Title: Metals Bull Market is Just Getting Started (Gold, Copper, & Uranium) | Jérémie Boyer | Aurelion
Show: Other People's Money — The Monetary Matters Network (YouTube; host Maxi)
Guest: Jérémie Boyer (co-founder, Aurelion Research)
Date: 2026-SEP-20
URL: https://youtu.be/1Lylw0Anyxk
Length: 1:12:18
Note: YouTube auto-transcript. Fillers (um/uh, contentless "you know"/"like") and stutters/false starts removed; wording otherwise verbatim (the guest is a non-native English speaker, so the grammar is his). Obvious speech-recognition mishearings of names corrected: Jeremy Voyet -> Jérémie Boyer, Ansman/onsman -> Huntsman, Land Bridge/Landbridge -> LandBridge, DPL -> TPL, lumenum light / Lumantum -> Lumentum, free port -> Freeport, Catrini -> Citrini, DEH SHA / the shot -> D.E. Shaw, hormuse/armos/our moves/poor muse/form moves -> Hormuz, Car Island -> Kharg Island, Aranian -> Aurelion, Birkshshire -> Berkshire, and context-certain mishearings "decoupled from all price" -> "oil price", "corporate company/jurisdiction" -> "copper", "destriction" -> "destruction", "dart fleet" -> "dark fleet", "ara" -> "urea". "uranium taker UA" (1:00:53) left as heard — the ticker cannot be determined. Sponsor reads (Plutus) kept for completeness. (00:00)-(00:25) is the cold-open teaser (a clip of the closing summary).
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(00:00) We're pretty much bullish on gold. I think decoupled from oil price. This is what maybe the confirmation we were waiting for to become bullish again on gold. As we saw since maybe August and so far September, there's been a huge spike in you would have or central banks of like China buying physical on copper.
(00:25) It's something maybe that we see more long term. I think the story was already good and now with AI it's just become even better and I think that funds are getting in. Lumentum, the company, it's a big company, the head of our girl, we asked her about is copper a risk for your company because you need to be supplied about it and she came out with yeah I think copper has a lot of more room to go to the upside and we were like okay so even the person at big companies like this of photonics are talking about copper.
(01:03) >> This episode is brought to you by Plutus. Later on, you'll hear more about how Plutus is bringing model portfolios from research providers like Citrini, HFI Research, Aurelion, Lrub, AP Research, and Elliot Capital to your self-custody brokerage account. Let's get into today's interview. Welcome back to Other People's Money.
(01:20) I am Maxi and I'm joined today by Jérémie Boyer, co-founder of Aurelion Research. Jérémie, thank you so much for joining me today. Hi Max, thank you for having me. >> So Aurelion is one of the great independent research providers out there on Substack. You guys are very cross asset, but it would be wrong for me not to say that you specialize in commodities and commodities have been a major story in 2026.
(01:47) certainly taking the reins it feels like from AI in the back half of the year as inflation and fiscal concerns and all of these things have continued to spiral along with a Hormuz crisis that just won't end. So Jérémie I know you just wrote a piece about your commodity outlook. You gave a strong view on five commodities.
(02:10) I want to start with your strongest view. What is your most high conviction belief in the commodity complex right now? >> This is kind of easy, but maybe the safest one would be gold. I think I don't see how it won't go back to like 5k USD an ounce. I think we saw that back once or happened, it was inversely trading with oil.
(02:39) So as long as oil was going up, gold was crashing. But in July or something like that, recently we saw it decoupled from oil and that's exactly what we were waiting for, that's why we became bullish and recently we wrote about it and I think we were really right and now we don't see how it would stop.
(03:08) So, it would be the most bullish one. I think it's getting a little tricky at the Fed, but I think that we saw recently it was one of the biggest inflows from ETFs and funds that are okay, am I missing the train or the boat? I need to get in the gold because every day you have gold up 2% which never really happens.
(03:30) And so if you kind of miss this and the mining are up like 30% in a month and you are a fund and you are not and the clients, they just call you and you're like what are you doing you know so that's that >> everything put together and we also have China that is pretty important and we saw that they bought like six, I think it's 66 tonnes out of 100 from all the global central bank buying of gold.
(04:01) So the, on China last month >> yeah in, well this is in June >> in June. Okay. So in June they bought >> but we don't always have the most recent data. So that's from Goldman Sachs, usually pretty accurate but yeah that, when I saw this I was like okay it's getting really, you know, it's good movement.
(04:24) Well, let's go back to that period when gold cooled off because I think a lot of people they think, oh, inflation is picking up. That is going to be a positive driver for gold. And certainly over the long run, debasement inflation is the core driver of gold prices moving up. But I think one of the things that's counterintuitive to a lot of people who aren't tracking it is the way that gold and real interest rates interact.
(04:47) And so you had a period of time when inflation in the short term looked like it was picking up and that rates were going to have to come up, but inflation expectations, right, were kind of still stuck in that 2.5% range. And so when you have the expectation that rates are going to rise, but inflation expectations aren't really going up with it, that's a scenario where real rates are going up, and that can be a short-term pressure for gold.
(05:18) As well you saw out of the rest of Asia, India is a huge buyer of gold for investment demand and they actually because of their energy uncertainty started slowing down on their gold purchases and actually asking their citizens to stop buying gold. Those things have not necessarily gone away at this point.
