Last week, I was at the Java Connection in Whitehorse, Yukon. I was in town on my way to see two projects up above Dawson City. Two men sat down at a table next to me.
I couldn&rsquo;t help but overhear their conversation. It focused on the Eagle Mine and the continued fallout from the disaster.
The conversation highlights some risks to investors in Yukon mining companies.
In 2024, gold producer Victoria Gold&rsquo;s heap leach pad collapsed at its Eagle Mine. The collapse broke through the containment area and allowed cyanide laced ore to enter Haggart creek. Haggart creek leads to the Yukon River, a major artery in the region.
Sounds horrible doesn&rsquo;t it?
Ranj Pillai, the Yukon Premiere at the time, indicted the mining industry at large:
<blockquote>
The mining sector has had its fair share of bad actors, unfair practices, and the inherent desire &ndash; driven by the greed of corporate executives and shareholders &ndash; to cut corners, shirk responsibilities, and break the law.
</blockquote>
He compared Eagle to the Clinton Creek mine. That was a true environmental disaster. A bankrupt asbestos mine that the operator abandoned. It cost the taxpayers millions of dollars in cleanup.
The comments fanned the flames of community anger. The politicians rode the wave of emotions and threw the company to the wolves.
The implication was that Victoria Gold was greedy and negligent. That they&rsquo;d made their money and would stick the cleanup on the People of the Province.
That&rsquo;s not the case.
The collapse at Eagle wasn&rsquo;t the waste pile. It was the leach pad. That&rsquo;s where all the gold gets produced. The miners stack the ore on a super-thick pool liner. Then they spray a diluted sodium cyanide solution on it. The cyanide grabs gold ions as it passes through the layers of ore.
The solution, now &ldquo;pregnant&rdquo; with gold, gets piped off the bottom of the pad and treated. They remove the gold and recycle the solution back to the leach pad. This is a simple, proven process for gold mining.
The collapse at Eagle was the leach pad. There was about 265,000 ounces of gold in the material that collapsed. That&rsquo;s worth over a billion dollars today.
If there was negligence, it wasn&rsquo;t greedy corporate executives. They would take the money first and leave the cleanup costs.
Rather, it&rsquo;s a legitimate accident that cost the company everything. At the time, the company was worth C$500 million in market value. After the collapse, Victoria Gold went bankrupt.
The boogeyman in all this was the cyanide used to process the gold ore. And while you don&rsquo;t want it in the environment, it&rsquo;s the least bad chemical to deal with. If you have to have a chemical release, cyanide is a good option.
As long as it doesn&rsquo;t get into the ground water, it will break down in a few weeks. That&rsquo;s the case at Eagle. The collapse happened in June 2024. It killed fish and introduced cyanide to the local watershed. The government monitoring program stopped finding cyanide by August the same year.
That&rsquo;s because a cyanide molecule is one hydrogen ion, one nitrogen ion, and one carbon atom. Sunlight and oxygen quickly break it down into inert byproducts. That&rsquo;s far better than pollutants like mercury or arsenic, which last decades.
The result of the collapse, Victoria Gold went bankrupt. Price Waterhouse Coopers received all the assets. They are actively selling them off now. So, the mine isn&rsquo;t gone, just the company. And the rumor is that a Singaporean mining company will buy Eagle and put it back into production.
Since the Eagle Mine collapse, the government turned over. The new Territorial Government has yet to fully approve a new mine. In April 2026, the government issued conditional approval to BMC Minerals for its Kudz Ze Kayah lead zinc mine. There are 52 conditions that the company must meet. And it still needs two more permits to begin construction.
The shadow of Eagle hangs over the industry in Yukon. Until the territorial government fully approves a new mine, the political risk remains.
Make no mistake, there are fantastic opportunities for mining investors in Yukon. However, we are sticking to exploration companies and producers for now.
The government must fully approve a new mine before we jump into development projects. There&rsquo;s simply too much regulatory and political risk.

dr-hero-img-09-18-26

mobile masthead DR

Hard-hitting economic news and market commentary. Each issue features biting market coverage, expert commentary, and in-depth analysis… along with a warm dose of humor and some skepticism.

Daily Reckoning

The Politics of Gold Mining Stocks

We all feel the pinch of high food prices right now, but don&rsquo;t blame the farmers.
They are getting hit hard. From a recent American Farm Bureau Federation analysis:
<blockquote>
Farmers growing the nation&rsquo;s major row crops will collectively lose $32 billion in 2027, up from an estimated $31 billion in 2026&hellip;
</blockquote>
That&rsquo;s a crazy statistic. The industry will lose $31 billion this year and $32 billion next year. And it&rsquo;s due to record high input prices. Here&rsquo;s some detail from the Purdue University Agriculture Department&rsquo;s August update:
<blockquote>
Whether an energy shock is propagating into agriculture is not settled by asking whether farm-gate prices rose alongside it. Raw commodity prices are set by supply and demand for the commodity itself, not by what it cost to produce. With the crop already in the ground and the herd already on feed, short-run supply is close to fixed, and a rise in fuel or fertilizer costs cannot be passed forward the way a processor passes along a packaging cost. It shows up instead in net returns. Falling farm prices alongside rising energy costs are therefore not evidence that the shock missed agriculture. It is evidence that agriculture must absorb it in the short run.
</blockquote>
This is a critical piece of information. It means that farmers (like miners and oil companies) are price takers. The market doesn&rsquo;t care what it cost you to get the product, it sets the price globally.
That&rsquo;s why corn and wheat prices stayed low even though the cost for inputs like fuel and fertilizer soared. And we&rsquo;ve seen this story before. In 2022, the industry costs hit $431 per acre of wheat. Today they stand at $428 per acre. But prices are far below the 2022 highs:
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/1AdERnomuLeKC0FhaF4U8T/8532ac6b35f26f94712de422270084a5/dr-img1-09-03-26.jpg" alt="image 1" width="540px" />
That&rsquo;s a problem for farmers. They carry the price risk through the season. Some farmers will sell part of their production ahead of time (hedging).&nbsp; That way they have some guaranteed return on their investment.
However, no amount of hedging can offset the massive increase in costs for farmers. And, as the authors above said, we are in a place where the crops are about to be harvested. Farmers that take a beating this year will have less capital for planting in the spring.
These high costs will also change the math on what gets planted. When fertilizer costs soar (like today) farmers often plant soybeans instead of corn. Soy doesn&rsquo;t need nitrogen fertilizer, so it&rsquo;s a cheaper and more profitable alternative. For example, the December 2027 corn futures are $5.30 per bushel while November 2027 soybean futures are $12.00 per bushel. That means soybeans bring in $6.70 per bushel more than corn.
That&rsquo;s going to lure a lot of farmers to switch acres from corn to soybeans.
Wheat farmers face the same problem. The forecast cost for an acre of wheat just hit $428, a record high price. In the States, wheat farmers substitute different crops depending on where they farm.
There is a saying among commodity investors: &ldquo;The cure for low prices is low prices.&rdquo;
That is just shorthand for saying that low prices will curtail supply. When you reduce supply, and keep demand steady, prices must go up. And grains like corn and wheat underpin much of the U.S. food supply. That&rsquo;s why corn and wheat prices will prove that idiom over the next 18 months. I don&rsquo;t know if they will test 2022 highs, but the prices are going higher.
We don&rsquo;t want to buy farmers, because they aren&rsquo;t going to make any money. Instead, the best way to play the rising prices is through two simple exchange traded funds: Teucrium Wheat Fund (NYSE: WEAT) or the Teucrium Corn Fund (NYSE: CORN).
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/18cHzPEnoFyBAWEeeuRM60/8f9e88073239a89a0f9c2019c99468f9/dr-img2-09-03-26.jpg" alt="image 2" width="540px" />
As you can see from the chart, the price of both wheat and corn rose since July. But they have a long way to go to retest the high prices from 2022. I still think that&rsquo;s a possibility. The price is too low for the cost inputs. Farmers are losing a lot of money. That&rsquo;s a recipe for a big win in grain prices.

