company to sell
process.

844
00:47:34,040 --> 00:47:37,240
But S 32 revealed to be
divesting Cannington.

845
00:47:38,600 --> 00:47:40,400
Yeah, that'll be that'll be
that'll be really interesting

846
00:47:40,400 --> 00:47:44,160
asset to see standalone on its
own 2 feet on its own 2 feet.

847
00:47:44,160 --> 00:47:47,440
And there'll be an interesting
silver vehicle associated with

848
00:47:47,440 --> 00:47:51,200
it if it if it does find its way
to be a standalone ASX company.

849
00:47:51,200 --> 00:47:55,040
I'll be intrigued.
Funny thing about S 82 agreeing

850
00:47:55,040 --> 00:47:57,240
to divest Cannington.
I noticed the first time it

851
00:47:57,240 --> 00:48:00,000
popped up in in the Australian,
they got the banker wrong.

852
00:48:00,600 --> 00:48:03,600
And then and then like a week
later, same article pops up.

853
00:48:04,080 --> 00:48:06,040
Oh, no, it's actually, it's,
it's not that cap that's

854
00:48:06,040 --> 00:48:08,400
selling, that's selling
Cannington.

855
00:48:08,480 --> 00:48:11,400
It's Baron Joey and JP Morgan.
JP Morgan.

856
00:48:11,600 --> 00:48:13,080
Yeah, so they, they completely
cooked it.

857
00:48:13,080 --> 00:48:14,760
But you know what?
You know what all three of those

858
00:48:14,800 --> 00:48:17,640
investment banks absolutely do
know to do when it comes to a

859
00:48:17,640 --> 00:48:19,080
sale process, mate, enlighten
me.

860
00:48:19,520 --> 00:48:22,120
They will use interlinks as the
virtual data room.

861
00:48:22,200 --> 00:48:23,200
Interlinks.
Interlinks.

862
00:48:23,320 --> 00:48:25,440
Back in my banking days, there
was no alternative.

863
00:48:25,640 --> 00:48:28,880
You used interlinks because I
mean you're talking about

864
00:48:28,880 --> 00:48:32,400
billions of dollars here like
the deal mechanics have to be on

865
00:48:32,400 --> 00:48:34,440
point.
Everything about that entire

866
00:48:34,440 --> 00:48:37,080
process can be managed with
absolute ease.

867
00:48:37,080 --> 00:48:41,200
When it comes to like interlinks
entire like deal suite, big

868
00:48:41,200 --> 00:48:44,040
interlinks, fan use interlinks.
They also sponsor us, if you

869
00:48:44,040 --> 00:48:45,680
can't tell, because this is an
ad for Interlinks.

870
00:48:45,960 --> 00:48:47,320
Interlinks.
Details in the show notes.

871
00:48:47,600 --> 00:48:50,360
Ferg, we couldn't have you on
and not talk about energy.

872
00:48:50,360 --> 00:48:53,000
I think Trev and I have both
been pretty entranced with, with

873
00:48:53,000 --> 00:48:57,040
the energy space as we kind of
just scavenge around looking for

874
00:48:57,040 --> 00:48:59,960
value again.
And I might add the, the

875
00:48:59,960 --> 00:49:03,200
offshore and other services type
players to that conversation as

876
00:49:03,200 --> 00:49:06,240
well, because I think I think
they're one of the, the, the

877
00:49:06,240 --> 00:49:09,240
lesser sort of pockets now in,
in the areas that we look that

878
00:49:09,240 --> 00:49:13,200
actually shows some some really
kind of compelling value.

879
00:49:13,200 --> 00:49:15,080
And I know you've, you've
thought about it a lot.

880
00:49:15,080 --> 00:49:18,080
I know you've held some of these
names for for quite some time,

881
00:49:18,080 --> 00:49:22,000
But are you, are you more
attracted to this space given

882
00:49:22,040 --> 00:49:24,840
everything else is kind of
moving in recent times and than

883
00:49:24,840 --> 00:49:27,680
you have been say a year ago or
even longer when you started

884
00:49:27,680 --> 00:49:29,280
writing about these sorts of
parts of the market?

885
00:49:30,480 --> 00:49:34,040
Yeah, well, my problem was I
went heavy in it like a year ago

886
00:49:34,040 --> 00:49:37,080
and so I've just round tripped
back anything I made.

887
00:49:37,400 --> 00:49:41,560
So yeah, you're talking some
quite a sort of sunk cost in it.

888
00:49:41,560 --> 00:49:46,360
But no, I, I, I think it's going
to have it stay in the sun just

889
00:49:46,360 --> 00:49:49,600
as everyone sort of hated metals
a few years ago.

890
00:49:49,600 --> 00:49:53,080
And once it starts to move, it
drags sediment with it.