(05:41) Why do you think we've decoupled from those forces at this point in time? Well, it's interesting because in the article that we published recently, I speak about rates and real rates, Fed and everything but actually I think in the past usually gold it pretty much works with okay we're going to hike, we're going to cut, but recently maybe in the past two years we had so many conflicts and geopolitics that to be really honest, I don't always even look at the rates to check gold. You
(06:21) know, it's important, it's part of the story, but maybe it's just like 30% of it. So, there would be, okay, you have China. If it is China in the room or not, then you check the box, you know, and then you saw in July there was Japan huge intervention of gold color option, the demand is surging.
(06:43) So you have an indicative just there, you have China, so there's a lot of factors and the more there's fears in geopolitics it can even play maybe not bigger but maybe even role on that rates in the past you know so I think gold is pretty interesting as we go forward, it evolves and it's something interesting because you could think sometimes we see that maybe the old school guys analysts and they look at gold, they look at oil and they were like oh okay in the past we saw that when
(07:20) the Fed is buying or cutting and there's QT and everything but actually when you look at it right now it's always different so I think that there is more to it. We try not to be that proud at Aurelion so if next month there's Hormuz is reopened, fears is gone, maybe the Fed cut or something, maybe we would become neutral and not overly bullish, you know. So, we're always open to it.
(07:50) We're not sticky with our view. >> And on top of that, you do just have that move away from treasuries that's happening that as you said, it goes back to 2022, right? It goes back to Russia, the seizing of Russian assets. Since then, that's when the China central bank buying really accelerated.
(08:13) Them saying, "Hey, not that there is a conflict imminent with the US, but certainly we're not on friendly terms right now. Maybe we should make a change in how we do our reserves." And that was the Biden administration at that point in time. It wasn't even the Trump administration. So, and now you have an even more perhaps antagonistic administration in there with the rest of the world and it has somewhat moved beyond traditional adversaries like China to other nations talking about it.
(08:44) I mean, do you see that switch in reserves just continuing to be a driver for gold in your long-term view? >> We didn't look at it on a huge long term. So, maybe it was more, we're not short-term guys. We're not traders at all, but we're trying always to look at maybe six months to one year.
(09:09) So after this, I think it becomes predictions and we're not big prediction guys. We see gold going higher this year and what happens in two years or after it's not something we're looking at as of now. >> Okay. >> So I want to ask about sizing for it. So, you have your model portfolio that you publish as part of your research.
(09:31) And that portfolio is up over 38% year-to-date and over 130% since inception back in July of 2025. It's been a great time for commodities. How much of your model portfolio is in commodities? And when you make an upgrade to a more bullish call for gold like this, how much of your model portfolio is made up by gold? And is it something where you're just taking exposure to the metal like via a GLD or futures or do you go down to miners and other sorts of ways to get exposure?
(10:12) >> Usually we would have long only equities. So we don't do any options or ETFs. We had a lot in the past of mining and I think we played it really really well before all of this downside played out. We kind of went out of every commodity, not commodities, every mining, way out actually. So this was a really good call on our end and right now we kind of are going back in.
(10:43) So we have two uranium positions, companies, stocks, we have one copper company, we are going to add one or two gold but we don't have as of now a big position in gold but we always work like this, we might be bullish but it doesn't mean we already have the position you know >> understood >> but it doesn't mean we don't on it.
(11:13) But it's all about timing and when we see that because gold is going up, it's going up, but you need to pick the right company and we can't look at everything at the same time even if we try to. So we have maybe 10 companies on the look and maybe next week we add one, you know.
(11:37) So, but we all do really know pretty much what we're going to buy, but we already have a company that is a great copper producer that is like 60% copper but also 40% gold. So we're already exposed and usually we would have like a 5% weight but it's not always indicative of how bullish we are.
(12:08) Sometimes, you know, it's not because we are overly bullish gold that we would have like 20% of the portfolio in it because we know that things can change fast and that maybe it's more careful to have maybe five, maybe 7% of the portfolio in gold miners. >> Okay. Now, I'm sure it was just at the beginning of the year, gold miners had run so much over 2025, and we got just some pretty obvious signs of speculative excess, whether you're looking at silver markets or gold markets, January was clearly like
(12:46) speculative fervor at that point in time. Is that what you saw that got you out of miners? And then, as we sit here right now, I'm sure some people are invested in miners. They're up almost like 40% off of the year-to-date lows in the last let's call it month or so.
(13:05) So how do you think about managing that speculative interest and timing your mining bets >> since we are always, it doesn't mean we are not always in mining. I think you said before, oh what's the weighting in commodities, but there's a lot of commodities and something we do, we don't think we could be 40% of the entire portfolio in commodities and we wouldn't be like okay we are overly exposed because they don't all play together you know, they don't all depend of each other. Maybe right now I think we are at like 25% of
(13:44) commodities maybe or 30 and usually we try to be below 50%. But we would have like 10% in shipping. We would have like 15 in mining. We're thinking maybe of adding a critical minerals play because we're seeing, it will probably be a US one because right now with the new tariffs with Canada and Trump we think okay the play that we did like 100% last year in upside return.
(14:22) We think it's time again with new tariffs to get it back. So, you know, we're always looking a bit at everything and we already have, it's kind of having cards that are ready to play and when it's time to play our cards, we just pull them out and we pull the trigger.
(14:42) So, we would have a company that we already like for critical minerals, we would add it because we don't know that it's going to happen, but once it's happened with the tariffs, we add it. And same thing for gold. It's been like two months we're looking at gold miners and they were like okay once it's time, and we feel that we don't need to be the most early every time.
(15:07) Maybe right now we're not the earliest you know, it's already been running a lot. Maybe it's already up 40% most miners. But if there's 50 more% or sorry 100% more, maybe it's a risk-reward of, sometimes we even cut our winners some people would say too fast. But we always think that the rest of the returns at the end once you're close to exit a position is the most risky.
(15:43) So we think about our investors and our subscribers as well. It's not even our own. So, you know, we're trying to avoid, and that's something interesting because one reason we're popular, I think there's really low volatility in the Aurelion index and it's something we're trying to keep up a lot and we put a lot of risk and we really look at sizing, timing and not being maybe over hyped to kind of avoid having too much exposure to something or being wrong at the one time.
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(17:46) This endorsement is delivered as part of the podcast or other audio program produced by promoter and does not constitute investment advice or recommendation that any particular advisory arrangement is suitable for you. Now let's kick back to the interview. I mean just looking at the chart of the index year to date there are a lot of people who were overweight gold coming into January and they've since because of that 40% move that we saw in miners they're up 25 something like that percent now but it has been a roller coaster getting
(18:11) here, you guys very close to your high water mark all throughout the year and actually made new highs back in August and you're just a few percent below as we see >> we're close, we're close >> yeah you're looking at it. It's within spitting distance, that's for sure.
(18:29) But I want to switch then because in your piece that you published, it wasn't just all bullish commodities. You actually put, I would argue, maybe some contrarian views out there on commodities. Fertilizer and oil have been really strong this year. Obviously, with the disruption of the Strait of Hormuz, you came out and said you're bearish on both of those commodities.
(18:52) Is this because you see an end to the conflict or are there other factors at play that have you thinking it's time to get out of fertilizer and oil? >> Maybe more on oil. I think fertilizer, we're not overly bearish. I think we're just bearish because we don't think there is enough data, not data, but enough confirmation to say, okay, I can be extremely bullish and like 80% confident that I will be right.
(19:25) So when it's like this, we look at it this way, we're like, okay, so maybe we don't need to be, maybe we're neutral. And then we look at the other data and you're like okay so maybe what happens if Hormuz reopens fast, okay so fertilizer would come down. What happens if oil goes back, because in commodities it's really tricky because if you have a view on a certain commodity it will probably affect the other one, not always, but if you're bearish oil like we are you can't go out in public and say Oh yes, I'm really overly bullish fertilizer because
(20:06) fertilizers are kind of complex. So it's not each of them that rely on oil price but there's a link to it. So if you're bearish on oil, we can't really be at the same time bullish on fertilizers, you know, it will be contradictory. So maybe for fertilizer, I would answer it that way. For oil.
(20:30) I think we have a bit more conviction. A couple months ago when it started and everything there was a lot of momentum in oil, they went to above 110 and everything and we were maybe one of the only where we were very vocal about it's getting too high, there's too much noise. And it seems like everyone is forgetting about China.
(21:02) And on my personal account, I was saying that, okay, but don't forget about China. That could be demand destruction that you don't see yet. And everyone was saying you're stupid, you're saying that there's demand destruction, but it only happens at like, I'm not stupid. I know that it only happens at 150 and above.
(21:26) You know, consumer won't stop paying gas if they can still pay it, but the destruction can be shaped in multiple ways and when you have maybe one of the biggest players like China that is just cutting on imports, and that's something since we called it has really really happened, they just continue to import much less oil and it's something we were fairly much maybe one of the first to say on our platforms, that they will rely on something else and it happens, it was coal, because maybe I think right now we could be still minimally bullish
(22:10) on oil but we think the market is kind of adapting to the situation you know, it's getting so long you can't be having a hope that it will open next week because we just don't know. So maybe the market is adapting itself and we think that as the big players like China, maybe the consumer also, we saw that consumer spending is pretty weak in China, much less oil.
(22:41) So once you cut them out of the equation, maybe already you need less oil. There's also a big driver in, usually the big oil bulls would post, they are really good at posting charts, selective charts I call them, and it would say okay there is a lot of SPR release, the US has less oil in inventories and they will add it with their bullish argument that okay on Hormuz we're seeing that there's very little transit of tankers and oil is not moving as it used to but it's not really true because you would have
(23:26) because we're seeing right now, and this is accurate data, rising oil inventories right now so this means that we don't have the entire answers when we look at the data of oil in transit so there is for sure more tankers that are moving and there's the dark fleet.
(23:49) There's a lot of stuff going on. Maybe Iran has more pipeline than we know. What do we know? You know, so there's a lot more oil at all time that is moving than what we can see on the data and it's something that maybe people forget a lot about. >> What about just the escalation potential? I mean we re-escalated. People thought we had seen the other side.
(24:14) I mean, we are back in somewhat of a hot conflict at this point in time, but to take it to the next level of escalation would be pretty serious. I mean, how much of it is just the risk-reward on that where you look at it and say we're kind of at a top of a local range in oil. What do I think is more likely, the Trump administration to start walking out peace talks again and messaging de-escalation or boots on the ground trying to take Kharg Island? When you think about those types of possibilities, does that factor
(24:50) at all into it? Because we have seen as oil picks up, they walk out de-escalation talk. Is that still a predictable pattern that you think traders can rely on? >> The first time we were really right. Well, it was my own call, but it was the Aurelion call, but I actually said in my first article when oil, before it goes all back to like 70, that there would be a, it was a bet on my end and there was multiple factors like China and everything.
(25:26) But I thought that from maybe discussion with shipping CEOs and everything that there could be a deal. It was not a real deal. Actually, we saw it, but there could be a deal way faster than people thought and it took only two weeks after the post and I looked like a genius that time, but I was not really.