dr-hero-img-09-03-26

Big Gains Ahead in Soft Commodities

The Iran war taught the world about chemicals that otherwise never get public attention.
Take sulfur for example. This yellow element goes in nearly everything. The market for sulfur is relatively small, about $6.5 billion per year (in 2025). But we use it in a broad swath of critical stuff:
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/5xZuRegjpsk9Bms3TKa42G/305dd346e40559bb891b1d326fdd579a/dr-img1-08-29-26.png" alt="image 1" width="540px" />
Sulfuric acid is the most important use for sulfur. The largest consumer is phosphate fertilizer. You simply can&rsquo;t make enough phosphate fertilizer (DAP) without a large supply of sulfur.
It&rsquo;s also a critical processing agent for many metal refiners including copper, nickel, cobalt, and neodymium. Sulfur is even used in some electric vehicle batteries.
It&rsquo;s one of those commodities we don&rsquo;t think about until the price goes up. And boy has it gone up.
Most of the sulfur we use comes from oil refining. A large part of global sulfur comes from refineries in the Persian Gulf&hellip;behind the Strait of Hormuz. Fully 50% of the world&rsquo;s seaborne sulfur got shut down with the Strait closed. And about 40% of the Middle East&rsquo;s supplies are offline due to military strikes on oil refineries there.
As the shortage hit, Russia, China, and Turkey all restricted or cut off exports to makes sure they had enough for their own use.
As you can imagine, a shortage of something this critical drove prices through the roof. According to a study by the Colorado School of Mines:
<blockquote>
Middle East seaborne sulfur prices surged past $800 per ton on arrival in Asia. Some Western benchmarks peaked around $1,500 per ton. Even with a shaky U.S.-Iran peace deal, destroyed regional processing infrastructure and lingering export controls will keep supply bottlenecks tight and maintain a price premium for years. A return to normal global shipping will likely take months, and maybe longer.
</blockquote>
Remember, this stuff is critical for phosphate fertilizer manufacturers. A ton of diammonium phosphate fertilizer (DAP) takes almost half a ton of sulfuric acid to make. And it takes about 10 tons of sulfuric acid to make a ton of nickel from ore. When you jack up the price of sulfur, it changes the economics of these, dramatically.
As you can see from the chart below, the price of sulfur soared from 2025 to today. It&rsquo;s up 10X since January 2025.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3qZOUFqPuo580P5ZoZfKiI/30a5f87482a5039392398d93291541f8/dr-img2-08-29-26.jpg" alt="image 2" width="540px" />
That drove fertilizer makers like Mosaic to cut production due to the high input price. That means farmers will pay more and/or produce less.
This is bad news for food prices and inflation in general. But there is a silver lining. Refiners that source oil from outside the middle east are generating excellent cash flows from sulfur today.
Refiners with sulfur recovery units (SRU) specialize in sour crude oil. Initially, that was done so they could use low-cost crude oil. SRU&rsquo;s remove sulfur before the refiner makes gasoline or diesel. Companies like Valero (NYSE: VLO), Marathon (NYSE: MRO), and ExxonMobil (NYSE: XOM) all produce sulfur as a byproduct. And the revenues are soaring.
The simple way to play high sulfur prices today is through these refiners. And the easiest way to do that is through the VanEck Oil Refiners ETF (NYSE: CRAK):
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2KezVLvNw8CfADHnIeXnF2/eadce4da436764b92063f57e6f682717/dr-img3-08-29-26.jpg" alt="image 3" width="540px" />
We will look back on 2026 and 2027 as a boom period for refining companies. If you don&rsquo;t have a position in them yet, do so. Because this trend has legs and will continue for months if not years.

