Lobo Tiggre: The Commodities Super Cycle | Gold, Silver, Copper, Uranium & Critical Minerals

Key Concepts

• Commodity Super Cycle: A prolonged period of rising commodity prices driven by fundamental supply and demand imbalances.
• Money Printing/Quantitative Easing (QE): Central bank actions to increase the money supply, often leading to inflation.
• Inflation: A general increase in prices and decrease in the purchasing value of money.
• Bullion: Gold or silver in physical form, such as bars or coins.
• Value Speculator: An investor who seeks to buy assets at a discount to their intrinsic value, with a focus on long-term appreciation.
• FOMO (Fear Of Missing Out): An emotional response that drives investors to buy assets that are rapidly increasing in price, often at the peak.
• Stagflation: A combination of high inflation, high unemployment, and slow economic growth.
• Resource Nationalism: Government policies aimed at controlling or limiting foreign access to a country's natural resources.
• Backwardation (in futures markets): A market condition where the price of a futures contract is lower than the spot price, often indicating tight supply.
• "Trump Shock": Potential market volatility and policy shifts associated with Donald Trump's political actions and rhetoric.

Gold and Investment Demand

The discussion highlights a significant shift in gold's perception, moving from a niche asset to a more mainstream consideration. Historically, global average allocation to gold has been around 2%, but it recently stood at half a percent. This suggests a potential for a fourfold increase in investment demand if allocation reverts to its historical mean. Anecdotal evidence, such as increased mentions of gold by financial media personalities and interviewers, supports this trend. While central bank buying provides a durable source of demand, it's not consistently predictable month-to-month. The speaker emphasizes that the move away from the dollar, even if it remains the primary reserve currency, is a one-way trend.

Gold Market Dynamics and Cautionary Notes

Despite a bullish outlook for gold, the speaker, Lobo Tigra, cautions against unchecked optimism. He notes that while gold may reach $4,000, potentially leading to $5,000 and beyond, this parabolic rise could also trigger profit-taking. He stresses that no asset goes straight up forever, referencing the 1970s bull run which included a significant 50% correction. Tigra advocates for a strategy like his "upside maximizer" (akin to trailing stops) to protect gains, emphasizing that "nobody goes broke taking profits." He distinguishes between bullion, which he views as insurance, and gold stocks, which he is currently not actively buying due to their rapid ascent.

Historical Parallels and Differences

Comparing the current gold market to the 1970s, Tigra acknowledges similarities like OPEC's influence and the general inflationary environment. However, a key difference is that in the 1970s, the dollar was pegged to gold until 1971, creating a "coiled spring effect" when the peg was removed. This price control aspect is absent in the current market. He also draws parallels to 2011, where strong arguments for gold's ascent did not prevent a subsequent five-year bear market. Tigra prefers steady progress over parabolic moves, believing it contributes to market longevity.

Silver's Performance and Market Signals

The speaker notes that silver is beginning to catch up to gold, which he considers a potentially concerning signal. Historically, silver lags gold in bull markets and then significantly outperforms towards the end. If silver is now accelerating, it could indicate that a market top might be approaching, though he doesn't predict a specific timeline.

Bullion as Insurance vs. Stocks

Tigra views bullion (gold and silver) as insurance rather than a speculative investment. He argues that one doesn't question the cost of fire insurance when the risk is high. In a world with geopolitical tensions, trade wars, and fiscal profligacy, he sees significant "smoke, tinder, and sparks," making insurance (bullion) a prudent choice. He is not currently buying gold or silver stocks, preferring to "buy the dip" rather than chase momentum. He suggests looking for market fluctuations to enter these positions.

Copper: A Durable Bull Market

Tigra expresses strong conviction in a durable bull market for copper, seeing current price action as merely the beginning. He identifies several fundamental drivers:

• Inflationary Trends: Global inflationary pressures, driven by US policy, European rearmament, and Russia's war, are inherently bullish for commodities.
• Electrification and AI: The global shift towards electric vehicles and the growth of AI data centers are creating massive demand for copper, often referred to as the "new oil."
• Supply Constraints: Unlike oil, copper supply is significantly constrained. Discoveries are scarce, the future pipeline is dry, and permitting processes are extremely difficult globally, even with potential government tailwinds.
• Critical Mineral Status: Copper's recognition as a critical mineral by governments, including the US, further bolsters its importance.

He anticipates near-term volatility due to potential "Trump shocks" and economic fears, which he views as buying opportunities. Tigra believes copper has the potential for a multi-year, if not multi-decade, bull market.

Uranium: A Nuclear Renaissance

The thesis for uranium is also bullish, driven by supply constraints and a burgeoning demand from a global "nuclear renaissance."

• Supply Constraints: Despite high prices, bringing new uranium production online has proven difficult and time-consuming, with even major producers adjusting their ramp-up expectations. This indicates that supply will remain constrained.
• Demand Surge: China is significantly expanding its nuclear reactor fleet, and the US has reversed its stance on nuclear power. Japan and Europe are also increasing their reliance on nuclear energy.

Tigra sees this as a highly bullish macro environment. However, he notes that uranium stocks are not cheap due to the obviousness of the bull case. He is waiting for a meaningful correction to enter larger positions, viewing a 20-25% drop in uranium stocks as a potential buying opportunity, especially if negativity sets in. He contrasts this with copper, where he anticipates larger potential drawdowns due to economic fears.

Trade Wars and Export Bans

Tigra advises against speculating on commodities subject to export bans, such as antimony or tungsten. While these can lead to short-term price spikes, he considers them "tradable" rather than "investable" due to the opacity of these smaller markets. The duration and extent of such surges are unpredictable, and a single new mine discovery or a geopolitical shift (e.g., a thaw in US-China relations) could cause prices to crater without warning. He prefers to watch these from the sidelines as a disciplined value speculator.

Oil and Gas: Sidelines for Now

Tigra is currently on the sidelines regarding oil and gas. While acknowledging arguments about capital starvation in the industry, he is uncertain how this will play out against potential gluts and the "Doomberg thesis" (which suggests considering barrels of oil equivalent, not just oil). He is concerned about near-term oil prices due to OPEC ramping up supply and the discretionary nature of oil demand, which can be impacted by stagflationary economic conditions. He would only consider investing if he sees a clear trend of rising oil prices driven by genuine, persistent supply constraints, emphasizing an empirical, data-driven decision rather than logical arguments.

Stagflationary Macro Outlook

Tigra's macro outlook is stagflationary, characterized by high inflation and a weakening economy. He attributes this to the lingering consequences of COVID-19 lockdowns and the potential economic disruption from "Trump shock." He points to deteriorating labor market data, such as negative ADP prints and revisions, as evidence of economic weakness, despite low unemployment rates which he attributes to a "COVID hangover." He notes that inflation, while down from its peak, is above the Fed's target and trending upwards, further supporting his stagflationary thesis. He believes Federal Reserve Chair Jerome Powell is caught between these opposing forces.

The Independent Speculator

Tigra promotes his free weekly digest at independent-speculator.com, offering insights into his thinking. He also provides paid services for due diligence. He reiterates his approach as a "value speculator," emphasizing the need for a compelling value proposition before making any investment.