Three things you need to know today…

1) Volatility is back!

One fund manager came out this week and said this is the most volatile earnings season he’s seen in 22 years.

It’s sure been a humdinger. Some of my positions have soared…and a few tanked.

When volatility goes higher, one comfort is knowing what kind of cash flows are coming in the door.

And there ain’t no better sector right now than gold. Case in point is West African Resources [ASX:WAF].

I’m highlighting this one because they released their 2024 numbers this morning.

They produced 206,000 ounces of gold. It cost them about US$1250 per ounce to get it out of the ground. Their selling price was about double this.

Cue AU$246 million in sweet, sweet profit. The stock hit an all-time high yesterday.

Even better for them, they have another mine in the works, which means in future years they’ll be producing more gold for more profit if today’s prices hold or go higher.

WAF comes with high sovereign risk. But there’s no doubt it’s minting money at the current gold price.

Of course, gold could come down. But right now, you can shrug off the volatility concerns because there’s so much money flowing through the gold sector.

The market will be supportive until something comes along to derail the case for gold, and gold stocks.

That doesn’t look like happening anytime soon.

Gold stocks continue to be a strong sector and demonstrated that again this week when so much else is selling down.

Got gold exposure? You should.

2) There’s another reason gold stands out…

While gold is pressing towards new highs, some other commodities are slumping. Coal prices are at four-year lows, reports Bloomberg.

Oil is falling. Iron ore is back under US$100 a tonne.

I made the case a few weeks ago that iron ore could be a contrarian trade to take if it could keep pushing up. The idea is fizzling out fast, if not dead already.

There just isn’t the explosive mix of factors in play that you need for a big trade in any of these.

I’m not saying there’s no long-term opportunity here. But you need the patience of a saint to consider them.

Take lithium.

It has all the signs of a commodity bear market. That’s low prices, mines shutting down and expansion plans deferred.

In theory, these factors are sowing the seed for the next bull run.

I tabled the idea late last year to start watching for a turnaround. (And I meant watch, not do anything.)

Now look at a chart of Pilbara Minerals [ASX:PLS]…

Slow Road to Nowhere

Not much to get excited about there.

Now, it may be that the case for lithium comes back. In fact, I’m sure it will at some point.

But timing is everything in commodities…and lithium’s time is not yet.

3) Tesla isn’t helping the case for lithium either…

This year I’ve found myself with an unexpected hobby. It’s following Tesla, despite not really needing to.

Tesla stock surged in the wake of Donald Trump’s election victory. CEO Elon Musk has the ear of the new President.

What he doesn’t have is customers lining up to buy his cars in the same way as he did a few years ago. Sales are falling in Europe.

The models are looking somewhat stale. And China’s BYD offers similar features at a lower price point.

This is all problematic when your stock trades on a P/E of 130x.

However, Tesla has a second ‘Trump’ card to play. It’s the rollout of the Optimus robot, due next year. This could be an extraordinary second division for Tesla.

What’s even more incredible is Elon Musk has that in play, PLUS X.com and SpaceX…two giant, separate companies.

It’s one of the most amazing, promising collection of assets in world history.

While Tesla is giving Musk some headaches, his SpaceX firm could be one of the biggest IPOs ever.

Even more amazing, it could take Musk toward mining space, possibly with his own robots.

It’s a privilege to see it play out in real-time.

Don’t forget our latest service, Altucher’s Investment Network Australia is covering everything you need to know about Musk’s industrial and innovation pioneering…including the firms that could benefit from his every move.

We only made it available last week.

Check it out here.

Best wishes,

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

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Murray’s Chart of the Day
— Silver

By Murray Dawes, Thursday, 06 March 2025

Silver has been underperforming gold over the last year.

Gold has rallied 20% since May last year but silver remains at the same level it was trading at then.

I think we are close to seeing silver play some catch-up.

The technical picture is compelling as I have been showing you in recent Closing Bells.

Silver is in a long-term uptrend. If the price can head above US$35 soon the odds of a sharp rally to the sell zone at US$40-45 increases.

Fundamentally, silver is seeing demand outstrip supply with vault stocks worldwide in retreat over the last couple of years.

Rising industrial demand — especially in solar panels, EVs, and electronics — continues to outpace supply, with global silver production struggling to keep up.

Regards,

Murray Dawes,
Editor, Retirement Trader and Fat Tail Microcaps