The buzz from all the news articles last week was about how all the analysts are bullish about the price of copper going forward. Here's a sample quote:
"Macquarie Bank analyst Adam Roley said copper prices could rise next year, with the market set to remain 'very tight' as growth in mine supply fails to keep up with ongoing demand growth from China."
But... I'm looking at the LME inventory numbers which are rising every day. Already this year, Nickel and Zinc have each gone through a spell where inventories stopped falling and started rising and it wasn't pretty for metal prices or for Nickel and Zinc mining stocks.
Until today, copper prices have been rising even while copper inventories have also been rising. That's unusual. Today prices fell, as you'd expect with rising inventories. So, I'm lightening up on my copper mining stocks, beginning with the more liquid of those stocks.
I expect that I'll continue to lighten up, day by day, as long as the copper inventories levels keep rising. That is what I did with Nickel earlier this year and it saved me much grief. I did some of the same with Zinc this summer, but not as much as I should have because I considered my Zinc mining stocks to be too illiquid to trade out of. To avoid this I'm trying keep my positions in microcap stocks small enough. By "small enough", I mean either so that I could afford to lose all the money in the stock or small enough that I could exit over the course of a few days.
This lightening up has resulted in me being completely invested, but completely off margin. So, I guess you could say I have some "dry powder" should we get hit with a significant correction. Here's my holdings now, by metal: