Last Wednesday through Friday, we held our third annual Legacy Investment Summit.
About 350 of your fellow Legacy Research readers made the trip to be with us at the Mandarin Oriental hotel in Washington, D.C.
I (Chris Lowe) chatted with a diamond trader… a real-estate seminar entrepreneur… an ER doctor… a professional musician… an oil industry executive… a trucker… the CEO of a truck dealership… a property developer… and the head of a $40 million dollar-a-year family ice cream business… among a bunch of other subscribers.
They came from different backgrounds… hailed from different cities, countries, and even continents… and had different levels of investing experience.
But they all had open minds, a hunger for big ideas, and a distrust of mainstream views.
They also either already achieved financial freedom (one subscriber told me he made $3 million on Teeka Tiwari’s crypto recommendations)… or have set their sights on becoming financially free.
And thanks to these conversations, I came away from the Summit knowing a lot more about the world than when I arrived. I also had a blast at the cocktail receptions… wine tastings… and lunches.
It was a pleasure to meet you.
And if you didn’t make it this year, don’t worry. I’ll give you a heads up in these pages when registration opens for next year’s event.
Plus, this week, I’ll share with you some of the most important insights from the event.
We’ll cover everything from artificial intelligence and the future of automation to the sectors that will profit from permanent economic distortion.
But the biggest takeaway from the event, at least from an investing perspective, is that we’re at the start of a commodities boom for the ages.
The ESG trend has already put supply under pressure.
That stands for “environmental, social, and governance.” It’s a catch-all term for sustainable investing.
Investors – especially younger ones – are starting to screen potential investments for their impacts on the world. Mostly, that means figuring out the impact companies have on the environment… and trying to mitigate any damage.
For instance, in May 2021, activist investors forced Royal Dutch Shell (SHEL), Chevron (CVX), and ExxonMobile (XOM) to curb oil production.
Governments are also getting involved.
The Biden administration, for example, has delayed decisions on new oil and gas drilling on federal land. The president has also canceled leases for copper and nickel mining to protect wilderness areas.
These supply problems worsened with the onset of the pandemic.
Supply chains broke down because people were sick and couldn’t work… or because governments issued stay-at-home orders.
This time, it’s from the economic sanctions the U.S. and its allies slapped on Russia.
In recent years, Russia has been the world’s largest exporter of natural gas… the second-largest exporter of crude oil… and the third-largest exporter of coal.
But after it invaded Ukraine, the U.S. and its allies dropped Russia from the mainstream economic system almost overnight.
And it’s not hard to see that this is bullish for commodities prices. That’s just how markets work.
Prices are the result of when supply meets demand. So unless demand drops with it, falling supply will push up prices.
Our commodities investing expert, Dave Forest, discussed this in a presentation at the Summit on Thursday.
Dave is a professional geologist, mining entrepreneur, and ace natural resource speculator.
And he hammered on how commodities can keep you safe during inflation.
Remember, inflation isn’t just about rising prices of goods and services… it’s also about the falling value of a currency.
It costs next to nothing to produce new dollars. Banks lend them into existence. Or the federal government spends them into existence. So the supply of dollars is theoretically infinite.
That makes the dollar prone to inflation. The more dollars there are in circulation, the less each one is worth.
Commodities, by contrast, are “hard assets.” It takes real-world inputs such as energy and labor to get oil, nickel, iron ore, silver, gold, and so on out of the ground. And there’s only so much of each on Earth.
So as Dave showed, they’re great inflation hedges.
You can see it in this chart of the Invesco DB Commodity Index Tracking Fund (DBC).
It tracks prices of 14 of the most heavily traded commodities. These include crude oil, natural gas, gold, silver, aluminum, copper, corn, and wheat.
As you can see, shares in DBC have more than doubled since the spring of 2020. That’s right around when COVID-19 hit the U.S.
They then went parabolic when Russia invaded Ukraine in February.
And as commodities supply remains under pressure from environmentalists and broken supply chains… and demand rises from investors seeking protection from inflation… this bull market has a long way to run.
It’s his term for hard assets that are essential for the world’s most exciting new technologies.
For instance, you need lithium, nickel, and cobalt for the rechargeable batteries that power electric vehicles (EVs). Without these metals, the batteries can’t hold a charge.
Meantime, the average EV needs about 186 pounds of copper to make all the wiring that brings electricity around the car.
You’ll also find these metals in the batteries of every smartphone, tablet, and computer in the world. We need them even in a range of high-tech military tools such as ballistic missiles, fighter jets, and drones.
Here’s how Dave summed it up in his presentation…
Commodities investing isn’t everybody’s thing. It’s a little out there. It’s a little old school. But my team and I have taken the commodities theme and expanded it to tap into the biggest trends on the planet.
This is the fusion of commodities with tech trends like the rollout of EVs. And it’s the perfect investment for our time. When we started looking into hard tech, inflation wasn’t a worry… the stock market was headed relentlessly higher… everything was fine. Now we have rising inflation… rising stock market volatility… and a lot more worries about geopolitics.
And hard tech gives you not only the phenomenal upside of tech trends, but also protection from inflation. Because we’re still talking about commodities, which go up in a rising inflationary environment like the one we’re in today.
Don’t just take it from Dave.
Look at the price of lithium, for example.
It’s up 638% over the past two years.
I know because I spoke with him on one of the on-stage panels I hosted at the Summit.
You likely know Teeka as our blockchain expert… and the guy who’s delivered quadruple-digit… even quintuple-digit… gains on crypto.
But he ran his own hedge fund before joining Legacy. And he’s one of the most insightful macro thinkers I know.
Here’s what he told the audience in D.C. about the commodities boom he sees ahead…
This decade, we’ll see more tech adoption than we’ve ever seen. And we’ll see more versions of tech than we’ve ever seen. But we’ll also see an explosion in demand for base metals… and other commodities.
I predict that over the next three years, at one of these events, the most popular person will be Dave. If you talk to people about commodities right now, their eyes glaze over. But it’s obvious to me that we’re in the very early stage of a commodities boom.
This is an idea you’ll hear a lot about from Dave, Teeka, me… and the rest of the Legacy Research team over the coming weeks and months.
But now is the time position yourself to profit.
I won’t reveal any of Dave’s hard-tech stock recommendations out of respect to his subscribers.
But I’ll repeat the recommendation he’s been making in these pages – the Global X Lithium & Battery Tech ETF (LIT).
This exchange-traded fund (ETF) isn’t a pure play on the lithium mining sector. It owns shares in companies involved in the lithium supply chain – from mining to battery production.
But it’s a great way to pick up exposure to the hard-tech rally.
LIT is up 141% since I first put it on your radar in these pages in October 2018. But if Dave is right, that’s just the start of an even more powerful upsurge.
Until tomorrow,
Chris Lowe
April 4, 2022