dr-hero-img-08-29-26

Oil Refiners’ Big Yellow Cash Cow

I'm an oil and gas guy. In graduate school, I studied sedimentary geology&hellip; the kind of rocks that hold oil fields. ExxonMobil (XOM) financed part of my original PhD thesis.
Years ago, I was one of the first analysts to suss out the shale plays. I spent a lot of time around Beeville, Texas, following the discovery of the Eagle Ford Shale.
Here's the thing&hellip; in all my time, I've never seen anything like what's going on in the oil markets today. The issue is less about the price of oil and more about refining.
Refining is a historically bad business. Over the past several decades, refiners' profit margins averaged about 1% to 3%. That's terrible. You typically think about oil companies as rolling in cash. Refiners aren't those kinds of oil companies.
However, there's a reason giant "integrated" oil companies like Chevron, Shell, and ExxonMobil all own refiners. Because sometimes, refiners print big money. And that's what's happening today.
Before we discuss how to play this trend, let's do a little background so we can understand what oil is and what refiners do.
<h2 class="centered subhead" style="text-align: center;">Refining 101</h2>
Think of oil as a soup made up of different kinds of molecule chains. Some chains are long and some are short. If they are very short, they form gases at regular temperatures. The shortest chain, methane (natural gas), is just four hydrogen atoms and a carbon atom.
The longest chains, asphaltenes, can hold up to 100 carbon atoms. These are so thick they won't flow without heating. These are common in the Canadian heavy oil sands.
Refiners use different techniques to chop up the chains into their products:
<ul>
<li>Gasoline has four to 12 carbon atoms.</li>
<li>Jet fuel has between eight and 16 carbon atoms.</li>
<li>Diesel fuel has between nine and 25 carbon atoms.</li>
</ul>
Shorter chains vaporize easier. Longer chains have more energy. Each link between a carbon atom and hydrogen atoms holds energy. The more links, the more energy dense the molecule.
Like the price of oil, gasoline, diesel, jet fuel, etc. move together around the world. That's because gasoline is gasoline is gasoline. You know it has four to twelve carbon atoms, so there is uniformity to the product. If you make gasoline in Kyoto, Japan, and gasoline in Philadelphia, the two batches are going to be nearly identical. However, the oil they come from is not.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2FM3msuPuTnKIqZ10SGBmN/656cd1d1893017bb84ff9622e75f90a3/dr-img1-10-07-26.jpg" alt="image 1" width="540px" />
The most important thing to know is that as long as you can move distilled products, then the market isn&rsquo;t set in one area. Instead, the price is set globally. That's why the price of gasoline here in the U.S. is high, even when we produce plenty of our own oil. You can ship it to the market that's willing to pay the best price. That regulates the market.
Refiners use chemistry to "crack" oil molecule chains into those fuel ranges. But it's an imperfect process. You can't turn a barrel of oil into a whole barrel of gasoline.
What comes out during refining is about 43% gasoline, 28% diesel, 14% heavier products (like roof tar), 9% jet fuel, and 6% natural gas liquids (like butane). However, that's an "ideal" barrel of oil.
In light, sweet crude oil like West Texas Intermediate (WTI), you get up to 45% gasoline, 30% diesel,15% jet fuel, and 10% heavy residue. In Canadian oil sands (WCS), the breakdown is much different. About 60% of the barrel is heavy residue, 25% diesel, 15% gasoline, and 15% jet fuel.
That's why there are huge price differences in oil between source regions. For example, the difference between WTI and WCS is on the order of $15 to $25 per barrel. That's because refiners can make much more useful fuel from a barrel of WTI.
We measure the profit from refining a barrel of oil using the 3-2-1 Crack Spread. It uses an average price for three barrels of oil yielding two barrels of gasoline and one barrel of diesel. This how we get a general idea of the profit margins for refiners.
Today, a barrel of WTI costs around $96, a gallon of reformulated (RBOB) gasoline is around $4.39 per gallon, and ultra-low sulfur diesel is $4.99 per gallon. If we put that into our 3-2-1 Crack Spread model, we see that refiners make about $96.78 per barrel in profit today.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/OyQEUFqROUGoRWoRF58Gw/3395e14bd03fe0a56b55eaf0fa47ec60/dr-img2-10-07-26.jpg" alt="image 2" width="540px" />
To put that into perspective, a year ago, refiners made about $32 per barrel&hellip;
That's an extraordinary jump in price. It's literally a 200% increase in one year. And it doesn't look like it will change anytime soon. So, refiners are generating enormous profits today. And that they may make EVEN MORE if the Strait of Hormuz opens.
That's because the prices of refined products are disconnecting from the price of oil. This is the part of the story that is new territory. And it's due to the wars in Ukraine and Iran.
<h2 class="centered subhead" style="text-align: center;">Destruction From Above</h2>
Oil refineries are vulnerable. They are big, delicate chemistry sets. You can't move them, hide them, or even harden them. That makes them big, fat, juicy targets for drones and missiles. So, they are being hit&hellip; every day.
This is from Sunday, October 4th:
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/7Ep8KD7VEM85u37nt8lObj/316663c646cec756549a7bd72418b0b5/dr-img3-10-07-26.jpg" alt="image 3" width="540px" />
Yemeni Houthis are now fully involved in the Iran war. They targeted oil infrastructure like Saudi Arabia's East/West pipeline and refining assets.
The story is similar in Russia where Ukraine recently hit 24 of Russia's 34 refineries. That's about 5.1 million barrels per day, or 81% of Russia's refining capacity.
It's so bad that Russia is trying to fortify its Ilsky refinery with shipping containers:
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/69YF6879g3ya5oC3W0KH0G/ac30ac53b5a397d96c57437f0eb3e95f/dr-img4-10-07-26.jpg" alt="image 4" width="540px" />
Ukraine's attacks disrupted roughly 4% of global seaborne diesel and gasoline trade. And that's just Russia.
Together, the two wars cut about 1.6 million barrels per day of global diesel and gasoline supply between February and August. In February 2026, those regions accounted for 45% of global gasoline and diesel exports.
While this situation will slightly improve when the wars end, that doesn't look likely anytime soon. And even if the Iran war ends or the Strait of Hormuz is fixed, that will only bring down the cost of oil. It won't rebuild refineries.
In fact, it may create a glut of oil. There is a scenario where the Strait of Hormuz opens and there simply isn't enough global refining capacity to take all the oil right away. That could send oil prices much lower but leave the price of gasoline and diesel high.
And that is the absolute best-case scenario for refiners. If the cost of their feedstock falls while their products stay expensive, it would increase their profits.
The risk to this trade is if the U.S. government goes ahead with an export ban on fuels. If we can't ship diesel and gasoline, there would be a dramatic fall in prices. And a massive backlash.
That's why I consider this a risky trade. The safest way to play this is to simply buy the VanEck Oil Refiners ETF (NYSE: CRAK):
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/qGjkJlKNhx3oz6EexXazd/bd0d8f1572d34137e0181d5a0524f862/dr-img5-10-07-26.jpg" alt="image 5" width="540px" />
CRAK holds a basket of the world's refiners and gives you exposure to international refiners that we can't buy easily. And it's cheap. The price-to-earnings ratio (PE) of the S&amp;P 500 is about 25 times. CRAK, on the other hand, trades for about 9.4 times.
So, these refiners, even when they are having their best performance ever, are still 2.5 times cheaper than the S&amp;P 500. It makes no sense.
You could go out and buy CRAK and do well. But there is another, riskier kind of opportunity in refining today.
The difference, for investors, between CRAK and small U.S. refiners is scale. In CRAK you get refiners that are global. That means they are the ones paying the risk premiums on oil. The investment success hinges on their ability to make money in this environment. It&rsquo;s a more limited upside, but it also reduces risk.
However, for those willing to take on company risk, there is a huge upside in individual refiners in the U.S. They get excellent access to crude oil, without the risk premium. In addition, they aren&rsquo;t well known in the broader market. We see that in the low price to earnings (about 9 times earnings).
That means, as these companies outperform the market and expectations, they will attract more investors. To put this in perspective, the S&amp;P 500 trades at 25 times earnings. So, these companies are cheap, relative to the greater market.
And I think the U.S. refiners have a massive edge over their peers. That's because our domestic oil industry is outstanding. There simply isn't a better place in the world to produce oil. There may be better places to find the oil&hellip; but if you want to get it from the well to the refiner, the U.S. is the place to be.
But if the U.S. government bans diesel exports, these companies will be hurt. And there will be massive profit taking. So, if you see that in the news, don't wait for us to give you the alert &ndash; just sell your position.
That said, if the Strait of Hormuz suddenly opens and oil prices fall, that could be even better for these companies. If we find ourselves in a place where oil prices fall 20% but distillates only fall 10%, these companies will make even more money than they do now.
Let that sink in&hellip; there's a scenario where oil and fuel prices go down but the refiners' profits go up!
We are in the absolute sweet spot for refiners. The stuff they sell is more than double but the stuff they buy to make their product isn't. That's the recipe for higher profits and it should continue.

dr-hero-img-10-07-26

Pure, Refined Profit

Back in the 1980&rsquo;s, there was a pizza place outside the Tropicana Casino in Atlantic City. That is where I learned all about casino games. I&rsquo;d sit in a booth eating a greasy slice of pizza, while my uncle waxed on about blackjack hands or craps odds.
My uncle skipped college and went to dealer school. I used to sit in my grandmother&rsquo;s kitchen and watch him practice shuffling multiple decks of cards. He always had big red dice or decks of cards with holes drilled through them.
From those late-night sessions, I determined that gambling was entertainment. As in, it cost me money to play. And even when I won, it wasn&rsquo;t enough to cover my losses.
I still like to sit at a table occasionally because it&rsquo;s fun. But I&rsquo;d never consider it a retirement plan.
And yet, we have an entire generation doing exactly that. According to a St. Bonaventure University poll, 27% of all Americans and 52% of American men between the ages of 18 and 49 have sports book accounts.
Of those people surveyed, 85% think that they can make money doing it. In fact, only about 4% of betters made money in the long term. According to a study from the Rady School of Management at the University of California San Diego, 96% lost money. And the survey&rsquo;s lead researcher said this:
<blockquote>
&ldquo;Only 4% made money from online betting. That is by design. Online gambling platforms often ban or throttle frequent winners&rsquo; accounts. There is no right to gamble.&rdquo;
</blockquote>
Seems like a good business. And the marketing is everywhere. I don&rsquo;t know about you, but I see and hear gambling app ads constantly. Every sporting event on tv, podcasts, YouTube videos, popups, you simply can&rsquo;t avoid DraftKings, Hard Rock Bets, Fan Duel, etc. And now we have apps like Kalshi, that let you bet on anything.
It&rsquo;s way too easy to gamble today. And there is a reason for that. Remember the old saying, if you don&rsquo;t know who the &ldquo;fish&rdquo; is at the table&hellip;then you are the fish. The fish is the inexperienced player that ends up losing money. In these betting apps, you are always the fish.
There&rsquo;s a reason those apps are easy to get. They want your information. Just like every other online subscription you have, you become the commodity when you sign up.
Some of these apps will even pay you money to subscribe. I saw an add this week that offered $100 in bets if you put $10 in your account. If you think they are giving you that money out of the kindness of their hearts, well&hellip;as we say down here in the south, &ldquo;Bless your heart&rdquo;.
These gambling sites make so much money that they can afford to take a small loss to get you in. They know that they will make far more money over the long run. You see, they take a cut from every bet you make. It&rsquo;s called the hold or the vig.
For a big, liquid bet on a football or basketball game, the vig is about 4% to 5%. When you move into player prop bets, the vig jumps to double digits. Futures markets&rsquo; bets can go from 15% to 30%.
That&rsquo;s why gambling apps are not investments.
Money managers&rsquo; fees on big managed funds range from 0.01% to at most 1.5% on very active funds. An easy rule of thumb for most funds is less than 0.75%. If the fund charges you 1%, it better be actively managed or have some justification.
If you pay more than 1% management fee, the fund is expensive.
Bets are way more expensive. Remember, you pay at least 5% on any bet with -110 odds. The math on that is not great. Here&rsquo;s what I mean&hellip;
Let&rsquo;s say you make 100 bets at $110 per bet at -110. If you win half of those bets, you are down $500, because of that vig. Just to break even, you must win 53 of those 100 bets. And that&rsquo;s just on the basic bets. According to Fox Sports, here are the common vigs you&rsquo;ll pay on betting apps:
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/65jYjRyqeOrlEgyKd7YHeK/55063b4f19cd0a3f19513cbebe5c08a6/dr-img1-08-18-26.jpg" alt="image 1" width="540px" />
Look, I can&rsquo;t emphasize enough, how impossible it is to &ldquo;invest&rdquo; with gambling apps. This is fun. It&rsquo;s speculation&hellip;but it is not investing.
Imagine you put $100,000 into a fund that pays 7%, and you leave it there for 30 years. If the fund charges you 0.1%, you earn 6.9% and your investment becomes $740,000. If the fund charges you 1%, you earn 6% and your investment becomes $574,000.
This is the kind of math a serious investor uses. And I&rsquo;ve seen grown men get absolutely irate over a quarter of a percentage point in fees on funds. That&rsquo;s because a quarter of percent point becomes serious money over thirty years. That&rsquo;s why you can&rsquo;t pay 10% per bet and consider it investing.
Online gambling is a huge business that&rsquo;s growing quickly. According to multiple sources, online gambling will grow about 12% annually through 2033. The market currently is around $100 billion. That could hit $279 billion by 2034, according to Polaris Market Research.
To put that in perspective, the global copper market is only $260 billion. And online gambling could exceed that in less than eight years.
The best bet here is to take the bulk of your betting money and buy the stocks instead. You can do that through funds like the Roundhill Sports Betting &amp; iGaming ETF (NYSE: BETZ).
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/P1TURSPTUNfvukkZY2bXM/9397daa9d5389d2512942a5a2390b6d1/dr-img2-08-18-26.jpg" alt="image 2" width="540px" />
Here are the top holdings of BETZ:
<ul>
<li>Evolution AB: 7.2%</li>
<li>Futter Entertainment: 7.1%</li>
<li>DraftKings: 6.5%</li>
<li>Allwyn AG: 6.5%</li>
<li>Light &amp; Wonder: 5.4%</li>
<li>Lottomatica Group SpA: 5.2%</li>
<li>Super Group: 5.1%</li>
<li>Entain PLC: 5.0%</li>
</ul>
And the fund managers only charge you 0.75% in vig for BETZ. That&rsquo;s a solid bet. Certainly better odds than you'll find on these companies' apps.
As I said, I&rsquo;m not fun-shaming anyone. If you love to gamble, go for it.
My grandpop played the numbers every week for as long as I can remember. We would all sit on the couch when they pulled the ping pong balls out of their cages. He was always one number off. We always laughed. It was pure entertainment. At no time did he think it was a retirement plan.