891
00:49:53,600 --> 00:49:55,760
I think the same is going to
happen across the energy space.

892
00:49:56,600 --> 00:49:58,360
And historically it has been the
case as well.

893
00:49:58,360 --> 00:50:03,360
When you consider it's, it's
almost logical that like miners

894
00:50:03,440 --> 00:50:05,800
will always look the best when
they're sort of input costs the

895
00:50:05,800 --> 00:50:07,240
lowest.
And then when energy spikes,

896
00:50:07,240 --> 00:50:12,280
squeezes margins and then
everyone inflation is goes hand

897
00:50:12,280 --> 00:50:15,360
in hand with energy.
So once inflation picks up, the

898
00:50:15,360 --> 00:50:17,440
miners aren't as attractive.
And anyway, everyone sort of

899
00:50:18,400 --> 00:50:22,760
foams of the mouth and piles
into energy as a hedge for

900
00:50:22,760 --> 00:50:26,960
inflation and, and yeah, the
miners having their margin

901
00:50:26,960 --> 00:50:28,880
squeeze.
So you can look at a lot of

902
00:50:29,360 --> 00:50:31,120
historic sort of examples of
that.

903
00:50:33,480 --> 00:50:38,800
I've got more bullish on energy
just because of how how much

904
00:50:38,800 --> 00:50:41,000
pain has gone through.
Like you were mentioning sort of

905
00:50:41,000 --> 00:50:44,280
the particularly the offshore
drillers.

906
00:50:45,040 --> 00:50:47,760
I thought we were seeing the
cycle start to inflict about a

907
00:50:47,760 --> 00:50:53,400
year ago.
And since then we've just seen a

908
00:50:53,400 --> 00:50:58,160
whole lot more drills, drill
ships and sort of even see me

909
00:50:58,160 --> 00:51:00,280
subscript.
So the whole sector, if you

910
00:51:00,280 --> 00:51:02,160
will, has got even more
consolidated.

911
00:51:02,240 --> 00:51:07,520
You've got had oil prices come
down and yet there's no kind of

912
00:51:07,520 --> 00:51:09,600
getting around the fact that is
the future of oil growth.

913
00:51:09,960 --> 00:51:13,320
It's over 70% of future oil
growth is going to have to come

914
00:51:13,320 --> 00:51:16,200
from offshore.
That's just, it's the facts of

915
00:51:16,200 --> 00:51:19,960
where where the future supply
lies.

916
00:51:19,960 --> 00:51:23,560
And yet the the sector itself is
getting more and more condensed.

917
00:51:23,560 --> 00:51:27,680
And this is kind of what you see
in cyclical sectors is before

918
00:51:27,680 --> 00:51:31,840
you get to that inflection
point, it's just been so capital

919
00:51:31,840 --> 00:51:35,440
starved that a small amount of
capital coming into it will just

920
00:51:35,440 --> 00:51:40,880
have a really outsized result.
And yeah, I just, I think we're

921
00:51:40,880 --> 00:51:47,200
probably always, I thought that
probably going to see

922
00:51:48,040 --> 00:51:52,640
utilisations start to really
bite probably mid next year.

923
00:51:53,320 --> 00:51:58,120
I think a lot of the, the IEA is
obviously they're just horribly

924
00:51:58,240 --> 00:52:00,720
wrong with most their
projections over time.

925
00:52:01,040 --> 00:52:04,800
I kind of have a head of name
where they nailed their, their

926
00:52:04,800 --> 00:52:06,960
bearish take on oil and it was
like a stormtrooper like

927
00:52:07,080 --> 00:52:11,800
actually hitting someone.
And it was just a, just a one

928
00:52:11,800 --> 00:52:14,320
off like if you know their
actual track record, they've

929
00:52:14,320 --> 00:52:16,520
pretty much been wrong
continually from more than a

930
00:52:16,520 --> 00:52:20,720
decade.
But yeah, they did, they were

931
00:52:20,720 --> 00:52:25,400
right last year.
And I, I just think there's a

932
00:52:25,400 --> 00:52:29,520
lot less spare capacity around
And well, everyone's kind of

933
00:52:29,520 --> 00:52:31,880
foaming at the mouth on medals
running.

934
00:52:31,880 --> 00:52:34,480
I think probably the energy
space is where the best value

935
00:52:34,480 --> 00:52:36,560
is.
And there's been some of my most

936
00:52:36,560 --> 00:52:42,000
recent purchases have been just
like in what, what, what does

937
00:52:42,240 --> 00:52:43,840
someone think will never move
again?

938
00:52:43,840 --> 00:52:46,200
Like what's the absolute epitome
of like cyclical?

