Heap and Tonks believe the "copper price is bottoming, and will move sharply higher in 2009 and 2010." The analysts defined what they mean by sharp, raising their 2009 price forecast from $3.50 to $5.00, and their 2010 forecast from $3.00 to $5.50. These are huge adjustments
1. I don't think citigroup(or motley fool) are consistent enough even to bet against-nevertheless- 2 they have a point(not necessarily near term, but, certainly for the mid to foreseeable long term) 3 power generation is a pressing problem-South Africa, Bolivia, and China(to name a few) are all rationing power by allocating between industrial and consumer uses. 4 Vietnam, Indonesia, India, China(again, to name a few), are all in early stages of a consumption revolution-there is a bright future for the consumer durables 5 if oil stays high, add alternative energy to the list, if it comes back down, be assured, the consumption in the near and far east will be strengthened(as well as in the west).
This may sound wierd, but the west is going to move to electric cars. This will begin in 2011 but will continue from that point onward. $4/gallon gasoline in the US will guarantee this will happen.
Therefore, we will, in five years have litterally millions of electric cars being produced. All of these will have electric motors and batteries. All connected with copper. Homes and workplaces will have millions of new charging stations, all built with copper. So, I think that a big copper demand is going to come from the developed west as well as the developing countries.
We just are not going to see this until 2010 and it will accelerate through 2020.
It will build in 2010 but the market is thinking forward. In my opinion these good news will start to play in copper stock by 4 Q of 2008 and 2009. Copper stock is on fire sale now especially the cash cow PCU. If we wait it might be too late. The safest stock to accumulate now is PCU because the dividends will keep afloat. The only problem is my stupid broker is telling me when PCU becomes 70% of the portfolio the margin jumps from 30% to 50% so I have to buy some of the other copper stock to keep PCU below 70% (69%). I like FCX and BHP.