dr-hero-img-08-18-26

Suckers Bet, Winners Invest

Here is an unpopular opinion&hellip; I think the data center buildout will fall far short of expectations. And I&rsquo;m not the only skeptic.
Giant investment bank Goldman Sachs expects companies to complete only about 50% to 60% of data center capacity. That&rsquo;s due to delays and cancellations.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2tFHcEEWZg8aZ7eAUudmiw/248011e1a77395bd5b1417e453858173/DR-Issue-080826-1.jpg" alt="Capacity Aditions" width="540px" />
Data centers are incredibly unpopular. Ask anybody.
According to Gallup&rsquo;s March 2026 poll, 71% of Americans oppose data centers in their area. Half of those polled are strongly against them. The big reasons are:
<ul>
<li>Resource Usage (water and electricity): 50%</li>
<li>Quality of Life (traffic and congestion): 22%</li>
<li>Effect on Costs (tax increases): 20%</li>
<li>Pollution (noise, light, and water): 16%</li>
<li>Negative View of AI: 27%</li>
</ul>
Meanwhile, data centers get special treatment from politicians. For example, in Texas, Meta (the parent company of Facebook) spent $1.3 million on the Texas primary elections. Elon Musk put $500,000 into state senator candidates.&nbsp;
People smell a rat. You can&rsquo;t escape the rising cost of electricity.
According to Dr. Ben Green, assistant professor at the University of Michigan School of Information and School of Public Policy, tech companies are right to be concerned about public disdain for data centers. In a recent interview with The Harvard Gazette, he laid out the worries of everyday Americans:
The public is concerned about rising electricity rates caused by data centers. They are concerned about the enormous water use that data centers require. They&rsquo;re concerned about public handouts in the form of tax breaks that are going to data center developers, and they&rsquo;re also aware that data centers don&rsquo;t bring meaningful economic development, especially in the form of jobs.
The problem is that our power grid is old. It needs a lot of investment to bring it into good working order. It can&rsquo;t handle a massive surge of demand as it stands. Data centers add massive new load to that grid. They currently use 4.4% of all electricity generated in the U.S. That will jump to 12% by 2028, according to research from Harvard Kennedy School.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/80Yvxmvf0ykDkD6OkgmJL/7746ff3ac5e4e02a80338629cee3c3d3/DR-Issue-080826-2.jpg" alt="Data Centers are driving strong power demand" width="540px" />
However, it&rsquo;s not simply the unpopularity of data centers that will get them canceled. It&rsquo;s mainly the supply chain for all the stuff that they need. The biggest issue regarding supply is connection to the power grid.
Utility connection can take more than five years, according to Hanwha Data Centers. They found four factors that create the largest delays:
<ul>
<li>Utility study backlogs</li>
<li>Transmission upgrade requirements</li>
<li>Permitting complexity</li>
<li>Equipment lead times</li>
</ul>
These problems tie back to our aging grid. It can&rsquo;t handle this kind of demand growth. At the end of 2023, eleven thousand, six hundred projects waited to connect to the grid. Those projects represented 2,600 gigawatts of generation and energy storage. At the time, the U.S. grid&rsquo;s entire energy generation capacity was only 1,280 gigawatts.
It&rsquo;s a huge problem, but it isn&rsquo;t new.
Only 13% of the new power requests submitted from 2000 to 2019 were in operation by 2024. That&rsquo;s not good. Less than one in five got through. Looking ahead, that could mean even fewer data centers.
All of this is important because some folks see data centers as a lynch pin for commodity investments (particularly metals). So, I posed this question for research this week:
<blockquote>&ldquo;What is the investment case for copper without data centers?&rdquo;</blockquote>
Here&rsquo;s the thing &ndash; it&rsquo;s still great. You know I&rsquo;m a copper bull. It&rsquo;s my favorite metal. It&rsquo;s the key that unlocks the electricity we need for the future. It&rsquo;s the railroad that makes all this AI data work.
And it&rsquo;s not just AI. EVs, renewable power, batteries, etc. are all incredibly copper intensive. Updating and expanding power grids all over the world, not just here in the U.S., requires billions of pounds of copper.
On the other side of the equation, we&rsquo;re dealing with an aging fleet of mines that require more ore moved to produce the same amount of copper. And there is currently a lack of new copper mines coming online.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2NGk2y823RSxI6ceyPdtWP/f963db79dec0f891abc3086ad677002e/DR-Issue-080826-3.jpg" alt="Figure es 1 total copper market balance" width="540px" />
Make no mistake, data centers are not the only reason metal prices soared. And because a few won&rsquo;t get built doesn&rsquo;t derail the bull market case for both aluminum and copper&hellip;let alone the suite of critical minerals.
Even without data center demand, there will be a &ldquo;structural deficit&rdquo; of copper by the end of the decade. That&rsquo;s the next few years. According to S&amp;P Global&rsquo;s recent forecast, copper mining will peak in 2030 at 27 million metric tons. That study shows current copper demand at 28 million metric tons today, rising 50% to 42 million metric tons by 2040.
We have not yet discovered enough mines to meet that demand, let alone those under construction.
Short of another massive global recession, sustained higher copper prices are inevitable. We do not have the supply we need to meet forecast demand. That's why everyone should own copper stocks. The easiest way to do that is to buy the Global X Copper Miners ETF (NYSE: COPX). <img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6tIrk722m74NAxZvcZOn7a/ba5aa40f9be14167a18af4f9835a0236/DR-Issue-080826-4.jpg" alt="CopX" width="540px" />
Make no mistake, if even half of the data centers get built, it&rsquo;s a massive increase in copper demand. And we need copper more than ever to continue the mass migration to an electric world. Invest accordingly!