939
00:52:46,200 --> 00:52:49,000
And that's where I found myself.
Quite a few of the companies

940
00:52:49,000 --> 00:52:52,160
have bought recently have been
like seismic offshore, like the

941
00:52:52,240 --> 00:52:56,080
companies actually search for
oil offshore.

942
00:52:56,200 --> 00:52:59,440
And that that's probably the one
space that had an even more

943
00:52:59,440 --> 00:53:01,560
brutal time than the offshore
drillers.

944
00:53:01,600 --> 00:53:04,360
The offshore drillers obviously
all went bankrupt.

945
00:53:04,400 --> 00:53:07,720
But with seismic, if you take it
from it was like the peak in

946
00:53:07,720 --> 00:53:13,440
2013 and like 70% went, got
taken over, closed down, merged.

947
00:53:14,040 --> 00:53:18,160
And yeah.
And they're actually quite good

948
00:53:18,160 --> 00:53:19,920
companies, if you will.
They were just capital staff.

949
00:53:19,920 --> 00:53:23,080
Like they're quite tech focused.
They're quite conservative.

950
00:53:23,080 --> 00:53:24,600
They've got a lot of cash on the
balance sheet.

951
00:53:24,600 --> 00:53:29,880
And they just just hate it
because who would invest in in

952
00:53:29,880 --> 00:53:32,760
growing the oil supply when
supposedly we can just turn on

953
00:53:32,760 --> 00:53:35,600
share whenever we need and the
world's going to run on

954
00:53:36,080 --> 00:53:38,520
windmills and solar in another
decade.

955
00:53:39,040 --> 00:53:42,640
I'm sorry with you on the yeah,
on the, on the like risk return

956
00:53:43,520 --> 00:53:49,120
dynamics of, of being like,
yeah, value hunting in energy

957
00:53:49,120 --> 00:53:52,360
right now.
Like we, we interviewed Rob

958
00:53:52,400 --> 00:53:54,520
Mullins episode there earlier
this week.

959
00:53:55,240 --> 00:53:56,920
I got it.
Oh, it's wicked.

960
00:53:57,120 --> 00:54:01,680
And it makes a compelling thesis
for for some, some of these like

961
00:54:01,760 --> 00:54:05,760
stupidly cheap on, on a, on a
valuation basis, you know,

962
00:54:05,760 --> 00:54:11,480
established European.
Yeah, like oil companies even

963
00:54:11,480 --> 00:54:15,560
even like the, the more known
ones, like they think of BP,

964
00:54:15,560 --> 00:54:17,240
right?
Like they've, they've completely

965
00:54:17,240 --> 00:54:19,480
backtracked now that BPS about
oil again.

966
00:54:19,480 --> 00:54:22,520
And they were the most
psychotically pro like, you

967
00:54:22,520 --> 00:54:25,960
know, renewables of the, of the
oil and gas.

968
00:54:26,000 --> 00:54:27,720
They've the biggest identity
crisis of everyone.

969
00:54:28,280 --> 00:54:30,480
They've completely flipped.
They've like, you know, in very

970
00:54:30,480 --> 00:54:32,400
recent history.
And now they're, they find

971
00:54:32,400 --> 00:54:35,160
themselves sort of like, you
know, vulnerable activists are

972
00:54:35,160 --> 00:54:37,120
involved.
They're like Shell is rumoured

973
00:54:37,120 --> 00:54:39,560
to be, you know, trying to
consolidate there.

974
00:54:39,560 --> 00:54:44,080
So like you can get, you can
get, yeah, you can pay super

975
00:54:44,080 --> 00:54:46,960
reasonable multiples for, for,
you know, businesses that have

976
00:54:46,960 --> 00:54:49,840
been around 100 of years and
will be around for for hundreds

977
00:54:49,840 --> 00:54:51,120
more.
At least their assets will be

978
00:54:51,800 --> 00:54:56,480
with tremendous cash flow and
and ride the the wave of tide

979
00:54:56,480 --> 00:54:59,240
turning to kind of be pro
shareholder return instead of

980
00:54:59,680 --> 00:55:03,880
instead of don't know what you'd
call the other stuff wasn't

981
00:55:03,880 --> 00:55:08,360
shareholder return.
You know, my my favorite way of

982
00:55:08,360 --> 00:55:11,800
just I always like to try and
come up a way of just expressing

983
00:55:12,000 --> 00:55:15,720
like how cheap something it is
and I like playing around with

984
00:55:15,720 --> 00:55:19,120
ratios and I put it in one of my
first fines, probably a mouthful

985
00:55:19,120 --> 00:55:21,240
to a guy, I guess.
And I was just looking at the

986
00:55:21,240 --> 00:55:27,000
ratios of other NASDAQ first
like sectors.

