If It Ain’t Broke, Don’t Fix It

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The information contained herein is accurate to the best of the author’s knowledge, but the material and interpretations contained herein should be independently verified by any party using this information as part of any research, editorial, or decision making process. Any views expressed here represent the author’s opinion only, and as such readers should do their own research and come to their own conclusions if they are using the opinions contained herein as part of any larger due diligence process. The author may have long or short positions in the companies mentioned and may be buying or selling in the market depending on which way the wind is blowing at any given moment. Opinions are subject to change without notice. Prospective resources, predictions, comparisons, financial projections, and extrapolated metrics are, by their nature, subjective and interpretation dependent. The topics covered are highly speculative and involve a high degree of uncertainty and risk. Speculative companies can and do go to zero. By using this site, you agree that the author(s) and Hydra Capital is/are not responsible for any damages incurred by the use of the presented materials. Anyone reading these blog posts should know that they are the author’s thoughts and opinions, which are not to be confused with or construed as research reports.

Disclosure: The following represents my opinions only. I am not receiving any compensation for writing this article, nor does Hydra Capital have any business relationship with companies mentioned in this post. I am long AOI.V, CCE.V, CRE.V, EMM.V, FIL.TO, FOM.V, HBM.TO, NAN.V, NICU.V, NPK.TO, NPR.V, NSE.V, NXE.TO, NETZ.C, POE.V, RPX.V, STRR.V, SPC.V, SURG.V, TAO.V, TNZ.V, U.UN.TO, VLE.TO, XYZ.V, and YGR.TO (Image credit to Lukas Tennie on Unsplash)

Last year I decided to take a cue from the Chinese zodiac and plowed ahead like an ox through the fields of energy and materials… and a lot good things were turned up. So much happened last year that I can’t even try to recap it, but for me, if there was main a theme for 2021, “energy” was probably it. Having been left for dead, energy stocks staged remarkable comebacks, showering faithful investors with triple-digit returns in the process, while the market recognized just how cheap they had become. Coal, uranium, copper and lithium also presented some big wins with what felt like relative ease; with the latter two showing the power of the electrification theme. Gold was a tougher place to be (though not without its big wins) and fertilizer was a stealth winner — Nutrien is over $90 as I write this. Nickel is in a stealth bull market, trading at over $10/lb currently (a 10-year high), while zinc still seems to be the Rodney Dangerfield of base metals despite being at 5-year highs. They say diamonds are forever, and while the stocks of most diamond companies have had terrible years (just look at Mountain Province (MPVD.TO, last at $0.75) and Lucara (LUC.TO, last at $0.58)), rough diamond prices are (also) at ten year highs … hmmm. Also in the things-that-make-you-go-hmmm category, I haven’t heard many people talking about the rare-earth-element sector lately… something that almost no one thinks about, but is critical to the world’s electric-motor-driven future. All in all, from my perch, “stuff stocks” felt the best they have for years, but broad investor sentiment is still tepid at best. Decisions, decisions. You never want to stay at the party too long, but it hardly feels like anyone is swinging from the rafters, so could it be that things are just warming up?

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