DR-Issue-080826-Featured

AI is Just Gravy for Copper

A Reuters headline published back in December 2025 touted: Five Energy Market Trends to Track in 2026, the Year of the Glut.
Analysts expected oil to be oversupplied. That aged well for about two and a half months&hellip;
However, natural gas remains hated here in the U.S. The &ldquo;Year of the Glut&rdquo; moniker stuck with traders. And they are heavily short. In fact, natural gas looks cheap, hated, and prepared for a serious uptrend.
And I don&rsquo;t say that lightly. We call natural gas the &ldquo;widow maker&rdquo; for a reason. Trading natural gas is like trying to get your eight seconds on a gold star Brahma bull. But sometimes you get a good draw. And that&rsquo;s what we see right now.
Here in the U.S., big money hates natural gas. The shadow of last year&rsquo;s glut forecast remains fixed in traders&rsquo; minds. But the market turned sharply in the last few months.
War in Iran and Ukraine devastated the global natural gas supply. LNG markets are ripping higher. And in the U.S., data centers are gobbling up real estate in west Texas to take advantage of the proximity to cheap natural gas for electricity.
The only folks that don&rsquo;t seem to get it are U.S. investors. And that&rsquo;s the opportunity. Let me show you what I mean. Below is a 30-year chart of spot natural gas prices in the U.S. The current price is under $3 per million British thermal units (MMBtu). The blue line is the 5-year moving average price.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/5oiAiZGY7oak7PVZx2bxuf/4be731469bb3d3c00d32e19371846bdb/dr-img1-07-22-26.jpg" alt="image 1" width="540px" />
As we can see, the current price is below the 5-year moving average. In other words, the current price does still show a glut of natural gas. And we expected that. Here&rsquo;s what the U.S. Energy Information Administration (EIA) published in January 2026:
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4ZUcxKVbaX4XVHmbK2zIdu/10dc99d3905b40396f3110770821f479/dr-img2-07-22-26.jpg" alt="image 2" width="540px" />
Remember, this was before the war in Iran shut down exports from the Middle East. So far, that chart is right on. But I expect to see that rise in price to move higher, faster due to the limited liquified natural gas (LNG) exports.
That brings us to our first opportunity. You see LNG prices in Europe and Asia are as high as $18 and $19 per MMBtu, respectively. That gives U.S. LNG exporters a huge margin. And the industry thinks that it will continue.
There are currently six major LNG plants either expanding or under construction. The EIA forecasts LNG exports from North America to more than double by 2029. Most of that comes from the U.S.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4nPU5Ijrg3TD24TC4Whq7W/c5beac60c8ffc4ca1c81276d154f7aa0/dr-img3-07-22-26.jpg" alt="image 3" width="540px" />
This is important because natural gas is difficult to ship without pipelines. Compared to oil, natural gas is immobile without these special LNG facilities. The recent wars in Ukraine and the Strait of Hormuz, clearly demonstrate the unreliability of those supplies.
So, in the short term, companies like Cheniere Energy (NYSE: LNG) are going to make a ton of money on this trade. Cheap U.S. gas, shipped to Europe and Asia is a great trade right now.
However, natural gas prices can&rsquo;t stay this cheap for long. And that&rsquo;s why we want to own the lowest cost natural gas producers in the U.S. Companies like Range Resources (NYSE: RRC), Antero Corporation (NYSE: AR), and EQT Corporation (NYSE: EQT) are low cost and major natural gas producers.
And like natural gas prices, the stocks are down:
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3cRgUDGAyW9oW65jP62sRi/05eedab5ac9288045ac0d0aa4aff471b/dr-img4-07-22-26.jpg" alt="image 4" width="540px" />
EQT is now as cheap as it was in 2025. And that&rsquo;s our second opportunity. It&rsquo;s not ripe yet&hellip;but soon. We just want to see this chart tick up a little bit. As soon as that uptrend starts, it&rsquo;s game on.
So, in summary, buy LNG producers today and watch natural gas producers for the next few weeks. When they move higher, jump into that trade. Be prepared for some volatility. But if you hold for a year, you will be rewarded.

dr-hero-img-07-22-26

Everybody Hates This Commodity

Back in 2022, I briefly worked for a tiny junior company exploring for a rare gas in Alberta. The company found an old natural gas field that eventually played out.
It didn&rsquo;t run out of natural gas. It just had so much other stuff in it that the gas wasn&rsquo;t economic. Natural gas is cheap. So, the wells need to produce a lot of it for them to make money.
But that wasn&rsquo;t happening.
For every molecule of methane (natural gas), the wells produced too much carbon dioxide. And each well they drilled got steadily worse. But they also produced a little helium. And the further north the field went, the more helium the wells contained.
My brief time with the company got me very interested in niche commodities like helium.
We really only see them in small ways, like party balloons filled with helium. But behind the scenes, this gas is a critical commodity.
It&rsquo;s the only one whose molecules are so small that they can escape gravity and leave our atmosphere. That makes it a scarce resource. And it&rsquo;s incredibly useful in industries, particularly semiconductor manufacturing. And it was way too cheap for its utility.
It&rsquo;s inert, so it doesn&rsquo;t react with any other elements. It can be used to flush out other reactive gases, to protect sensitive microchips. Semiconductor manufacturers use about 17% of all the helium supplied. The other major uses are controlled atmospheres for fiber optics and semiconductors (17%), MRI imaging (15%), and aerospace (9%).
This chart from the Canada Energy Regulator shows the global share of helium use (from 2022):
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2ntzKUOQFtzS2iOJ2pgJox/729209ae5933e98e43cf93254cff1397/dr-img1-07-21-26.jpg" alt="image 1" width="540px" />
The market is relatively small. For example, the U.S. produced about 81 million cubic meters of helium in 2025. It produced 1.1 billion cubic meters of argon in comparison.
The entire global helium market was just $3.36 billion in 2025. However, it is critical to those industries. The gas comes in several grades:
<ul>
<li>Crude helium (60% to 80% pure)</li>
<li>Gaseous helium (98%+ pure)</li>
<li>Grade A (99.997% pure)</li>
</ul>
There are only four plants in the U.S. that can refine the first two grades into the Grade A.
The problem is that the war in Iran cut off 20% the world&rsquo;s helium supply so far. And it could have a much larger impact as the war escalates. The giant South Pars field in between Qatar and Iran produces roughly 33% of the world&rsquo;s helium.
The other major suppliers are the U.S., (42.6%), Russia (9.5%), and Algeria (5.8%).
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/5UqO2e6APRl8VkRfACU4rb/7b6e8525a95a972aecd600e1b32b896b/dr-img2-07-21-26.jpg" alt="image 2" width="540px" />
As we can see in the chart above, the U.S. suppliers should make out well from this. Air Products (NYSE: APD), Linde (Nasdaq: LIN), and ExxonMobil (NYSE: XOM) are major suppliers. DCP Midstream, a subsidiary of Phillips 66 (NYSE: PSX), runs the primary helium hub that feeds crude helium to adjacent purification plants.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/42cLf9KYqaIP7GenNebxem/eaa5da31abe625426297639a064abce6/dr-img3-07-21-26.jpg" alt="image 3" width="540px" />
Helium is such a small market that most of it comes from either major oil and gas producers like ExxonMobil or gas makers like Linde.
There are some exploration companies out there, but buyers beware. Few of them have production. If their website is mostly about helium facts&hellip;run away. The way to play helium is through the big companies like Linde and Air Products.
And here&rsquo;s the thing. The helium price accounts for less than 1% of the cost of a chip. But the industry consumes nearly 25% of all the helium. That means, in a shortage, the price can go up. Because these chip makers must have it. And they will pay the higher prices to get it.
That means helium sales should give the big companies&rsquo; earnings a boost in 2026.

dr-hero-img-07-21-26

Helium to the Moon!