987
00:55:27,000 --> 00:55:32,360
And when I was like, use the
forget what minor, there's like

988
00:55:32,360 --> 00:55:36,600
a sector ETF for mining and it
was like just took the ratio

989
00:55:36,600 --> 00:55:42,080
from the peak in 2012 thirteen
to now and what it would need to

990
00:55:42,160 --> 00:55:46,040
do to get back to that peak.
And it was like a it's like a 9X

991
00:55:46,600 --> 00:55:51,840
for miners across the board.
And then did it with with

992
00:55:51,840 --> 00:55:54,040
energy.
And that was the broad energy

993
00:55:54,040 --> 00:55:57,040
producers.
And that was more or less the

994
00:55:57,040 --> 00:55:59,920
same.
If it was an 80X gold was a

995
00:55:59,920 --> 00:56:02,120
little bit less.
I think it was like 7X gold

996
00:56:02,120 --> 00:56:09,000
producers, but then oil services
granted I used equal weight,

997
00:56:09,000 --> 00:56:13,440
which I probably should have
used market cap, but it was that

998
00:56:13,440 --> 00:56:19,320
was 62 times to get back to its
2013 peak.

999
00:56:19,840 --> 00:56:26,000
And so I think you just can't, I
can't express how like hated and

1000
00:56:26,000 --> 00:56:32,320
how much capital destruction has
been in oil services and how

1001
00:56:32,320 --> 00:56:34,920
much runway there is,
especially, especially if you

1002
00:56:34,920 --> 00:56:37,040
kind of tie some of these trends
I've talked about to give it

1003
00:56:37,040 --> 00:56:41,200
like if one of my favorite
hunting ground is small Asian

1004
00:56:41,280 --> 00:56:45,800
micro cap oil services.
Like a my biggest, I think my

1005
00:56:45,960 --> 00:56:52,120
biggest position in like a
individual company is actually a

1006
00:56:52,840 --> 00:56:57,080
yeah, is a little, a little OSB
company.

1007
00:56:57,080 --> 00:57:00,520
And yeah, that's trading on the
Singapore Exchange.

1008
00:57:00,920 --> 00:57:05,200
And yeah, that's been bankrupt
twice, which is, and yeah,

1009
00:57:05,280 --> 00:57:06,880
Frame, when I first bought it,
reached out.

1010
00:57:06,880 --> 00:57:09,160
He's like, how can you put that
much money into a little noodle

1011
00:57:09,160 --> 00:57:11,880
company?
It's hated unhated.

1012
00:57:12,240 --> 00:57:15,040
Jada, you come into work the
other day and you're like, like

1013
00:57:15,400 --> 00:57:19,600
talk to allocate to energy.
How do you think about Yeah, I

1014
00:57:19,600 --> 00:57:21,080
don't know, like like placing
bets.

1015
00:57:21,080 --> 00:57:23,640
There's a lot.
There's a lot of different ways

1016
00:57:23,800 --> 00:57:27,120
oil services could be, yeah, it
could be the tech, it could be,

1017
00:57:27,120 --> 00:57:28,880
it could be the actual producers
like.

1018
00:57:29,440 --> 00:57:32,360
Yeah, I'm not going to be as
creative as as Ferg with

1019
00:57:33,080 --> 00:57:37,160
Singaporean listed micro cap
offshore services plays.

1020
00:57:37,640 --> 00:57:39,240
And I don't think there's that
many people we have the

1021
00:57:39,240 --> 00:57:41,320
privilege of speaking about
those sorts of companies with.

1022
00:57:42,080 --> 00:57:46,040
But I, I just think it's a, a
basket approach because exactly

1023
00:57:46,040 --> 00:57:48,680
like you said there Ferg, the,
the whole complex has been

1024
00:57:48,680 --> 00:57:52,120
starved of capital.
And that is from the, the oil

1025
00:57:52,120 --> 00:57:55,760
companies through to the, the
services makers.

1026
00:57:55,760 --> 00:57:59,400
And yeah, I mean, the services
makers in particular have had a

1027
00:57:59,400 --> 00:58:02,240
tough time with, with all the
bankruptcies and everything.

1028
00:58:02,680 --> 00:58:05,800
But as you know, you've, you've
sort of elaborated on better

1029
00:58:05,800 --> 00:58:09,200
than anyone, Ferg, that leaves
them in, in good kind of

1030
00:58:09,200 --> 00:58:12,240
financial health now.
And there's been a pick up from

1031
00:58:12,560 --> 00:58:15,320
the real doldrums that we saw a
long time ago.

1032
00:58:16,120 --> 00:58:19,600
And then with the, the actual
producers, you're getting paid

1033
00:58:19,600 --> 00:58:21,920
to wait.
So even if it's going to take a

1034
00:58:21,920 --> 00:58:25,680
while to come around, if you're
a bit sort of selective, we're

1035
00:58:25,680 --> 00:58:29,480
talking like a 10% dividend
yield, like it's, it's crazy.

