FCX Roller Coaster

Freeport McMoran has been all over the place as of late, as has been the price of gold and copper. On Jan 6 it touched above the $30 mark, so if anyone was following since the recent low in Dec in the $19 range, it was a pretty good buck.

Commodites are all over the place right now and the big factor is demand. However, Freeport is the largest producer in the world of copper and two things come to mind when looking into the future. One, Freeport has cut back on the production of copper at these prices. Short term is won't necessarily affect the price but when demand comes back, its alot easier to stop than to start up and there will be a supply shortage. Two, demand will come back as governments all over the world have targeted infrastructure projects as a way to turn the momentum of the market. Huge construction projects in the US, Canada, China and Europe will all require alot of copper. I wonder if companies like Freeport will see a good run after Obama's launches his stimulus plan.

And of course, don't forget about Gold as the hedge to the upcomming hyper inflation from all the governments printing money. It will take some time to feed into the system, but the US government seems bound and determined to devalue their currency. The inflation play may be the biggest investment play for the next ten years.