It is obvious that we are in a recession, the question is whether this is inflationary or deflationary. The bankruptcies are deflationary, the massive QE's are inflationary. One asset that will do well in both environments is cash.
Platinum, palladium and rhodium have all been moving higher and I expect them to go higher as China is loading more palladium and rhodium in their vehicles. China vehicle sales have rebounded as well. Both palladium and rhodium are in deficit. Platinum is going to be used in 3-way catalysts , which will boost platinum prices. Sibanye-Stillwater expects platinum to reach $2000 per ounce in 2025. Sibanye-Stillwater has exposure to all of these metals. SBSW's production numbers were very good. SBSW's EBITDA was $922 million in Q3 2020. This translates to $3.7 billion EBITDA per year. With a 5 multiple, SBSW should be valued at $18 billion market cap. So there is 50% upside. The company has no net debt. Net earnings were $1 billion per year in 2020, but is expected to rise 66% on higher rhodium/platinum prices and higher production numbers. Earnings per share are expected to be at $3.52 per share, which gives Sibanye-Stillwater a P/E of 4.8 which is very cheap. On top of thi...
The Potemkin Villages were Russian constructions, created to deceive others into thinking something is better than it really is. The Potemkin Rally describes how the Federal Reserve is manipulating the market in order to create a deception of a rising stock market. It looks like the economy is improving, but it's actually just a mirage. As long as the following chart (stocks divided by Fed Balance Sheet) stays flat, the stock market rally is really engineered by the Federal Reserve. If the Federal Reserve takes the punch bowl away, everything collapses. I read about a very unusual correlation at Zerohedge . Apparently, there is a similarity between the employment to population ratio (red graph) and the Potemkin Rally (blue graph). (The Potemkin Rally graph measures the ratio between the stock market and the Fed's Balance Sheet.) There are implications if this correlation is true. It means that when the U.S. government prints money (otherwise known as QE), t...
Comments
Post a Comment