1036
00:58:29,480 --> 00:58:34,680
We're talking free cash flow
yields of 2030 odd percent even

1037
00:58:34,680 --> 00:58:36,560
north of that in, in some kind
of cases.

1038
00:58:36,560 --> 00:58:40,880
So it doesn't feel super, super
onerous.

1039
00:58:40,880 --> 00:58:42,840
It doesn't feel like you're,
you're waiting on a day that

1040
00:58:42,960 --> 00:58:45,160
that might never come because
you're, you're being pretty well

1041
00:58:45,160 --> 00:58:50,560
compensated, you know, with,
with risks to it as well given

1042
00:58:50,560 --> 00:58:52,560
jurisdiction and stuff where,
where you might be.

1043
00:58:52,560 --> 00:58:57,520
But I, I, I don't feel any sort
of reservations about putting a

1044
00:58:57,520 --> 00:59:00,880
decent portion of my kind of
money there.

1045
00:59:00,920 --> 00:59:02,680
I mean how you kind of think
about it is there is there

1046
00:59:02,680 --> 00:59:06,680
differences in in thought there?
I I wish I had more knowledge,

1047
00:59:06,680 --> 00:59:09,920
like more specialized knowledge
to have like a more thoughtful

1048
00:59:10,400 --> 00:59:14,440
yeah allocation.
I think, yeah, I think like

1049
00:59:15,760 --> 00:59:17,960
rising tide will lift all boats,
everyone will do really well.

1050
00:59:17,960 --> 00:59:20,880
But I think you can have like
there'll be some killer returns

1051
00:59:21,000 --> 00:59:25,840
in very specific like you know,
when if permitting changes or if

1052
00:59:25,840 --> 00:59:28,560
or if it may just starts like
spending a lot of money in a

1053
00:59:28,560 --> 00:59:30,440
certain area and there's some
small cap that really benefits

1054
00:59:30,440 --> 00:59:33,120
from that like this.
Yeah, to to to that point.

1055
00:59:33,120 --> 00:59:35,840
And one thing you perhaps
haven't touched on as as much

1056
00:59:35,840 --> 00:59:38,440
Ferg, is the the Aussie
environment, specifically on the

1057
00:59:38,560 --> 00:59:41,400
the East Coast of Australia.
But I think there's going to be

1058
00:59:41,400 --> 00:59:45,880
over the next five years a lot
of opportunities there with, you

1059
00:59:45,880 --> 00:59:48,600
know, perhaps led by policy
changes and, and they sorts of

1060
00:59:48,600 --> 00:59:51,840
things.
And the, the, the really, you

1061
00:59:51,840 --> 00:59:54,080
know, rubbing your face in the
challenges that are going to

1062
00:59:54,080 --> 00:59:58,360
come in places like Victoria and
NSW with, with energy prices

1063
00:59:58,360 --> 01:00:02,240
already on a, you know, very,
very sort of sharply upturning

1064
01:00:02,240 --> 01:00:04,280
trend.
That's, that's not going to go

1065
01:00:04,280 --> 01:00:07,080
away until it's really kind of
felt unfortunately.

1066
01:00:07,080 --> 01:00:10,040
And there are going to be a
number of winners at the back

1067
01:00:10,040 --> 01:00:15,480
end of that.
You know the way the way I like

1068
01:00:15,480 --> 01:00:20,760
to come at it is 11 company that
just had in mind as you've been

1069
01:00:20,760 --> 01:00:29,000
talking about this is a European
well, what's the service company

1070
01:00:29,400 --> 01:00:32,920
energy service company Saiping
and it's had this massive recap,

1071
01:00:32,920 --> 01:00:37,240
but now paying nearly double
digit dividend.

1072
01:00:37,880 --> 01:00:43,640
It's going to merge with another
massive Norwegian oil service

1073
01:00:43,640 --> 01:00:46,240
company.
And what I always love to do

1074
01:00:46,240 --> 01:00:48,280
like is this function coifen
where you can look at all the

1075
01:00:48,280 --> 01:00:52,560
analysts and their forward
average Ford estimates for the

1076
01:00:52,560 --> 01:00:54,600
next.
Some of it usually goes out five

1077
01:00:54,600 --> 01:00:57,600
years and you can just see what
are they actually thinking this

1078
01:00:57,600 --> 01:01:01,120
company's capable of?
And they they literally won't

1079
01:01:01,120 --> 01:01:04,400
even give it like sales growth.
I think it was 2% growth over

1080
01:01:04,400 --> 01:01:08,280
the next five years in sales.
And I think it's I think it's

1081
01:01:08,280 --> 01:01:11,520
earnings with negative.
And this was sub C7.