On August 24, 2006, I joined Dr. Steve Sjuggerud on a trip to Tennessee. He asked me to come with him to visit a zinc smelter, of all things.
For those of you who don&rsquo;t know Dr. Steve, he was one of the most successful newsletter writers and investors ever. He retired from Stansberry Research to surf, invest, and live the good life.
He wanted to go to Clarkesville Tennessee because the company, Zinifex, was an anomaly. His research showed that Zinifex would earn $2.5 billion in profit that year. But its market value was just over $5 billion.
In other words, it traded for about two times earnings. That&rsquo;s super cheap and an oversight by the market. That&rsquo;s exactly the kind of thing that Dr. Steve loved to find.
I went along and discovered why the Clarksville refinery was so profitable. It was re-mining old tailings ponds&hellip;for germanium.
Tailings ponds are the trash heaps of mines and smelters. It&rsquo;s where they put the material that isn&rsquo;t the metals they want. This smelter complex began life back in the late 1970&rsquo;s. It&rsquo;s the only primary zinc smelter in the U.S. The ore that carries the zinc also carries associated metals like cadmium, thallium, indium, and germanium.
At that time (2006) the price of Germanium rocketed from around $360 per kg to $660 per kg. The smelter&rsquo;s waste ponds were full of metal. The company realized it could pad the zinc profits with germanium&hellip;
Today, the price of Germanium is over $7,000 per kg. That&rsquo;s 960% gain since I was there last.
Fast forward almost 20 years and the Clarksville smelter has new owners. Korea Zinc Co. bought the smelter in December and has big plans&hellip;that include those same tailings.
Korea Zinc says that it has 600,000 metric tons of material to process now worth more than $3 billion. The ponds contain zinc, copper, lead, silver, and Germanium. The company believes it has about six or seven years&rsquo; worth of material stored in the old tailings ponds.
Korea Zinc plans to invest $7.4 billion to convert the old smelter into a critical minerals complex. And this story is part of the bigger U.S. critical metals independence theme going on today. According to the company&rsquo;s press release:
<ul>
<li>Korea Zinc and the U.S. Government, through the Department of War and the Department of Commerce, have concluded an initial, conditional commitment &ndash; including U.S. federal and private investment &ndash; that will support a domestic critical minerals project with an expected $6.6 billion of capital expenditures. The agreement will support Korea Zinc&rsquo;s plans to expand operations, including the building of a 650,000 m&sup2; smelting facility in Tennessee.</li>
</ul>
<ul>
<li>The Tennessee project aims to create an integrated smelter producing both base metals as well as critical and strategic minerals, with phased commercial operations targeted for 2029.</li>
</ul>
<ul>
<li>11 out of 13 nonferrous metal products that the U.S. Smelter will produce are designated as &ldquo;critical minerals&rdquo; by the U.S. Government. This conditional commitment strengthens the critical minerals supply chain for the U.S., South Korea, and other allied countries, ensuring a consistent, steady supply of key elements and minerals.</li>
</ul>
This is a huge development for the domestic critical metals industry because there are few smelters in the U.S. The reason for that is smelters are considered &ldquo;dirty&rdquo;. Even though, back in 2006, the smelter complex was the least industrial looking campus I&rsquo;d seen.
However, the result of decades of anti-mining rhetoric left byzantine hurdles to build new smelters. The permitting alone would take years to navigate. Not now. Not anymore. The company says it can get to production in just two years&hellip;
I may have to hop another plane to Nashville and revisit the project.
Korea Zinc shares have pulled back significantly from recent highs, but the company doesn&rsquo;t trade in the U.S.
Fortunately, this re-mining story is one that will play out all over the world.
The entire mining sector has pulled back in recent months, and there are bargains to be found. We're on the hunt for well-positioned re-mining plays and will share anything interesting we find.

dr-hero-img-07-14-26

The “Re-Mining” Revolution

On June 25, 2026, the technology giant Apple Inc. (Nasdaq: AAPL) increased prices for its computer products by $100 to $500. So, a new MacBook Neo went up 17%. And a new iPad Pro jumped 25%.
That, my friends, is inflation. The company cited the rising cost of memory for the need to bump up prices. Effectively passing along the cost increase to consumers.
Inflation is a funny thing. There is the political version, which relies on the arbitrary Consumer Price Index (CPI). And then there&rsquo;s the &ldquo;boots on the ground&rdquo; version, which is the basic cost of the stuff we buy.
The CPI theoretically tracks a basket of stuff that reflects the average consumer. But it&rsquo;s nearly impossible to create an &ldquo;average&rdquo; across every person in America.
Today, the reported annual CPI is at 4% through the end of May. That seems a bit low. I don&rsquo;t know about you, but the cost of my daily life is up far more than 4%. And I don&rsquo;t need the government to gaslight me on what my daily life costs. I know it intuitively, because of the price of gasoline, food, cleaning supplies, etc.
I like to use a different basket of goods to track inflation. And it shows me that the cost of living is up 20% so far in 2026.
The Commodity Research Bureau (CRB) Index tracks the cost of raw materials. It began in 1958 and originally tracked 28 commodities. The original index tracked things like barley, flax, cottonseed oil, onions, wool tops, soybeans, etc.
Today, the index tracks 19 commodities like cocoa, aluminum, copper, coffee, gold, hogs, cattle, nickel, orange juice, etc. Oil and petroleum products make up 33% of the commodities.
That collection of commodities tracks the fundamental cost of life. These are the basic building blocks of today&rsquo;s world. And as you can see, they cost more:
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/1AJLAS1VqCzTxcFwVMuinA/b707f827629ac39d76be4b984664ec47/dr-img1-07-07-26.png" alt="image 1" width="540px" />
While this basket of commodity prices is down from their high in May, it&rsquo;s still much higher than it was in January. And it turned higher again this month.
One of the principal drivers of actual inflation is transportation. Gasoline drives that increase:
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2uMsb2nzIw5zdzga0tifEb/1ad815ffb4cb56db6528f224a18c9d95/dr-img2-07-07-26.png" alt="image 2" width="540px" />
The spot price of gasoline is up 75% year to date according to the futures market at the Chicago Mercantile Exchange. Diesel is up more than 40%, according to the St. Louis Federal Reserve data.
That&rsquo;s a huge increase. Fuel costs hit everything we use, from the cost of grain to Amazon deliveries. And companies need to pass that cost on to consumers. That&rsquo;s why we see such increases in grocery prices, especially fresh produce.
When fundamentals go up so much, so rapidly. It makes everyone feel less rich. And that influences what we do in the future. Sentiment matters. When we feel rich, we spend money. When we feel poor, we save it. And right now, the Conference Board&rsquo;s Consumer Confidence Index is near Covid pandemic lows:
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4uvIKjmmrmtUXGeWkHViOU/948bac0f52fe273dd60b4bda52f6f514/dr-img3-07-07-26.png" alt="image 3" width="540px" />
And when consumer confidence is low, it does not bode well for the companies that sell us stuff. It&rsquo;s time to get out of consumer discretionary stocks, airlines, auto makers, and other stuff we don&rsquo;t need right now.
Instead, we want to own agriculture, utilities, health care, and military contractors. That&rsquo;s the stuff we can&rsquo;t do without.
Today, the cost of living in the U.S. is up, so the average consumer feels poor. That will have an impact on stocks. Combine that sentiment with much higher prices and that&rsquo;s not great for the broad stock market.

