This Metal Is Set To Explode Not Gold Or Silver

This metal is set to explode and no, it's not gold, it is not silver. Everyone's arguing about gold being overextended, whether they missed silver, whether it's manipulated, whether AI is a bubble. And meanwhile, there is something physical that is tightening underneath the market that almost nobody is watching. So by the end of this video, you'd understand exactly what this metal is, why it's structurally different from any other commodity. And I'll give you my three-step framework for positioning yourself without chasing hype. My name is Felix Perrine. I'm an ex-investor in Bangalore. It's Winston back there, our metals specialist. And we've seen how the market works from the inside. And we've also founded the GOAT Academy, where my retired Wall Street mentors teach regular investors institutional strategies. We've taught well over 20,000 students in the last six years. I'm also the co-founder of Trademission.io, where we have access to an insane level of data. And our mission here is very simple, is to spread the institutional knowledge and patterns and rules and pass them on to you so you can have more fun. So the metal we're talking about is, drumroll, it is copper. Now, before you run away thinking copper, let me ask you something. What do AI data centers, electric vehicles, every defense system in the world, and the entire US power grid have in common? What do you think is behind your light switch? And they all need a lot of it. Now, most retail investors don't understand this because they think commodities work like tech stocks. Prices go up, supply goes up, problem solved. That's true in software. If you build something cool, like ChatGPT came out, right? I actually think it's a fairly evil piece of equipment, but it came out and then Claude came out and then Brock came out and then hundreds of others of these things sprouted up. But in geology, you can't really do that. You can't download copper from the cloud. So let me give you some numbers that should wake you up. JP Morgan is forecasting copper prices to hit $12,500 this year. Not any time this year, but by the second quarter of this year. Now, is that therefore definitely going to happen? I don't know. You see, I mean, JP Morgan, pretty powerful, pretty good connection to the top, it seems. But no, this isn't financial advice. I'm not a registered financial advisor. I'm just telling you the research and the patterns and the rules that I've been taught by my mentors. There is an organization called the International Copper Study Group. I know, exciting. Get yourself that subscription. You know you want it. And they're saying that the market is going to shift from surplus, as in too much copper, to a deficit, as in we haven't got enough of that stuff. That deficit is going to be 150,000 tons, which seems like a lot. Bloomberg is warning we're entering a structural deficit, not a temporary one, a structural one. You see, the data center chaps, they are going to build data centers no matter what copper costs, because they're like, we need this. We need more chatbots. We need more immediate, you know, girls in bikinis dancing generated by AI. That's essential. If you look at the data, and we have a copper dashboard in our community there, obviously we have some gold and silver and so on, but it shows you the demand growing, supply growing very, very slowly. And then if you look at the price history, yes, it's accelerated, but actually maybe not as much as you might think. So it explains kind of the whole thesis of where it's coming from, where it's going. Inventory statuses on Comex and in London, and they're pretty low. And then also, how do we invest in that? So you want to check that out. There's a link down below. It's like $6 a week or something. We like to make institutional data very, very affordable and very available. And we also explain what this actually all means. So check it out down below if you want to get more into this. Copper is unique because it has price impact. Think about it this way. I think you're going to spend $5 billion to build a data center, you know, some great big shed with a roof, amazing drawing, right? I should be an artist. What if copper goes up 20%? Are you going to cancel your $5 billion data center that you have a contract with Microsoft with? No, you're not. You're just going to pay. And the same thing is if you're a Tesla and you're building one of these, again, this is clearly exactly what a Tesla looks like. Well, if it costs you an extra $100 in copper, you're still going to build the car, right? If you're the U.S. military and, you know, you build these things, that is meant to be a rocket, rather timely right now, you don't give a hoot what this thing costs. You just want more of them faster. You're going to pay whatever it takes for copper. And that is very unusual. Now, maybe you're thinking, OK, interesting thesis, but why isn't the media talking about copper? If you're wondering that, put the copper down below in the comments, because I'd like to see how many of you are starting to connect the dots here, because you see gold and silver, they get all the attention. It's very unfair because they are shiny. They're sexy. And people like to panic by them when the world is ending. Copper is what you need when you're actually building something. And guess what? The world is trying to build everything at once. And for the last 40 plus years, what have we all been told to buy? We've been told to buy financial assets, stocks, real estate, bonds. And during that time, commodities were starved of money. And this has been going on for so long that as all the money was flowing here and very, very little of it was flowing into mining and exploration and paying geologists, and that meant very, very little mining and exploration happened. In fact, there are not even very many geologists being trained because he wants to do a job that doesn't pay any money. Because apparently, we should all invest in software, right? And this has created a setup that happens very rarely, about every 50 years. Commodity bull markets do not do this. No, commodity bull markets look like that. And then they start to break out and then they potentially go parabolic. Very long dormancy, sudden repricing. And then we tend to hold on to this for quite a long period of time. Copper spent most of the last decade hanging around between $2 and $4 per