(25:47) I was just, you know, >> speculating, >> lucky and right. And you know sometimes it's like this, when it's unknown you kind of need to go with your feeling and I was right and right now I think like you mentioned I would say the only thing that would maybe put us bullish and not bearish on oil would be if there's boots on the ground of US soldiers in Iran, would be a major thing because it's all talks, it's okay we send a, okay cool but it happens every day. But if there's a real boat that is in front and they put
(26:27) soldiers on the field and there's maybe two US soldiers that are dead. Usually two is like 1000 for, 1k for the US. So I would say this would shift our view I would say but it's nothing that happened. So it's an argument of people right now that would be bullish and they're saying yeah but what if, you know, if you are always relying on what if maybe you're taking a big chance >> the first time we saw oil spike up there was so much talk about the closure of
(27:03) the Strait of Hormuz but I think it's become very clear that some of that premium was due to the fact that they were attacking energy infrastructure in the region and that semi-permanent damage. The long period of time it takes to make those repairs is what drove prices higher. We haven't seen as much risk to that infrastructure.
(27:28) If we started to see those missiles flying not just at bases, at ships, but at permanent energy infrastructure, would that get you bullish again? >> Probably. But it takes time. You see when this happened and they hit a lot of chemicals facilities and petroleum stuff. We were actually bullish chemicals because there's a lot of petrochemicals and you know everything is in everything with oil, so actually we had a company, it's called Huntsman, and we were really bullish on it and it's funny because we were up
(28:09) 40%. and they started hitting and everything and the price of probably profiland [unclear] or something in English, it's hard for me this one, but it spiked, it goes up when oil goes up because there's a lot of oil in this chemical and so companies like Huntsman they raise pricing and they do more revenues, they have a better quarter, but what happens is that we had a discussion with people, companies that are in construction and everything, and they actually said okay but this price you can't pass it on to us, we
(28:48) won't be able to raise this price so from our understanding we went out, we just removed Huntsman and since then it's down like 40%. So we're really right and I think it's the same thing with oil. Right now you would have a lot of people with oil that think okay there's a lot of conflicts, Hormuz is closed, but is there more to it maybe. I just think that right now it's all speculation and like you said if it's all about speculation why would you be bullish? It's like betting on a big
(29:26) AI IPO that might happen. But we are not really, as a firm and research, we're trying to rely on what we see. And right now what we see is that okay the inventories are dropping, there's a lot of risk but as of maybe next three months and six months we don't see that we're lacking oil and wherever it comes from, if it comes from China, that point, India that might buy from Russia more than before, if there's enough oil and the demand supply is fine the price won't go up as much as the IP would want to you know
(30:08) >> what about the refined products and the refining complex, that has been one of the strongest trades this year. The refiners have really done well. Crack spreads were near 10-year highs, very recently in the last month or so. Do you think that that trend is sustainable? And maybe could we talk about positioning? I'm sure it's similar to gold where you're not taking a position in the commodity ETFs themselves, but looking at companies that are exposed to these commodity prices.
(30:42) >> To be honest, we don't really have any refiners right now. Maybe we missed this trade. It happens, we don't win them all. But I would say that right now there's also, with the US it's called combats with US and Canada, they are like okay we need Canada oil, but US would say okay but you need your refiners because you don't have any, but if you need to get the oil from somewhere you know, so I think that refiners can, when I say that we are, I will turn it that way, when I say that we are
(31:22) bearish on oil, it doesn't mean that I'm not bullish on maybe an oil royalty company in Texas that is in the Permian Basin, you know, because there's a level of oil that at a certain price even right now they generate enough with the break even level to have good earnings and be a really good investment.
(31:48) But it doesn't mean that on the commodity itself with oil and refineries or the crack spread that I'm bullish you know. The refiners can do really well on earnings but it doesn't mean that I think it goes, it's always about when I see someone that is overly bullish, I always think on over 120 and you see 150 and 200 and I'm like okay but you're losing your mind you know so I don't say that it can't go to 100, I mean we are close.
(32:17) But what I think is we're not going maybe over 120. >> Okay. >> But can 110 happen? For sure. If there's something that happens, they hit 10 tankers tomorrow. I'm not a predictor. I don't know. But I think that as of now if nothing that we can predict happens, yes the crack spread can continue and probably the refiners can generate money but you know there's also a limit of what you can, you know if companies that buy your oil from the refiners say you know it's getting a bit pricey maybe they
(32:58) can limit yourself and we also saw something that maybe we don't really see here in Canada, but in the US, you're seeing Trump openly call on platforms, I want Chevron or Exxon to drop prices. So sometimes he's pretty conviction and he can be pressurized. So maybe it could have an impact on it. >> Okay.
(33:25) You brought up a royalty company. Are you in general a fan of the royalty model for commodities? And when you're thinking about getting exposure in the commodity complex through equities, do you find yourself falling on royalties more often than not? >> Right now, we don't have a lot of them, but we have one that is in Texas actually, and it's called LandBridge.
(33:55) So we have a position in it just as a disclosure and it's a company that everyone thinks that they do only oil but actually they just rent the right to drill and use the oil, it's actually the water, and that is in the field. So they would, and right now there would be a lot of data centers in Texas and you expect them to sign a contract with Amazon and then it's a Meta and everything and it adds to their earnings that are really really good and they are like 30 people that work there.
(34:31) They have margin of, it's crazy. It's like 99% or 97% gross margin. So it's really crazy margin. So I think usually royalties are amazing business. You have some companies in Canada, it's Topaz Energy which is oil royalties and it's amazing because you just, you land the assets, you buy more fields and land and you have almost no risk because the risk is with the refineries and everything after so it's not really a problem.
(35:08) So, I think royalties are a really safe way. Usually, even with gold, we don't have a position in this company, but there's a company I really like that does gold royalty. So, I would say royalties are pretty much pretty cool business. >> Yeah. >> And it's a lasting business. It's really durable.
