Copper – New paradigm or history repeating itself?

Are the world’s copper resources truly tapped or was copper in a speculation boom like never seen before?

The chart below tracks copper prices for the last 40 years. A speck in the big scheme of things, but let’s go with what we have :) .


The trend followers have made a fortune in copper since 2005. The recent price action suggests the trend may be over.

If I were to lend my opinion to copper, I would say that copper bulls could be in for a world of hurt. If a top is in, it may be one that lasts a long while as well.

To me, the most telling signal that the run may be over is the giagantasoraus, premium laden purchase of local (Phoenix Copper giant Phelps Dodge (PD), which Freeport McMoran has made a bid. The bid comes after about a 1000 percent run since 2003.

The metal mania makes the web 2.0 nerds talk of a bubble because SPOOGE.COM raised $1.5 million from venture capitalists for a hamster social network seem a tad self absorbed and sheltered!

Excuse me for asking, but what the hell were the copper analysts doing in 2003. What the hell is Freeport Management’s and bankers thinking is the upside here. Do they know something about the world’s copper supply and housing boom and China that they did not know in 2003?

That’s rhetorical. It is NO.

EGO’s, FEAR and FEE’s!

I wish my MBA professors would have showed me some of this when I was in school. These long term charts and the news and price stories surrounding spikes teach you more about business and investing than any textbook could.

No wonder Rodney’s great “Back to School” was such a hit. One of my fave lines ever from Rodney in respnse to his assanine professor’s world of Widgets ” Who’s gonna pay the teamsters?”

This is classic top of the market behavior in copper the commodity, the bankers and management of an industry in a strong bullish trend. I have no positions in the stocks mentioned, but should have been long Phelps Dodge going into this merger bid. Most trend followers were – without inside information.

This is a merger worth watching. I will.


  1. Mr Angry says:

    There was a hilarious story in Australia about the increase in copper theft because of high prices, culminating in the theft of copper overhead wiring from a suburban train line.

    How stupid are these thieves? They could have been electrocuted (they got lucky). They could have been hit by a train (they got luck again). They were totaly exposed and in the open while stealing (they got lucky yet again – nobody saw them). And it would be blindingly obvious when they tried to sell it (it was and they were busted).

  2. Mike says:

    Oh, you finally noticed copper has been rising. I got out back in May, before the dip, but with China and India booming, demand will stay strong through 2010 – IMHO.

    Something to watch for sure.

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