ounce, sorry, per pound. It's trading just under $6 and it was breaking out above $6. And that's because demand is colliding with decades of underinvestment. Now, whenever it does that, people say, oh, it's temporary. Don't get involved. It's risky and all that kind of stuff. And yes, it's risky. I'm telling you that too. The reality is there isn't that much more mining. In fact, there was a fatal mudslide at Grasberg. This is a word you might want to write down. You might want to hear a bit more about that in about six months' time on mainstream media. That's the second largest copper mine in the world. Shut down 70% of their production until the middle of the year. There is severe flooding in Congo at a mine called Kamuakakula, which sounds like a great song. Peru is politically a little wobbly. There are challenges at the Chile mines. And JP Morgan says that their supply is falling down 1.4% than their previous estimates. Now, 1.4% doesn't sound like a lot, but this is half a million tons. Think about how many wires and cables and things that are. Now, maybe you're thinking, okay, maybe I need to understand these kind of market patterns better. Maybe I need to understand how these markets work better. Well, come and join our metals community there. There are also a ton of stock features in there, by the way. Stock scanners and all that kind of good stuff. Say you wanted to look into one of the biggest copper miners out there, FCX. You just type FCX into the search bar here, and it tells you very quickly this is actually a decent business. Margins, return on capital, cash flow. Do they have a lot of debt? And it gives you a very quick snapshot, not the be-all end-all to your research, but it's certainly a pretty good beginning. And it's that kind of data that we make available to you. But I want to explain to you why copper is different from our friends gold and silver that most people know more about right now. And let me know if this is useful for you, by the way. Put a useful down below in the comments, and I understand this is landing then. And so I'm going to give you a three-pillar framework. Pillar one is AI, the AI infrastructure explosion. Pillar dos is the electric vehicle multiplier. And then pillar three is the grid rebuild. And each of these alone would be important, but together they're creating a trifold bottleneck that the supplier literally cannot fix quickly. So let's talk pillar number one, AI, specifically AI infrastructure, data centers, the kind that are housing NVIDIA's latest systems. They can use up to 50,000 tons of copper per facility. Now, a regular data center was like 5,000. So this is a massive 10x increase in demand for... And our friends at J.P. Morgan, who always have the little investor in mind when they put out their data, J.P. Morgan are saying that data center installations could account for about 500,000 tons of copper demand this year alone. That is a global increase of 5x of copper demand. It's needed for wiring, for the cooling systems, for the transformers, for bringing the power in, right? Well, if you think that's bullish for tech stocks, wait until you see what that does for the metal that makes the tech possible. We're essentially a step below the tech that we're normally talking about here. Then we talk about EVs, and I know they're a little bit less popular right now, but let me show you this. A traditional car uses about 50 pounds, it's about a lump of sugar. I mean, not lump of sugar, well, maybe in the U.S., bag of sugar, of good old copper. An EV car, so a gas guzzler, I should have probably written gas guzzler rather than EV. How much do you think is in there? Give it a guess, 180 pounds. That's like 3 to 4x what is usually in a car. And then, of course, you have the charging infrastructure. Charging infrastructure is thought to require about an additional 1 million tons of copper by 2040. And if you were to replace every ICE vehicle with an EV vehicle, according to the University of Michigan, that would need more copper than has ever been extracted from the ground in human history. But I'm sure it'll be just fine. I'm sure there won't be a deficit. How many of you are driving an EV or own an EV, a Tesla or something? Put EV in the comments down below. Let's see it. Let's see a vote there. And then pillar number three, we have the grid. And it's not sexiest when nobody talks about it, but the grid is sort of showing its age. It needs a facelift. 31% of infrastructure is near or past its lifespan. So we're just going to say it's old. It needs to be replaced. 46% of the distribution infrastructure is the same, needs to be replaced. The US of A needs to build 5,000 miles, I could spell miles, of this. What are those? Well, add one of these underneath it, and you get the idea, right? Transmission lines. An artist in residence. And that literally would require hundreds of thousands of additional tons of copper per year. So global copper demand for power generation and transmission lines is going to go to the roof. Pardon my French. Where did that come from, Winston? I'm probably going to swear on this channel. The US of A produces 870,000 tons a year from mines. It produces about another 850,000 tons a year from recycling. Can anybody add that together? What is that? 1.72 million tons. That is production. How much do you think the US needs? The US needs 2.5 million tons per year. And that is what is a deficit. And that likely means copper prices go up. A 30% supply gap. Now, most people think, oh, it's fine. Someone's just going to open another mine, aren't they? They're just going to dig it out of the ground. Well, copper is fundamentally different from other investments. Mining doesn't work like software or data centers. You can't just scale up copper production because copper prices have gone up. It is going to typically take 17 to 18 years to bring a copper mine online. Crazy, right? Now, maybe you thought that was crazy, but that is in the world. Now, in the US, things are a little bit crazier. In the US, it typically takes 29 years to bring a copper mine online. So, 29 years to open one new mine. So, if you opened a mine today, it would impact supply until... When would it impact supply? Sometime in the 2040s, right? Why? Discovery, it's permitting, it's infrastructure, environmental approvals. You know, every frog and toad and bird and insect is going to complain about it. You need financing, you need construction. And