(35:31) there's a risk at the end of the duration of, okay you see, it's like there's maybe >> you have asset depletion right, yeah you have these long-lived assets and eventually they do fall off, they have the same problem that the big >> but that's why they buy new land >> arguably that's the same problem that the majors have, whether it's gold majors or on the energy side, they always have to replace these assets that are falling down and the question is, you know, how are the stewards of capital? Are they putting
(36:04) money in at the right time in the cycle into the right projects? But also with refining, you're not the only person who has discovered the magic of royalties. You're not the only person who has discovered the magic of the royalty business. And if you compare a royalty company to a producer, the valuation difference in terms of multiples can be quite stark.
(36:28) So, how, yeah. How do you think about valuing a royalty company versus a producer? Because if you just screen them on pure PE ratios, you're going to say, "Wow, this royalty company is very, very expensive." >> Yeah, it's a good question. There's a company in the US, it's like Texas Pacific something, TPL.
(36:50) It's Texas Pacific Land Trust. Yeah. >> Yeah. These guys are >> Disclosure, I'm a holder, so yeah. >> Okay. I don't blame you, but you know, LandBridge could be a really good one, LB. >> Oh, Jack and I have talked about LandBridge before. >> There's WBI also that is really linked with, yeah. For the multiples I would say it's true what you said because I was looking and trying to convince my partner.
(37:21) Usually when we choose a stock, whenever it's me or him that come up with the new idea, you try to convince the other guy and even yourself if you're not as confident as you want that it's a real buy, you know, and I'm trying to pitch to a non commodity guy which is my partner Léo.
(37:45) Okay, I think there's a lot of upside in a company that is trading at 40 times PE with amazing margins, but free cash flow is fine. And he's like, are you out of your mind or anything? And I'm like, okay, but it used to trade at like 60 times earnings. And he's like, 60 times? Is it an AI company? And I'm like, no, no, no. It's royalties companies.
(38:10) They earn so much, you can trade at a premium because it's less risky, you know, and everything. But actually, that's why we have LandBridge in the portfolio because it's a company that if you compare it to TPL, we think it's not that it's a better operator. Maybe they are even and as good both, but it used to trade when we entered maybe at 20 or PE or 25, but historically it's like 35 and you see TPL is at like 50.
(38:45) So okay, even if it should not be as high there's a lot more room to it. So you kind of need to remove the barriers you have and it's sectoral you know, it's like in banks you look at debt, okay I won't buy this bank because they have 20 billion in debt, okay well it's a bank you know, it's not an AI company, 20 billion debt for a bank, it's not the same thing as with an AI company, so it's kind of the same thing in royalties, if you see a high multiple it doesn't mean that it's a bad one so you need to look at
(39:20) historicals. And usually something we do, we always have a price target. Usually we do a one year. Maybe it's not the most important one. Usually we have a one year, three year and five years. And usually with sell side, they have no time frame or it's a bull, base and bear. If you are at a fund, you look at this, you don't even look at the price target, but you know it's just magic.
(39:49) We don't use any DCFs or anything. Usually we would use a EV, PE or free cash flow and how we do it is we would choose a multiple looking at historicals, comps and everything and we'll be like okay we think it deserves this multiple and looking as we forecast on the next years maybe the multiple will drop so we would lower it but it's something we do that not a lot of research firms do I think, and we choose our multiple, we put it in our model and from that you would have maybe a way more accurate price target we think and
(40:28) usually it's more aligned with the stock price I think because usually if you are at a fund the way they think is not like a sellside DCF, they think okay this company should trade at 20 times PE so if they wanted it to trade, and every fund wanted it at 20 times, share price will rise until it's at 20 times.
(40:54) So that's why we have this target and the 20 times PE is linked with this price target. You hit it and then maybe you need to start delivering or selling your position because maybe it's where it's become too pricey. >> Yeah. Yeah. I know what you mean. And with TPL, I mean that difference.
(41:18) TPL is a bit of a cult. It's been loved for a long time. I was talking to a guy who was a holder and would go to the annual meetings and stuff like that. And his wife >> Berkshire stuff. >> Yeah, I know. His wife called them the Texas Pacific losers. That was all of him and his friends cuz they were so rich.
(41:37) >> Yes. But they were so obsessed with this stock. She was like, "What's up with you guys? All of you and your Texas Pacific losers who love TPL." so much. >> But it's kind of something, maybe before I forget, that could be risky with royalties like this. They tend to have a big private equity ownership.
(41:58) So it's the same thing with LandBridge. It's the same thing with TPL. If a fund like Kinetic >> Horizon, yeah >> Yeah. If they try, I mean they're not stupid. If they cut their position off in one week, it's like sending all their shares, it won't happen you know, but there's a risk of you don't know what they will do with their position and even management, they won't say it, but sometimes they don't even know what they will do, so there's a risk to it, but it also comes with maybe an advantage of it's less volatile because you would have less floating
(42:38) flow, there is less float. So if you have 60% of the company, of the shares, that are not moving, you know, this guy is not selling. So >> yeah. Yeah. Well, I want to turn away from oil because there were two other commodities that you were bullish on there.
(42:56) There stories I think people are probably familiar with, but I want to know why you decided to get bullish on them right now. That's copper and uranium. Why don't we start with uranium actually because it has snuck up on I think a lot of people how much the uranium price has moved. I mean it's a decade old story. I mean multiple decade story that nuclear is going to be a big part of the energy transition.
