Sector Idea: What to do about Platinum and Palladium
Summary
Those of us who bought the ETFs recently have been faring so-so-ish. What next?Topics Covered
- Recent developments
- How to make money off these
Background
In the Bloomberg we read:
"Platinum jumped almost $22 an ounce Thursday on concern that miners may strike in South Africa, which accounts for almost four-fifths of global supplies of the precious metal. Palladium also gained."
This has everything to do with a pending strike in South Africa. The bottom line: there are supply fears out there.
From my limited knowledge, if I even can call it that, of metals, these two are key ones in the environmental business, particularly in diesel cars. They help clean the exhaust. Here are drivers that got me to go into P and P for my Theme Fund:
- Increasing car demand. The fact that more people are getting rich, especially in places like China, Russia, Brazil and India, tells me that there are lots more cars to be built, and
- Increasing environmental concerns. With more cars comes more stink. So the P and P metals will be in strong demand.
- Limited supply. It seem as if there just isn't enough P and P around.
How to Make Money Off This Idea
I bought the ETFs issued by ETF Securities in London. I believe that P and P ETFs won't be listed in the USA because of regulatory reasons.
But my ever-smarter wife bought the physical commodities - saving herself 5% on the ETF and the commission charged by the bank which bought the ETFs for me.