dr-hero-img-07-07-26

Time to Sell *These* Stocks

Better than gold. Better than copper. Better than oil. This one grain has the potential to be the best performing commodity in 2026.
According to the latest U.S. Department of Agriculture data, the hard wheat crop will be the smallest in 69 years. The June update revised the entire wheat crop down from 1.4 billion bushels last month to just 1.0 billion bushels. And the export variety of the grain is well down.
Wheat prices don&rsquo;t reflect that shortage&hellip;yet. There&rsquo;s a simple way for investors to cash in on the coming jump in wheat prices.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2TlGNBC9w4cnbZ0qa0czUN/ae66afe577c26e576968ba869299e9b1/DR-Issue-070126-1.png" alt="Hard Red Winter Production" width="540px" />
Hard red winter wheat (HRWW) is the main source of bread and exports. This harvest will be the smallest since 1958, primarily due to drought across the Great Plains. According to Reuters:
Production of hard red winter wheat, the largest variety grown in the United States, was projected to fall to 497 million bushels, down from an outlook for 515 million last month and well below last year's 804-million-bushel crop.
The quality of the harvest is poor as well. Only 25% of the crop rates as good to excellent. That&rsquo;s the lowest since 1986, according to Reuters&rsquo; reporting.
Let&rsquo;s look at historical wheat prices. As you can see from the chart below, the wheat price is nowhere near recent highs.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/7JCZ8qtXqQLxbNkpGnF9DH/9275a437770169237fa27903599c272c/DR-Issue-070126-2.png" alt="WHEAT" width="540px" />
Commodity prices tend to move in cycles. Oversupply leads to low prices. Undersupply leads to high prices. And we are firmly in the undersupply situation. Competition for the available supply will drive prices up.
That&rsquo;s the opportunity for investors today. This isn&rsquo;t an overnight 20% trade. This is a several month, double your money kind of speculation. And if the wheat price tests recent highs, it could be a 200%+ return.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/207Fizu9GjygEb0ZGQbwID/fab34bb70de17d9e6a6691869e947656/DR-Issue-070126-3.png" alt="WEAT" width="540px" />
These kinds of opportunities happen in cyclical commodities. The trick is to buy when no one is talking about the trade. When the headlines scream about soaring wheat prices, it&rsquo;s too late.
We want to buy wheat now and sell it when the price goes up. And make no mistake, this will happen. Wheat is like oil. It&rsquo;s a commodity we all buy every day. It goes into nearly everything we eat, either directly or indirectly.
Livestock can substitute grains when one gets too expensive. You cannot substitute soybeans in breads, rolls, flatbreads, noodles, pasta, crackers, cookies, cakes, pastries, cereal bars, and some other processed foods.
The reason wheat prices could soar is two-fold. First, the main supplies of wheat come from the U.S. and the Black Sea. The war in Ukraine is a material risk to Black Sea grain exports. And the other risk is weather.
The incoming super El Ni&ntilde;o is a major weather phenomenon that could impact wheat crops around the world. Historically, these events bring dry conditions to wheat producers in Australia and Asia. Reduced global supply at a time when U.S. productions are at extreme lows will add upward pressure to the price.
The risk in this trade is that there is plenty of wheat on the market right now. The lack of wheat will hit later this fall. And that&rsquo;s when I expect to see the price climb.
The best way to profit from the coming wheat shortage is by owning the Teucrium Wheat Fund (WEAT). It's an ETF that holds wheat futures.
If the wheat shortage is as bad as I expect, WEAT could double over the next 6 months or so. The risk/reward ratio here looks excellent.

DR-Issue-070126-Featured

The Next Big Commodity Winner

The headlines are screaming that gold is falling.
And it&rsquo;s true. The price dipped below $4,000 per ounce for the first time since November 2025.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/1FWTDSAKKmq7w5akXpjUmL/23a7427b97faf03c304451936e5c04ff/dr-img1-06-24-26.png" alt="image 1" width="540px" />
This seems backward. There are multiple wars going on in the world. Fuel prices are high. Gold is supposed to be the &ldquo;safe haven&rdquo; asset. Why isn&rsquo;t it going up?
Well, as analysts from LPL Financial, the largest broker-dealer in the U.S. said, gold is doing what it&rsquo;s supposed to do. It&rsquo;s acting as financial insurance.
Analysts at giant bank, Goldman Sachs estimated that if the war lasted into April, it would cause economic contractions.
<ul>
<li>UAE: -3%</li>
<li>Saudi Arabia: -5%</li>
<li>Kuwait/Qatar: -14%</li>
<li>Iran: -15% (IMF estimate)</li>
</ul>
In addition, countries like Egypt, Tunisia, Iraq, and Turkey have fragile economies. They can&rsquo;t afford to have fuel costs spikes. Because oil is priced in dollars, something these countries don&rsquo;t have enough of, higher prices create severe economic disruptions.
Turkey faced soaring inflation due to high fuel costs. The country&rsquo;s central bank sold gold to offset the impact. Turkey sold $3 billion&rsquo; worth of gold in a single week in March.
This is gold as an insurance policy. When your economy runs on oil exports that don&rsquo;t get delivered or you can&rsquo;t afford the soaring fuel prices, you cash in your insurance policy&hellip;gold.
That&rsquo;s what&rsquo;s going on in many countries today. Instead of storing value, gold is sold to create liquidity. And so much of it got sold that it pushed the price down nearly 35%.
And as you would expect, falling gold prices are sending shock waves through the mining industry. As you can see below, the VanEck Gold Miners ETF (GDX) is down nearly 35% since March 2026:
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/73CLw2ZKyWEys6Cz1HMF0x/f2e8cb2c603a8694e5c1585f94b4732c/dr-img2-06-24-26.png" alt="image 2" width="540px" />
This is a combination of falling gold prices and investors taking profits. From January 2025 to March 2026, GDX rose 240%. That&rsquo;s a lot of profit to be cashed in. And investors are taking that money off the table.
That&rsquo;s good news for gold investors because it will create buying opportunities. These gold miners still make a ton of money. So, the price to earnings ratios are even lower now than before.
But I have my eye on the development projects. And as gold prices fall, it will send those stocks down even further. These are the companies building new mines. They have no revenue and need money to build their mines. For many analysts, that presents too much risk.
But to me, that&rsquo;s an opportunity. Remember, all the current mines are running out of metal. They need to replace them with new mines. That&rsquo;s why the development projects are so valuable. And they don&rsquo;t lose their long-term value because of a short-term dip in the gold price.
And make no mistake, this dip won&rsquo;t last long. It took massive selling to push it down this far. I expect to see a huge rebound soon, as those sales trickle down.
For those of you who love gold, this is an opportunity to add physical at a great price. For those of you who like speculations, the gold stocks are ripe for the taking. Use this dip to add to your positions or build a whole new portfolio.
You don&rsquo;t get these opportunities often. Recognize this one and use it to make some money.

