I have watched the stock market since the 1970s. Never in my life have I seen so many people think a recession was coming before. Yet this has gone on for about 9 months, and no recession. In fact, when recessions do come it is normally when people are optimistic. The below charts confirm my perception is the case.

"Since 1973, the National Federation of Independent Business (NFIB) has been polling small businesses on their outlook on the U.S. economy and business conditions in general. In April, the NFIB’s Optimism Index sank to 89, the lowest reading in a decade and, as the organization points out, the 16th straight month below the 49-year average of 98.

When asked if the next three months were a good time to expand, only 3% of small businesses said yes in April—meaning 97%, or nearly all, said no. This is slightly up from 2% in March, but on a three-month moving average, the reading is 3.7%. That’s the lowest point since March 2009, when the S&P 500 bottomed during the financial crisis."  This quote is from an article that thinks things will get worse but provides valuable info.    

Could we have 2 recessions in 3 years? Maybe that happened in late 1970s-80. Well, it just happened, in 2020 and 2022. In 2022 2Qs in a row of lower GDP, the classical definition of a recession. Yet a politician declared the rules did not count anymore and news organizations, who are aligned with him, went along and pretended it did not happen. Will we have 3 recessions in 4 years? We had none for the 11 years before that. To the best we know the USA has never had 3 recessions in 4 years. Yet as the chart above shows 97% think now is not a good time to grow a business, they are fearing recession.

We have never had a Covid like shutdown in USA history. Commodity demand boomed coming out of that. China is the biggest commodity user in world, and they just ended a far longer shutdown. So that should cause an even bigger boom in demand, and it is starting already.

Supply? Copper has lowest stockpiles to use ratio ever is an example. Bringing on copper and nickel mines, etc. is super slow, and oil is also slow, but faster than copper.

I agree commodities look great here, and their producers. Canada oils are maybe the cheapest and highest potential stocks out there. 1 to 3 PEs, high growth and high dividends. An example is Cardinal Energy. It has a monthly dividend yield near 1% and is about 3 PE. That is after it has 20 bagged for me since 2020. Maybe you are doing the math on that now, yes that means I am getting near 200% dividends per year on my investment, on top of the 20 bagger.  I bought more Cardinal this week.

For non-oil commodity super cycle, think that Globex is a safe and it is super leveraged to the upside only. There is no leverage to the downside. They have cash to their ears, no debt and own over 200 mineral deposits. Maybe 30-40? will be built in the next cycle and they have huge royalties on them, often 3% gross. They wheel and deal these deposits regularly.  Wrote them up here.

So, to sum it up why would we go into a commodity recession, after 2 recessions in 3 years and with the biggest user just ending the biggest lockdown likely ever in world history?

Something to think about, when we are hearing the opposite over and over. During the worst of Dotcom crash that started in 2000, in which the NASDAQ crashed about 90%, people were less frightened than today. Imagine what will happen if we go from 3% thinking the future is OK to a still dismal 21% thinking so? It would be 7 times more businesses investing to expand and thus increasing commodity demand a great deal.

Cheers