(43:26) But it seems to run at different points in time. What is it about uranium right now? It's true that you said it's a long story because you would see on X since past 10 years. Well, I'm on X since 2020, so not the past 10 years, but there's guys that create accounts and they're seen as gurus of uranium.
(43:49) I mean, they never sell. They buy every day and they would post that they are buying. So, you kind of need to put this away with uranium. But I think that the real drivers would be the, before the AI maybe trend, well it's not a trend, it's real, but before this started maybe three years ago there was already a bullish case and I did a double with a company that we just re-added to our portfolio.
(44:24) So personally a couple years ago I did a double with a company that is a really good company and I sold out, it went back down and now we're in you know, so there's cycles in uranium but right now, so the cycles back when I was in it was driven, but you can see with uranium that okay if we don't rely on coal and oil and everything maybe in Europe or you know in Canada we're pretty much chill with hydro electricity and everything so we don't really need uranium.
(45:02) US electricity prices are really high so usually they need a bit more uranium, but I mean nuclear, when I say uranium I mean nuclear central, but in Europe we saw that it was really tricky. You would see Germany just, politicians closing brand new nuclear centrals and I thought personally it was stupid and they look stupid and they're trying to reopen them, the new politicians in place, so and you can see it's kind of a backlog of new upcoming construction so you can see that China will build 70 centrals in the next 10 years.
(45:50) France five, UK seven, you know, India a lot. So you can see that we will have a demand that is for sure, you know, if you construct a central and you open it, if you don't want to lose money and it's government, they need to buy the uranium. But one of the things with nuclear reactors is despite the fact that fuel is expensive and the price can be volatile, it's not actually a high percentage of the cost of operating or building these things.
(46:28) And so a lot of people have said that the operators of these reactors don't really seem to care that much about the price. A big part of the narrative is that eventually the operators are going to realize that price is rising and they're going to start stepping into the market and contracting at higher prices, but we haven't really seen these big long-term contracts at higher prices.
(46:52) And the argument is it's because it's really just such a small percentage of the operating cost of a reactor. Have you started to see contracting as part of this? Because you can get speculative movements in the futures price of uranium, but that's not really how this market works.
(47:11) It's kind of like compute, right? They're trying to make compute futures, but right now the big buyers of compute are doing direct contracting. And that's how the market is really settled. >> So, that's a really good question. But even if like you said it's not a big part of the cost, I don't think that's how you need to look at it because at the end of the day if you want to have an open nuclear central, even if it's a small part of the cost, it's not really the cost, it's the supply, can you
(47:46) it's not about the price in itself, I don't think it goes up because, it's more of a supply demand. So of the new centrals. So there will be, because right now it's easy, you sign a five-year deal and every price, the soaring price in uranium because it's spot price, it will go up because you would see that a company signs a deal with a nuclear central in the US.
(48:21) So I will supply you for the next 5 years at this price. So then it sets up a new price for uranium spot for the next buyer. Okay. But if, unlike having one buyer, there's 10 in the next five years that want the same from the same mine, as a producer, you will say, "Okay, I'm just hiking price." You don't care about if it's a high percentage.
(48:53) So I think, but actually it's interesting what you're saying because there's two ways to it and it's something we thought about because in our portfolio we have one of the biggest producers of uranium and we have one company that is a physical buying and holding company of uranium. So this one only moves on physical price.
(49:19) So it doesn't care about your question actually. So and the other one >> is driven maybe more by speculation of this price. So we're playing, we thought about it actually and we're playing on both sides. So I think it's less risky that way and it's something we really thought about. But going back to uranium, I think that's why the last year you saw it almost not floating. You know, it's waving a bit.
(49:46) There's nothing. So there was not a big hype. There was nothing. So when this happens, there's nothing. But you don't really decide. So that's why our timing, we did a uranium primer recently like two months ago or something and it went down after, the price a bit, but now it's just going up up up.
(50:06) So you never really control it. There's less maybe variables around uranium but I think that it's a really long-term story and something that will be hard to go wrong because the contrarians would be, the risk is okay no one is building what they promised they will build. So that's a real risk.
(50:36) But if you remove or minimize this one, you know, there will be 10 times if not more, I'm just making up a number, of nuclear centrals that will need to have uranium coming to produce power. And this was already playing out before the AI wave. Now this needs to accelerate. They need to build them faster, the new central maybe they will build it two years earlier because they need the power now you know.
(51:10) >> Yeah. And it does relate somewhat to the oil story, right? I think every country in the world just got a reminder about their energy sovereignty and what can happen when these supply chains get disrupted. And as you said, China has been able to destroy demand and a big part of that has been their electrification push, solar, nuclear, etc.
(51:35) I mean, they do really tie together. Do you think that this conflict with Hormuz has put even greater wind behind the sails of uranium outside of the longer term trends that everyone has been talking about for a while? It's hard to say but I think it could help and when I think about uranium usually I try to think about maybe India is alone but you would have every Europe country, usually they're kind of like Canada and everything, they need to achieve the goals that they said they will achieve
(52:14) like net zero, green energy and so those will be big buyers, they need to secure like you said this supply of uranium they need and at any cost because once you have uranium, and it's something really, maybe it's an advantage for someone that is investing in uranium, but there's something that someone should not forget, when you have a nuclear central you can't just put on and off the power. It's like it needs to run.
(52:55) It can't just, it's not okay we're closing the refiners today and everyone goes bang, you know, it doesn't work like this. It all raise and that's when it becomes dangerous. So I think that before, the big reason it was going lower was because of fears that were from Chernobyl and everything, but right now I mean we're doing AI robots and everything.