1082
01:01:11,520 --> 01:01:13,560
It was even worse.
It was like they fought over the

1083
01:01:13,560 --> 01:01:16,840
next five years its earnings
were going to be I think it was

1084
01:01:16,840 --> 01:01:19,840
down, down 12%.
And you compare this to

1085
01:01:19,840 --> 01:01:26,720
something like I competed at the
time to NVIDIA and they just see

1086
01:01:26,720 --> 01:01:31,400
it by 2027 already at whatever
it is now. 4.5 trillion still

1087
01:01:31,400 --> 01:01:35,560
has to grow its grow its sales
another 120%.

1088
01:01:36,440 --> 01:01:38,400
And China's just told them to
fuck off.

1089
01:01:38,480 --> 01:01:40,320
Like get out, we're not buying
any shit anymore.

1090
01:01:40,960 --> 01:01:43,360
I I remember reading that my jaw
was on the floor.

1091
01:01:43,600 --> 01:01:46,000
The, the growth that that was
consensus, the growth that

1092
01:01:46,000 --> 01:01:48,360
everyone had factored in was
astounding.

1093
01:01:48,360 --> 01:01:50,960
It was.
It was, yeah, just jaw-dropping

1094
01:01:50,960 --> 01:01:52,960
sort of stuff.
Yeah.

1095
01:01:52,960 --> 01:01:57,880
And so you just want like, you
want stuff that you don't have

1096
01:01:57,880 --> 01:02:01,200
to, you don't want to make it
too hard for yourself to make

1097
01:02:01,360 --> 01:02:04,000
money.
Like if it just, I feel like

1098
01:02:04,000 --> 01:02:07,160
that could be a company and it's
a big lesson in My Portfolio.

1099
01:02:07,160 --> 01:02:12,920
I wish I'd gone to more of those
where it was just wasn't such a

1100
01:02:12,920 --> 01:02:14,440
narrative trade.
It was just off everyone's

1101
01:02:14,440 --> 01:02:18,160
radar.
Whereas with some of the more

1102
01:02:18,160 --> 01:02:22,040
offshore stuff, it was, it was
in a lot more people's

1103
01:02:22,080 --> 01:02:24,840
portfolio.
It was like the real name to

1104
01:02:24,840 --> 01:02:28,320
play it.
And so you get more volatility,

1105
01:02:28,320 --> 01:02:30,400
whereas some of some of these
names are just kind of

1106
01:02:30,960 --> 01:02:33,240
essentially forgotten about.
Like you can look at 5:00 PM and

1107
01:02:33,240 --> 01:02:36,960
it's been since, since the big
recap, it doesn't experience

1108
01:02:36,960 --> 01:02:41,040
nearly the volatility and anyone
that's interested in options has

1109
01:02:41,040 --> 01:02:45,480
got really long option market.
So you can kind of joke that's

1110
01:02:45,480 --> 01:02:48,360
like if I did want to create
like a future dividend

1111
01:02:48,560 --> 01:02:52,480
portfolio, just have a lot of
these sort of at the money call

1112
01:02:52,480 --> 01:02:56,560
options that I'd exercise and
he'd go out sort of for four

1113
01:02:56,560 --> 01:02:59,760
years with the option market and
then exercise and then and start

1114
01:02:59,760 --> 01:03:02,080
collecting.
Hopefully it's still sort of,

1115
01:03:02,440 --> 01:03:06,280
I'm guessing it's going to be a
pretty healthy dividend in four

1116
01:03:06,280 --> 01:03:08,040
years time with where I see the
market going.

1117
01:03:08,920 --> 01:03:12,320
So I love and I've got to play
similar to that and seismic as

1118
01:03:12,320 --> 01:03:15,000
well.
Like I love flows like and then

1119
01:03:15,000 --> 01:03:19,400
that one you can go right out to
2000, December 2029.

1120
01:03:19,720 --> 01:03:23,880
So you can really take bits
whatever.

1121
01:03:23,960 --> 01:03:28,400
How many years at 4 1/2 now?
Yeah, I love those plays.

1122
01:03:29,560 --> 01:03:31,640
I like it, got some some digging
to do there.

1123
01:03:32,400 --> 01:03:36,440
Tin, tin, tin Why is the market?
Why is the market sleeping on

1124
01:03:36,440 --> 01:03:38,800
tin?
It always comes back to tin.

1125
01:03:41,320 --> 01:03:44,560
I love tin.
I think tin is one of those tiny

1126
01:03:44,560 --> 01:03:47,080
little markets where no one
cares because it's too small.

1127
01:03:47,120 --> 01:03:55,200
But there's literally every bit
of information that's coming out

1128
01:03:55,480 --> 01:03:58,880
is bullish when you consider why
am I?

