The high tech revolution and new economy are creating boundless new applications for two commodities that will dominate the 2020s: copper and helium, said Gianni Kovacevic, CEO of CopperBank.
Kovacevic referred to a trade in these commodities as ideal for the contrarian investor.
“Let’s call today’s interview the contrarian’s delight. I believe a lot of these tried and tested metrics are going to break down and they are breaking down,” he said.
One such metric is the oil to gold ratio.
“Traditionally, if you look over the last 30 or 40 years, it took 16 or 20 barrels of oil to buy one ounce of gold. Today, as we speak, it’s about 42, 43 barrels of oil to buy one ounce of gold,” he said.
Kovacevic remains long-term bullish on gold and said that “gold going through $2,000 an ounce is not an ‘if’ but a ‘when’ question.”
On copper, investors can bet on a shortage of the commodity, Kovacevic noted.
“Running out of a commodity does not matter until it matters, and then it matters a lot. When this unholy alliance breaks down and that’s when you actually have a shortage, the businesses doing well – those that are going to feed into that trillion dollars a year of stimulus – inevitably, you’ll have to see an increase in copper prices and that’s where the contrarian in every investor will have to be aware of this,” he said.
Additionally, helium is a commodity that has stayed under investors’ radars but is about to take center stage in mainstream financial news due to its use by tech companies, Kovacevic said.
“I love helium because it’s been taken up by big tech. It’s a secret component that very few people understand. These server farms that are the size of huge buildings, full of these servers and computers that run very hot, they’re using helium as a super coolant, so the demand for helium has been growing six, seven, eight percent per year and there’s nobody that has been exploring for helium,” he said.
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