(53:25) I think we can build good centrals at small cost, even there's small reactors right now but with China and everything I think it's just like you said, when there's big events we always learn and big countries learn and okay maybe from now on I will be supplied from coal. Maybe a risk could be people, like you said maybe a bit like oil, okay I will move away, South Korea will say okay in the next five years I want to build 10, maybe I will build only one and I will build five coal centrals instead, so uranium will be in trouble but
(54:15) the thing where it gets tricky is that in Europe they can't really do it because they are kind of green universe, green energy. So they're kind of stuck with uranium which is beautiful in some way for uranium investors. >> All right. Well, I want to close with copper. Copper is like uranium in that the narrative has been around for a while and it shifts, right? It was EVs, it was the ESG trends.
(54:46) Now it's part of, well, we need to build out all of the data centers, we need to revamp the grid for powering all of these data centers. So, is there something just more real about the AI trend now that has you bullish on copper? Is it the confluence of these trends? Tell me why the copper story is real this time.
(55:12) What I really like about, usually I look at steel, aluminium, copper, gold, nickel, you know, most of them. When you look at them, you try to find the big drivers. When you look at the big drivers, you would say, okay, there's rising AI demand. We are in an energy transition and this will be within the deficit.
(55:36) So you look at supply demand, you're like, okay, this won't work out. But usually what I hate is that when you look at supply demand, you would see, okay, but the deficit would only come in 10 years. 10 years is really far away. So I'm not really a big waiting guy. I'm not a trader, but we're pretty much trying to do good returns right now.
(55:59) So with copper, what's interesting is that it kind of doesn't trade along with the other miners. If we put a chart and we look at copper and gold, not that they don't like each other, but they don't really speak together, you know, and that's probably because of AI and everything. But even when AI maybe is less hype or there's more, you will need more copper even if there is maybe less momentum around AI, but a fear maybe I would have with copper would be right now it's kind of becoming, you know, everyone is
(56:45) focusing on memory and GPU and stuff but it seems like everyone is less, they don't speak about data centers as much as before. So copper is pretty much for data centers and everything, okay it's for AI stuff as well but it's pretty much when you construct something, you know, so if you see less data centers maybe it's a risk but over a long term for sure we will need more copper. I think what's interesting, it's a story that is playing out right now you know, we need more copper right now, not just in five years so it's maybe
(57:23) less like uranium, it's less speculation. And that's why you already see a big rise in copper price because it's right now, you know, even our copper forecast, right now the price is like 6.5 USD. Our price target is seven. I could have put eight, but it's for Christmas target.
(57:47) So, you know, I try to be conservative, but I think that it's a market that should keep going. And something interesting with copper maybe, it takes a lot, and it's a bit like with uranium, it takes a lot of time to build a copper mine. So if it needs 10 years to start production, kind of in trouble of needing more copper.
(58:15) So I think that's what is happening right now. You have companies that, okay I need more copper right now. I was surprised but not surprised. You see a company, it's not Nvidia but I forget the name, but a big company in their earnings which are AI company only, memories and everything, they're like yeah we think that maybe copper price can soar even more and it's a risk for us.
(58:41) So, okay, even AI companies. >> So they're starting to disclose it in the footnotes of the company reports, this is a material risk to our profitability, to our revenue growth, all of that. So it's making its way into the disclosures and footnotes. Yes. And even it's funny because I had a call with a company.
(59:05) Well, I'm pretty sure I won't say anything they didn't disclose, but usually they don't say things that they don't disclose, but Lumentum, the company, it's a big photonics company. The IR girl told us that, we asked her about is copper a risk for your company because you need to be supplied about it and she came out with yeah I think copper has a lot of more room to go to the upside and we were like okay so now even the IR person at big companies like this of photonics are
(59:44) talking about copper so you see that it's a real risk because otherwise they would never mention it with investors. So I think it's a really predominant theme and it's something that you don't even need to be in commodities to like copper and it has fuel to the whole story. >> Now what about exposure within copper? I think a lot of institutional investors when they decide it's time to invest in copper they just start throwing money at Freeport.
(1:00:17) That's probably part of the reason it trades at a 36 PE for a major producer. Are you looking at the sort of big-name copper producers or are you looking further down? This is funny because, you know, usually I'm a big looking guy and I don't screen, but when it comes to new ideas or what big funds are buying, I pretty much know what everyone is buying in their 13Fs on the Bloomberg.
(1:00:53) So, I know that they are buying a lot of Freeport, but it's not even a company that I thought of buying at all. I don't think it's a, don't want to hate on them, but I don't think it's a quality producer. I think it's just, it's like if you're a uranium producer, people are bullish on uranium because Musk tweeted uranium and the company, the first one you're looking at, it's called uranium taker UA and they buy it you know, it's almost like, I see it would be the same with Freeport. On our end we have a company that is a really high
(1:01:31) conviction beta copper, it's already up a lot, but it's a company that has exposure to both gold and copper and also zinc and others. So it's interesting, but what is cool about them, there's actually less depreciation on their assets because they spent a lot in recent years on having these mines ready to produce and they were already producing.
(1:02:06) So they acquired in the past assets, and now they change, they are coming in production and why we got in recently, this month or recently, was because when you look at each quarter's earnings the capex is just dropping a lot and they are, I call it the earning phase. Earning phase is really important in mining and right now they will benefit from higher copper price but at the lowest cost.
(1:02:49) So you don't always see a copper producer doing as much free cash flow, and free cash flow is something we think is really important, and the company I compare in my report this company to another one, it's not even Freeport, it's Southern Copper, so really really huge company you know, PE like you said is like 40 but I'm like okay this company is not as profitable as mine.