1129
01:03:59,280 --> 01:04:02,040
Everyone kind of thinks it can
ramp back up.

1130
01:04:02,040 --> 01:04:04,400
They started issuing the license
and then it's just been a slow

1131
01:04:04,400 --> 01:04:07,360
trickle.
And my take on that is they

1132
01:04:07,760 --> 01:04:10,640
pretty much hydrated all the
easy stuff and now they have to

1133
01:04:10,640 --> 01:04:13,920
go underground and it's such a
mess here that they're not going

1134
01:04:13,920 --> 01:04:16,960
to be able to do it.
Ramp up a complex mining

1135
01:04:17,280 --> 01:04:21,520
operation quickly.
Indonesia has been a massive

1136
01:04:21,520 --> 01:04:26,920
crackdown.
They've really, really come down

1137
01:04:26,920 --> 01:04:31,440
heavily on a lot of the legal
mining operations.

1138
01:04:31,720 --> 01:04:35,840
Granted, in typical Indonesian
fashion, they kind of size them

1139
01:04:35,840 --> 01:04:39,480
more than head them over to a
company which was bound to have

1140
01:04:39,480 --> 01:04:44,000
some political connections.
But that, all of this is just

1141
01:04:44,880 --> 01:04:48,840
great icing on the cake in what
was already kind of a sector and

1142
01:04:48,960 --> 01:04:51,000
supply deficit.
And if you look like last year

1143
01:04:51,000 --> 01:04:55,720
before, the only thing that
saved it was demand came in weak

1144
01:04:55,720 --> 01:04:58,840
as supply came in weak.
It was kind of like a set up

1145
01:04:58,840 --> 01:05:05,160
where supply came in sort of
three 4% deficit and then demand

1146
01:05:05,160 --> 01:05:08,600
took a similar hit.
And so market balanced and now

1147
01:05:09,600 --> 01:05:13,200
the only thing kind of I've been
really keeping a close eye on is

1148
01:05:13,200 --> 01:05:15,880
inventories and inventories are
really drawing down rapidly.

1149
01:05:16,040 --> 01:05:19,760
So with the LMA is at kind of
record lows.

1150
01:05:19,760 --> 01:05:28,520
So don't that's at the point
where it's pretty much near

1151
01:05:28,520 --> 01:05:32,880
Brock bottom.
And the one to watch is the the

1152
01:05:32,880 --> 01:05:36,480
Shanghai Metals Exchange or
Shanghai.

1153
01:05:36,840 --> 01:05:39,200
It is chefy.
Yeah, yeah.

1154
01:05:39,960 --> 01:05:48,120
What is it if if it's if it's H,
if E and that that's drawing

1155
01:05:48,120 --> 01:05:51,440
down has been drawing down like
8% week on week.

1156
01:05:51,840 --> 01:05:55,160
And if you just mapped in
against it.

1157
01:05:56,240 --> 01:05:59,240
That's why we're seeing like 10
just keep gaining more traction

1158
01:05:59,240 --> 01:06:01,240
because if they're not they're
drawing working through their

1159
01:06:01,240 --> 01:06:05,600
inventory and and they're not
getting more coming in from my

1160
01:06:05,600 --> 01:06:10,480
MA like then Tim price is going
to have to keep trying to

1161
01:06:10,480 --> 01:06:12,720
incentivize more 10 and I'm just
there.

1162
01:06:13,000 --> 01:06:14,840
I don't think that's going to
come on quickly.

1163
01:06:15,120 --> 01:06:19,000
And then like you're not paying
up for like my favorite vehicles

1164
01:06:19,000 --> 01:06:24,040
still Middle East Middlesex
don't really like the DRC and

1165
01:06:24,040 --> 01:06:26,840
the fact that they're I've been
off on this, like trying to

1166
01:06:26,840 --> 01:06:29,200
acquire green tech hasn't really
worked out.

1167
01:06:29,640 --> 01:06:32,080
Maybe that cash, maybe they get
lucky with green tech, who

1168
01:06:32,080 --> 01:06:33,760
knows, but doesn't look like it
now.

1169
01:06:34,080 --> 01:06:37,960
And at some point that cash will
hopefully start finding its way

1170
01:06:37,960 --> 01:06:40,640
into buybacks when it's already
looking cheap.

1171
01:06:41,280 --> 01:06:43,560
Or maybe they'll buy a few more
10 juniors.

1172
01:06:43,560 --> 01:06:46,480
I don't know.
Either way, it's not it's not

1173
01:06:46,480 --> 01:06:48,800
terrible.
And I just think more and more

1174
01:06:48,800 --> 01:06:50,920
and more people are going to
catch on to the faces as time

1175
01:06:50,920 --> 01:06:54,920
goes on.
Yeah, Ding, Ding, Ding, like

1176
01:06:55,160 --> 01:06:58,200
like like it Yeah, I actually
think, I actually think about

1177
01:06:58,200 --> 01:07:01,040
expressing the tin jade even
even further down the yeah, the

1178
01:07:01,040 --> 01:07:06,120
curve now, like going, going for
yeah, some of the marginal stuff

1179
01:07:06,120 --> 01:07:09,440
that becomes economic and and
riding that wave out.