dr-hero-img-06-24-26

A Golden Opportunity Just Appeared

Silt and anchovy scales.
Sometimes the greatest scientific discoveries start with the simplest things.
Today, meteorologists are worried about a severe global event. It&rsquo;s part of an atmospheric pattern that wasn&rsquo;t recognized until the late 1960&rsquo;s. But it has had major economic impact over the decades. And it will have an impact this year if it&rsquo;s as bad as predicted.
But the story starts with marine mud and frustrated fishermen.
Geologists saw something odd in sediment cores taken off the West coast of South America. The cores looked like layer cakes. One layer of mud, another of fish scales&hellip;repeated through the core.
The layers reflect massive shifts in weather patterns. But it wasn&rsquo;t understood until the late 1960&rsquo;s. That&rsquo;s when Jacob Bjerknes, a Norwegian American meteorologist, linked the marine sediment record with atmospheric observations. He recognized that the ocean and atmosphere acted in a feedback loop that had dramatic impacts on the land.
The formal term is the El Ni&ntilde;o, Southern Oscillation, or ENSO. It gets its name from Peruvian fisherman. They called the warm currents that sometimes occurred around Christmas &ldquo;El Ni&ntilde;o&rdquo;.
What Bjerknes described was the change in surface water temperatures in the Pacific Ocean. When warm water hits Peru around Christmas, it rains. A lot. The rivers flood down from the mountains and drop an impressive amount of sediment.
The image below shows the warm Pacific from the 1998 El Ni&ntilde;o event, compared to the cool period (called La Ni&ntilde;a):
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6zfga9mIoePgOHy24Xv0mL/2255d3667d18ccf5e08573c14942110f/dr-img1-06-16-26.gif" alt="image 1" width="540px" />
The Peruvian fishermen hated these warm currents, because the fishing was terrible. The warm water and strong rains disrupted the local food chain.
Normally, the cold, nutrient rich Humboldt current wells up against the coast. The nutrients feed massive schools of anchoveta and other bait fish. During these periods, the sediments become silvery layers of fish scales and biological debris.
That&rsquo;s how geologists learned to track atmospheric events. It was a huge breakthrough for scientists. But it also had economic implications.
<h2 class="centered subhead" style="text-align: center;">Major Impact</h2>
In modern times, two massive El Ni&ntilde;o&rsquo;s, in 1972 and again in 1982, devastated fish populations. Before 1972, Peru was the largest fishing nation in the world. In 1970, the country caught 12 million metric tons of anchoveta. Then a massive El Ni&ntilde;o hit and crushed the fishing industry. The combination of over-fishing (to make up the catch) and the weather devastated the fishery.&nbsp; In 1973, they landed 2 million metric tons. This caused a global fish-meal crisis. It drove agricultural feed up 250%.
However, the 1972 version was just a warmup. The real monster El Ni&ntilde;o hit in 1982. This was an unprecedented weather disaster. Warm tropical waters pushed further south than ever before. The warmth stayed so long that it either killed off or forced cold water fish to migrate to other locations.
This time, the damage wasn&rsquo;t limited to South America. Fishermen along the eastern side of the Pacific saw reduced catches of critical species. Tuna, smelt, mahi mahi, barracuda and other species suddenly show up in places they are never seen.
Here&rsquo;s what the National Oceanographic and Atmospheric Administration says about strong El Ni&ntilde;o and fish populations in California:
<blockquote>
A major consequence of an El Ni&ntilde;o is the loss of commercially important species where they traditionally occur. A notable example is the movement of the market squid to cooler waters to the north, away from established fisheries in California. This phenomenon is also true for many rockfish species that move from nearshore areas to deeper or more northerly and cooler waters. Pacific whiting likewise shift northward from their spawning and feeding areas off California, Oregon, and Washington to the more temperate latitudes centered off Vancouver Island.
</blockquote>
And that&rsquo;s only part of the economic impact of a strong El Ni&ntilde;o. As we mentioned earlier, El Ni&ntilde;o brings rain to the west coast of Peru. That can disrupt mining, along with fishing. But it does more than that. Here&rsquo;s a general map of weather patterns associated with El Ni&ntilde;o (from NOAA.gov):
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/79dZk1QrraEXps4jY7mp39/10431bbb83926a8b7eb6a75c89249a0d/dr-img2-06-16-26.png" alt="image 2" width="540px" />
The international monetary fund (IMF) tracked the real impact of El Ni&ntilde;o on GDP growth around the world. They found that countries like Australia, India, Indonesia, New Zealand, Peru, and South Africa face a short-lived fall in economic activity in response to an El Ni&ntilde;o.
The study also noted that El Ni&ntilde;o brings strong storms to Chile, which disrupts copper mining. Japan sees more typhoon strikes.
El Ni&ntilde;o does have some benefits for North America. California usually gets more rain, which helps the farmers. The Northeast sees warmer winters, so it uses less energy. And the east coast sees fewer hurricanes. In fact, there are zero recorded major hurricane strikes on the East Coast of the U.S. during El Ni&ntilde;o...except Florida.
Hurricane Andrew struck Miami as a massive category five storm in August 1992. It&rsquo;s unusual to have the first named storm that late in hurricane season.
If the forecast severe El Ni&ntilde;o comes to pass, we can expect food inflation on things grown internationally. If history is correct, coffee, palm oil, and wheat will go up in price. And we can expect some local problems from flooding and severe weather.
It&rsquo;s not enough to speculate on just yet, but there could be some short-term trades from this oddball weather phenomenon. We&rsquo;ll keep an eye out.

dr-hero-img-06-16-26

Silt, Anchovies, and Economic Disaster

All eyes are on oil thanks to the war in Iran. It gets all the headlines.
Talking heads debate shortages and supplies. But out of the spotlight, copper is ripping higher. It&rsquo;s near an all-time high now:
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/5JMgTXFZkXb51w8Qz699ed/f6401e8460037c2476a3f3bb1be59a6e/dr-img1-06-04-26.png" alt="image 1" width="540px" />
This isn&rsquo;t a new story. It&rsquo;s the reason I jumped at the chance to run a junior copper explorer back in 2022. I knew that a copper bull market was coming. I was too early. But as an investor, the timing is perfect.
Some folks look at the chart and thing, &ldquo;I missed it.&rdquo; But here&rsquo;s an example of what happened during the last copper bull market:
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3jVYybrChsdUt8HeaY100Q/62b68cc68745b244936767fd17b495a1/dr-img2-06-04-26.png" alt="image 2" width="540px" />
We used Freeport McMoRan (FCX) as a proxy for the major copper producers at the time. Coming out of the crash, Freeport&rsquo;s shares ran 400% from January 2009 to January 2011. The price of copper exploded 225% higher.
Now compare that to the last two years:
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2Q21FLg4zmjoIDHEpSM0n6/02fd3af0586e5d530a33c58aa51ea66f/dr-img3-06-04-26.png" alt="image 3" width="540px" />
As we can see here, Freeport&rsquo;s shares didn&rsquo;t start to rally until April 2025. Since then, they rose about 130%...well below the performance from 2009. And copper prices are only up about 45%...
That leaves us plenty of room for bigger gains.
And even if the copper prices stop rising for now, copper producers are about to generate massive cash flows. This will be the start of a massive round of consolidation, exploration, and development.
And it won&rsquo;t be enough.
It takes nearly two decades to take a copper discovery to production. And thanks to nearly a decade of under investment from 2012 to 2023, there have been far too few new discoveries.
According to the analysts at S&amp;P Global, new discoveries fell 90% since 1990. Since 2021, only six discoveries meet the &ldquo;major discovery&rdquo; criteria. And all the new production scheduled to come online between now and 2030 will only cover about 80% of expected demand.
That math is impossible to argue. We need copper to live a modern life. If you want the lights to come on when you flip the switch&hellip;you need copper. If you want to use ChatGPT or any other AI for that matter, you need more copper.
It doesn&rsquo;t all have to be new, though. Recycling will add some back into the system. But you can&rsquo;t recycle enough to meet the projected demand.
That means the price of copper must go up. And as we saw from the chart above, that&rsquo;s already underway. However, the earnings growth hasn&rsquo;t been priced in yet.
That&rsquo;s why we want to buy now, even though these stock prices appreciated significantly. There are a couple of ways to own these stocks. For generalists who want some exposure to quality miners, the Sprott Copper Miners ETF (Nasdaq: COPP) is perfect.
COPP holds a basket of the world&rsquo;s largest miners (percentages are estimates):
<ul>
<li>Freeport McMoRan (26%)</li>
<li>Teck Resources (11%)</li>
<li>Antofogasta (9%)</li>
<li>Hudbay Minerals (5.5%)</li>
<li>KGHM Polska Miedz (5.5%)</li>
<li>Lunding Mining (5.3%)</li>
<li>Southern Copper (4.7%)</li>
</ul>
These are giant copper producers that will absolutely benefit from the rising copper price. However, for investors with more risk tolerance, there&rsquo;s the Sprott Junior Copper Miners ETF (Nasdaq: COPJ). This holds the smaller, &ldquo;up and coming&rdquo; copper companies:
<ul>
<li>Arizona Sonoran (6.3%)</li>
<li>Faraday Copper (5.9%)</li>
<li>Taseko Mines (5.2%)</li>
<li>Firefly Metals (4.8%)</li>
<li>Solaris Resources (4.7%)</li>
<li>Minsur (4.6%)</li>
<li>Osisko Metals (4.4%)</li>
<li>ERO Copper (4.3%)</li>
</ul>
As you can see, there are much smaller portfolio memberships, which gives them more members. The exposure to these smaller companies gives them more opportunities to benefit from both production and discovery. Higher risk, but potentially higher reward as well.
These funds did well over the past year, but they have room to move. So, if you don&rsquo;t have exposure to copper yet, you should get some now. Because, while oil gets all the headlines, copper is about to explode.

dr-hero-img-06-04-26

Don’t Buy Oil, Buy this Critical Commodity Instead

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Economic News, Markets Commentary, Gold, Oil and Investing Strategies.

Articles by Matt Badiali