(1:03:19) Mine is trading at like 17 PE. I'm like, okay, it's a 10 billion company that I chose. The other is like, okay, it's like 200 billion, right? So, it's really crowded. I think the more it's crowded, not less upside, but the less overlooked it is. So I like something that is out there, investable, funds can buy it, but maybe you will get the smarter guys and not the following guys.
(1:03:48) >> It's good. You don't want to go to a stock that is too small for >> but it's institutions to buy because if the whole thing is that this is a big institutional narrative that's going to catch on, they need the liquidity, right? And so those flows, that's part of the reason that the Freeports and the Southern Coppers continue to get flows is because people need that liquidity.
(1:04:10) >> The company that we have under holding that is a copper, and there's something with copper, usually there's more upside when it's a less friendly jurisdiction. But we try to go with something that is safer with upside. So the company has Peru, US and a lot of Canadian producing.
(1:04:40) So probably in my own view would be the three best copper jurisdictions you can have and this is really nice because you have a company, and this one like you said for the funds it's really small for funds like this, but D.E. Shaw, you know, the big big US maybe quant funds or slash, they have 50 million US in it.
(1:05:10) >> Yeah. I mean, despite being probably one of the top performers in the multi-manager space, they don't get as much headlines as Citadel or Millennium or anything like that, but they are >> listening guys. Yeah. And I mean 50 million US position, it's small for them, but depending on which pod it is inside D.E. Shaw, it could be bigger than it looks.
(1:05:38) But I think it's that they, because they could have like 200 stocks. But if they choose that one, I always check and think like this. If there's a really smart PM that decides I want this company instead of a bigger one at a big place like this, maybe he knows something that I don't know or he just thinks the same thing as me and it's a good confirmation usually. Yeah.
(1:06:06) And it's important to remember though with those types of funds that they're often trading in somewhat of a market neutral spread and the third >> and maybe they're already out of it. >> Yeah. But >> yeah, they could already be out. There's a lot of limitations. So, you know, they could be short Freeport or Southern Copper against that.
(1:06:26) And so they're trying to make the difference between those two. They could also own a bunch of foreign, non-US-traded copper producers as well that they have bigger conviction in and it's just not showing up on the 13F. So, important to think about those limitations.
(1:06:44) But Jérémie, we've talked about a number of commodities. Why don't we just sum up the view on all five before I let you go? >> Yes. So I would say right now, of all the five we're pretty much bullish on gold. I think decoupled from oil price. This is what maybe the confirmation we were waiting for to become bullish again on gold.
(1:07:13) For sure there will always be a big, real rates and Fed and liquidity, everything will always be a big driver of gold. But I think that right now there's more to it and the more to it is driving us even more bullish and as we saw since maybe end July, August and so far September there's been a huge spike in either you would have ETFs, funds or central banks like China buying physical gold. On copper,
(1:07:52) it's something maybe that we see more long-term. Gold maybe it's less long, it's more short-term, but on copper I think the story was already good and now with AI it's just become even better and I think that funds are getting in. There's producers that, it takes a long time like many other mining minerals, but having a new copper mine producing takes a lot of time.
(1:08:27) It could be 10, 15 years you know. So you need to prepare these things really years before and right now there's a lot of companies that we see that will benefit from higher copper price and they spent their capex. Right now it's the earning phase. So they will generate a lot of free cash flow.
(1:08:50) They will generate a lot of profits and this will lead to good returns for the holdings that we have. We try to have companies that maybe are not the big big big ones, maybe the ones that are big enough to have funds that can go in but that also have a lot more maybe value in them.
(1:09:12) For uranium it's been going on for like 20 years. You know, uranium it's up and down, but we think maybe this time could be the right one. There's never been as many governments and countries that said, and you know sometimes a country said I will build 10 nuclear centrals in the next 10 years.
(1:09:37) Sometimes they don't do it. But I think this time it's probably clear that they need green energy and it should be good for both the uranium price and the producers. For crude oil, this is a contrarian view, pretty much bearish, not extremely bearish, but I think that it's all about not being maybe a perma bear or perma bull and we think that right now it's easier to be bearish than always wishing for being bullish and having these big returns and catastrophe scenario. We're not really
(1:10:22) wishing for any problem in Hormuz, every day I think okay it should reopen and it would be better for everyone, when you put gas it would be lower and everything so I think it's how it should be and it's our feeling right now. On fertilizers it's really tricky because you know there could be potash, nitrogen, phosphate so there's a lot of stuff but if we focus maybe more on urea and China, recently we saw that prices are coming down. With US farmers there's a lot of noise, usually they like to say, I'm not trying to do anything
(1:10:56) here but they say prices are rising, you're eating our gains and everything, but when we look at real data and everything we can see that it is pretty affordable right now so even if there's an El Niño, something we didn't touch during the conversation, even if there's catastrophic stuff, as of now I don't see why we would be bullish but it could change in the next six months. So this is more short term.
(1:11:27) >> Wonderful. Jérémie, thank you so much for coming on and sharing your views on commodities. That report that you wrote is available for free at aurelionresearch.com and on Substack as well. People can follow you on X at Aurelion RSC and your partner is at Léo Trudel. So everybody please go give Léo and Aurelion a follow and check out that report and I'm really looking forward to having you back on.
(1:11:57) Commodities are going to be I think a big story as we close out the year and we can check in on those Christmas price forecasts. >> Yeah, thanks a lot for having me on Max and I hope that the prediction will play out well. >> All right, well best of luck. Talk to you soon. Thanks for watching. Interested in learning more about Plutus? Check out the link in the description to get started