1180
01:07:09,640 --> 01:07:14,000
But the I think coppers, the
other one where like the supply

1181
01:07:14,000 --> 01:07:17,240
story's so good right now.
And yeah, it's just like that

1182
01:07:17,240 --> 01:07:20,440
transition period from the
supply shocks.

1183
01:07:20,880 --> 01:07:23,640
There's been multiple of them
just like depleting inventories

1184
01:07:23,640 --> 01:07:25,720
and then being reflected in in
the price, although the price is

1185
01:07:25,720 --> 01:07:29,400
moving substantially as well.
But again, of course produces

1186
01:07:29,400 --> 01:07:32,080
the beneficiaries of them.
But anything with a very near

1187
01:07:32,080 --> 01:07:36,320
term production story like
that's a developer capture, so

1188
01:07:36,320 --> 01:07:38,680
much, so much upside, especially
if it's like a somewhat marginal

1189
01:07:38,680 --> 01:07:45,040
project.
Yeah, And the only other thing I

1190
01:07:45,360 --> 01:07:48,280
think I forgot mails eggs as
well was OK, as I was talking

1191
01:07:48,280 --> 01:07:50,840
about before there's there's two
analysts that cover it and

1192
01:07:50,840 --> 01:07:53,520
they're both bearish as well.
Bring that up.

1193
01:07:53,800 --> 01:07:57,000
They expect, I think, I think
it's hard to remember what it

1194
01:07:57,000 --> 01:07:58,120
was.
I, I had a look at it.

1195
01:07:58,120 --> 01:08:01,640
I think the sales were down like
1/4 over the next five years and

1196
01:08:01,640 --> 01:08:03,960
I think they expect its earnings
to get cut in half.

1197
01:08:04,920 --> 01:08:05,800
I'd love to see you there.
There's.

1198
01:08:05,800 --> 01:08:07,440
No benefit.
There's no benefit covering

1199
01:08:07,440 --> 01:08:10,320
Middlesex because you're like,
and they're never going to do a

1200
01:08:10,320 --> 01:08:11,480
deal, they're never going to
raise equity.

1201
01:08:11,480 --> 01:08:14,400
So it's like.
Yeah, true.

1202
01:08:14,960 --> 01:08:16,640
They get they get like one hour
every month.

1203
01:08:19,640 --> 01:08:22,800
Awesome Ferg, been great
chatting and picking your brain

1204
01:08:22,800 --> 01:08:25,240
as as always, always good to
sort of hear about what you're,

1205
01:08:25,240 --> 01:08:26,439
what you're thinking, what
you're looking at.

1206
01:08:26,439 --> 01:08:29,000
And yeah, there's just so much
interesting stuff in the market

1207
01:08:29,000 --> 01:08:31,760
right now.
So I love just picking through

1208
01:08:31,760 --> 01:08:33,640
it or with with people that
think about it kind of

1209
01:08:33,640 --> 01:08:35,840
differently.
So it's been awesome having you

1210
01:08:35,840 --> 01:08:38,680
on again mate.
Always a pleasure, always love

1211
01:08:38,680 --> 01:08:41,640
chatting to you boys, yeah?
Thank you mate.

1212
01:08:41,920 --> 01:08:43,520
Always awesome to chat with
Ferg.

1213
01:08:43,680 --> 01:08:46,640
Love the way he thinks about
markets, about the world, about

1214
01:08:46,640 --> 01:08:49,880
trolling for hated stuff.
Almost as much as I love our

1215
01:08:49,960 --> 01:08:52,479
partners.
Mate, a big thank you to focus

1216
01:08:52,520 --> 01:08:55,479
platform by market tech Sandvik
ground support.

1217
01:08:56,160 --> 01:08:59,160
I mark the conference is coming
up very soon, next week

1218
01:08:59,200 --> 01:09:01,439
actually, we're going to be in
Sydney, so check that one out.

1219
01:09:01,760 --> 01:09:05,160
And last but not least,
interlinks who to root.

1220
01:09:05,359 --> 01:09:08,960
Who to root?
Now remember, I'm an idiot.

1221
01:09:09,200 --> 01:09:11,680
JD is an idiot.
If you thought any of this was

1222
01:09:11,680 --> 01:09:14,279
anything other than
entertainment, you're an idiot

1223
01:09:14,560 --> 01:09:15,760
and you need to read out a
disclaimer.