Lately i have changed my investment outlook to one of supply and demand over trading profits. When the market was at it lows in March i loaded up with Maquarie Bank at any price under $20 AUS, which given at the time it was the only investment bank in the world not going bankrupt or bleeding money or in many cases both! It also managed to secure an AUS government backed AAA rating for it's borrowing, which if you thought about it meant it could borrow at the worlds lowest rates and lend to companies in trouble at loan shark rates. One month later the shares had more than doubled.
After having a bit of a think and doing some research i noticed a few things, China are buying massive amounts of copper, even from a domestic point of view, China are buying uranium, and are planning multiple nuclear reactors, and China are buying loads of gold for their reserves.
In April/May i started to look into the mining sector, as it was becomming apparent that China was hoarding commodities, especially from Australia. On further study i found China could not get enough copper, so in we went, shares in Equinox, which has a large deposit, around 30 years supply, plus some uranium mixed in. Shares in OZ minerals, another fantastic copper play, and a few speculative stocks for good measure. One that stands out particularly is a company named EXCO resources which has a large unmined copper resource and a gold deposit.
So this is where i stand at present, invested in Copper, with Uranium as a side business, and some small and medium gold stocks, like GOLD ONE for example. This may seem a rather small play on the wider markets, but when you look at the lack of copper mines comming online in the next 5 years, the tight supply of uranium, and the inflation play for gold, i think this is where you need to be. I see no point in being in multiple commodities that may or may not pick up steam going forward. I want what people want NOW, and what they will want even MORE of going forward.
It may take a few years for this to all play out, but im certain that investing in Commodities with supply issues and strong demand, in strong companies, in the mining sector, in Australia, is the way to go. As for banks and real estate shares i realy could not care less, im betting on China and if the rest of the world just happens to come along for the ride somewhere down the line then all the better.