people know this, so people don't want to finance it because it just seems like a loony bin of investments, right? The other problem is that when you dig out a great big rock, this is a rock, special rock. I am a rock. Now, how much copper is in that? Well, there are little bits. There's a bit here, there's a bit there, there's a little bit here, there's a little bit there. New rocks being taken out of the ground, they have less copper in them, or copper of poorer quality. So, new discoveries are rarer. They're also lower underground and there's less copper in them. Gold and silver investing is, generally speaking, fear. Copper investing and copper demand is when the world is building stuff. Right now, the world is building the biggest change in how we live with AI, robots, data centers, automations, and all of that needs and prices could double. This rock is still the same rock, still no easier to get it out of the ground. Now, how does copper pricing really work? Three phases to that, in my humble opinion. Phase number one is the breakout. So, you get this lull, you break out of the lull. That is your breakout. So, you basically move above this very long-term sideways action, right? Now, headlines will usually say it's speculative, it's temporary, you know, it's spiked, it's scarily risky now. And then you get phase two, which is institutions moving in on this thing. Let me show you a chart here. This is a copper miner ETF. It's called COPX. And what do you see? You see a chart that was doing absolutely bugger all, going sideways, started breaking out in September. The same time, volume spiked, which is institutions doing their thing. And from that moment, from that Wall Street rule of pattern recognition, copper is up 72% in the last 129 trading days, right? Every dip was an opportunity along the way there, by the way. Again, I'm not telling you what to buy. I'm just saying. Then the third phase, which is what nobody really understands, is the miners get repriced. Why do the miners get repriced? Miners have fixed costs. Let's say it costs a miner $3 to get a pound of copper out of the ground. So, if the price of copper is $4, what do they make? They make $1 profit, right? Now, if the price of copper goes to $6, what happens? They make $3 profit. So, their profits have gone up 3x, even though the price of copper only went up half an x, 50%. Do you get the idea? So, there is leverage essentially built into miners, and their profits double or triple or quadruple. And that's why these copper guys are going nuts. I'm not going to run through every copper miner out there. I've just put in some of the biggest ones out there. There are others. If you want to dive into those deeper, again, put it down below in the comments. Just write miners in the comments, and I'll be happy to do that. Let me tell you one thing, and this is actually advice, right? I always say I don't give advice. I'm going to give advice. You are not going all in on copper or copper miners, right? You're forbidden from doing that. Winston says, don't do it. We're not assuming copper prices are going to go up in a straight line because they will be volatile. Copper can move 30% in a bad quarter, easy. Mining stocks can move 50%, easy. We've seen it many times. So, risk management matters more than some sort of STD-like conviction. This is not financial advice. For most investors, an ETF is the cleanest and easiest approach. There are a couple of them out there. There is COPX, for example, 40 different copper mining companies in there, relatively affordable. There are some others. I'll put them down below in the community already. Now, if you want pure copper exposure and you don't want to buy futures because that scares you, then there is an ETF that tracks copper futures and that is called CPER. That is basically futures without having to understand futures. Now, that costs 1.06% in fees. So, someone's making money out of your not knowingness. So, you don't want to hold that for too long because that's a ridiculous amount. And then you want to think about how much exposure you have. I'm not saying you should buy copper. I'm just saying if you are going to buy some, don't make a reckless allocation. Generally speaking, I would stick to 5% to maximum 15% of portfolio. It's generally a pretty good rule for almost anything you want to invest in. Portfolio. If you want to invest in miners, make those positions small. I would generally say 1% to 3% because what we do is we get some exposure. Tilt into it an idea. We don't gamble and put everything on it because stuff could go wrong, right? There could be a massive recession. Someone could come up with another metal that is just better and cheaper. And maybe all the AI data centers get cancelled and we all go back to smoke signals. Now, if you have some copper exposure already, you're thinking about it, put the ticker symbol in the chat or the multiple ticker symbols in the chat that you have exposure to. Be curious to see what our community here is investing. And if you still think gold and silver is still the better play, again, let me know down below in the comments because it'd be interesting to see your POV there. But even if you strip away all the AI hype, the grid is aging. Electrification is happening no matter who's in power, all countries, defense budgets are rising and the commodity under investment has lasted 40 years. So copper doesn't really need a crisis. It just needs a continuation of what we're already seeing. We don't need inflation. We just don't need massive new investments. So it's just a rebuild and rebuild needs copper. Gold and to some extent silver thrive on fear, thrive on inflation. Why do I start inflation with an F? Do you ever do that? Does your brain do that? It sort of starts halfway into a word. Copper happens when you build. It happens when you electrify. And right now we're electrifying faster than we ever have in the history of humankind. So if you got some value out of this video, do me a favor, share it with somebody else. That's really all I ask. And if you want to go deeper, you want to understand copper on a deeper level, join the community down below as well. And let's see if Winston has any final insight. Winston, Winston, this is our metals analyst who's sleeping very sweetly and soundly because you went on a big hike this morning, didn't you, Winston? We say thank you for watching and wish you a beautiful year.