Three things you need to know today…

1) It’s always the stories that nobody is watching that are the most compelling.

The headlines scream tariffs and trade wars on China and Canada.

What is Elon Musk doing?

Getting his Starlink business into India!

Look at this from CNN…

‘Elon Musk has secured a major win in India by signing two back-to-back deals to bring SpaceX’s Starlink satellite internet services to the country.

‘The country’s top telecoms provider Reliance Jio, owned by Indian billionaire Mukesh Ambani, said on Wednesday it had inked a deal with SpaceX.’

This is a genius move.

India is the world’s most populous country. It will likely stay that way for the next century.

More importantly, hundreds of millions of Indians don’t have access to fixed broadband.

Starlink could bring internet to all of them if it can meet them on price.

It would be an extraordinary boon for the Indian economy if so.

A rising India is also great for the world because it offsets some of the weakness coming out of China.

More importantly for you and me, think of what this story means for what our US tech guru James Altucher has been saying in recent weeks about the potential Starlink IPO.

This could be the biggest of all time if it happens. What is Musk doing by pushing into India?

Dangling a huge growth carrot for the stock in front of the market to help the IPO launch.

If you thought Starlink was compelling last week, it’s on its way to becoming a bigger beast now. It might even eclipse Tesla for impact.

Do make sure you check out James’s presentation here.

Everything in the orbit of the Starlink business is primed to shine.

There are 1.5 billion people in India. It’s a gigantic market. And Elon Musk is moving to own it.

Genius move, indeed!

2) I’m going to channel my inner Sherlock Holmes at you right now…

Do you know the famous dialogue in the following scene?

Gregory (Scotland Yard detective): ‘Is there any other point to which you would wish to draw my attention?’

Holmes: ‘To the curious incident of the dog in the night-time.’

Gregory: ‘The dog did nothing in the night-time.’

Holmes: ‘That was the curious incident.’

We have our ‘dog’ in today’s market acting curiously.

It’s called copper.

Despite tumbling stock markets, Trump tantrums and all the fears of recession…copper — key industrial metal — is conspicuously NOT going down.

Check it out over the last six months…

‘Dr Copper’ is said to have a PhD in economics. He goes up when he likes what he sees around the world.

But do we have another explanation?

It’s this. Defence spending is at record levels worldwide.

And the copper outlook just got a boost when the Germans came out and said they’re planning a 500-billion-euro infrastructure fund, especially for revamping the military.

They’re going to break the shackles of their own debt rules to make this happen.

I’ve been in this gig a long time.

I remember when Germany simply would not budge on these debt brakes, certainly for Greece when the eurozone crisis flared over a decade ago. (About half of Greek pensioners sank below the poverty line.)

How times have changed.

We know China’s military spending is growing too. China is second only to the USA, and it’s going to grow for decades.

All in all, it’s hard not to be bullish on copper over the medium term.

I asked my colleague James Cooper, a geologist and mining analyst, for his thoughts. He told me…

‘War and inflated copper prices go hand-in-hand. That’s because this metal is used across munitions and other military hardware.

‘So, how could this relate to the recent move?

‘Well, Trump threatened to abandon NATO last week. That sent the Europeans into a flurry, for the first time Uncle Sam is NOT offering guaranteed protection.

‘That means there’s a very real urgency for the EU to increase defence spending.

‘Last week Germany made verbal commitments along those lines stating it take whatever steps necessary to be “the backbone of defence in Europe”. So, who knows, maybe this is another aspect to copper’s recent rally.

‘Truth is it’ll probably take months before we know. By then stocks will have already priced in the bullish development.

‘That’s why investors should be moving on copper stock now, before those “reasons” start to surface.’

In January, I recommended a ripping copper stock to readers of my advisory Australian Small-Cap Investigator.

You can see that here. I’m super pumped for this one. I’m not sure I’ll have a better idea all year.

3) One more thing on copper…

Copper is important for electric cars. While Tesla may be under the pump, China’s BYD is ready to storm the world. Exports are booming.

It’s hard not to see a repeat of the Japanese experience here.

Japan’s low-cost and reliable cars captured the world market in the 1970s…and are still going strong today. They beat the Americans through innovation.

Trump’s tariffs will make American cars less competitive in overseas markets once the retaliations start hitting.

US market veteran Jim Rogers said it best years ago when Trump came to power the first time.

Tariffs will ‘Make China Great Again’.

Since Trump apparently has no knowledge of history, Americans will find this out the hard way.

He’s already bleeding US farmers who are now losing market share and income to Brazil.

But hey, the Gulf of Mexico is now called the Gulf of America. That’s pretty cool for Americans, right?

Best wishes,

Callum Newman,
Editor, Small-Cap Systems and Australian Small-Cap Investigator

***

Murray’s Chart of the Day
— Fortescue [ASX:FMG]

By Murray Dawes, Thursday, 13 March 2025

Don’t catch the falling knife

It can be tempting to buy a stock that has fallen a long way. Especially if it is a former market darling that you had been wishing you bought years ago.

I sent out a warning in Closing Bell in May last year to say that I thought iron ore was about to get hammered. Fortescue [ASX:FMG] was trading around $24.50 at the time, and I said it would fall to at least $20 and perhaps lower.

Today FMG is trading below $16, so the question has to be asked — is it time to buy?

FMG is trending down quite sharply, so I think it is best to wait until there are signs that the downtrend may be over first.

There is a major low set in late 2021 near $14. I reckon there will be plenty of stop losses lined up beneath that level.

If iron ore falls below US$100/t again and general market conditions continue to deteriorate, FMG could test the waters below that key $14 level.

A panicked period of selling after that level is broken could take the price all the way down to $10 or so.

I would start licking my lips if that happened and then I received a buy signal.

Regards,

Murray Dawes,
Editor, Retirement Trader and Fat Tail Microcaps