They're at it again
By Andrew Mickey
The hedge funds are making their move. The $1.1 trillion in fast money controlled by the ultra-secretive hedge funds is eyeing its next target. After successfully driving up corn, silver, gold, molybdenum and uranium prices, the hedge funds are eyeing their next target.
According to Daniel McConvey of New York-based commodity trading adviser Rossport Investments, “There are a lot more people in the metals business, and people are looking for unexplored, unsaturated markets.”
That means minor metals like cobalt and molybdenum. Keith Dunleavy, a trader at London firm Stratton Metals, whose firm has personally sold raw cobalt to hedge funds, says, “[Hedge Funds] expect cobalt prices to rise well beyond their current 11-year highs above $30 per lb.”
And you know what? They’re probably right. They’re almost always right. Hedge funds have successfully driven up prices for many different commodities over the past few years and then move onto something new, in large part because of the demand they create themselves. Now, it’s looking like they’re quietly buying up already limited cobalt supplies.
The cobalt market is already too tight right now to handle this demand, which is already running past supply at about a 10% clip just in 2007… and it’s only going to get worse in 2008. Now, with the hedge funds moving in, cobalt is looking even more enticing. That’s a big reason why cobalt hit a new all-time high of $33 per pound last week. Credit Suisse is calling for $40 cobalt.
From an investor’s perspective, it’s a little unrealistic to purchase a few tons of cobalt to profit from the rising cobalt prices. That’s why it’s best to find a cobalt company.
And one is quietly working its way into becoming a major cobalt producer. Yesterday, the company took a giant step forward in filling the supply/demand gap for cobalt.
You see, a cobalt miner would be almost ecstatic with an 80% recovery rate of cobalt. After all, it’s almost impossible to get every pound of cobalt out of a ton of ore. However, my top cobalt play just announced they achieved an astounding 95% recovery rate! Needless to say, that is downright amazing, and it’s why this company is going to be able to retrieve cobalt for a mere 96 cents per pound.
Right now, this company is aggressively acquiring the financing required to unlock its massive cobalt reserves. Once it does, you can bet this stock is going to be a surefire winner. And the hedge funds moving into cobalt are just going to add to the potential of this play. But there’s a lot more to the story and you can learn all about it here.
That’s all for now,
Andrew Mickey
Founder, Small-Cap Commodity Prospector
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