Resource Nationalism Hedge
krinza@kay
The idea
I think political instability is going to keep spreading, with more countries drifting toward nationalizing mines, oil fields and foreign-owned businesses. I can't bet on politics directly, so I built this to own what gains from that chaos instead: gold as the classic safe haven, miners and energy producers based in stable countries like the US, Canada and Australia whose resources become more valuable as others get seized elsewhere, and Western defense contractors that benefit from rearmament.
What will be bought
- Gold typically rises when political instability erodes investor confidence in government institutions and currencies. · SPDR Gold SharesIt tracks gold prices, which tend to rise when political shocks reduce confidence in government institutions and fiat currency., Agnico Eagle MinesIt operates mines in Canada and other stable countries with low risk of government seizure, so it profits when gold prices rise during political uncertainty., Newmont CorporationIt is the world's largest gold producer, so profit margins expand significantly when gold prices climb during periods of political instability., Wheaton Precious MetalsIt receives royalty payments from gold and silver mines without operating them directly, allowing profit growth as precious metal prices rise during political uncertainty., Franco-NevadaIt collects royalties from many mines across different countries and regions, diversifying risk while profiting from higher precious metal prices during geopolitical stress.30%
- Mining supply from stable democracies becomes more valuable when governments elsewhere seize resource operations. · Cameco CorporationIt mines uranium from Saskatchewan while most global supply comes from less stable countries, making Canadian production more valuable during geopolitical tension., BHP GroupIt operates major mines in Australia and other secure jurisdictions, making its supply more valuable when governments elsewhere nationalize their resources., MP MaterialsIt operates the primary US rare earth mine, gaining strategic importance as China controls most global supply and geopolitical competition intensifies., Teck ResourcesIt mines copper from Canada, a stable jurisdiction, making its production more valuable when governments elsewhere restrict or seize their mining operations., Rio TintoIt mines iron ore and copper mainly from Western Australia and allied countries, gaining value as supply from less stable regions becomes less reliable.25%
- Geopolitical rivalry drives sustained demand for advanced weapons systems and military technology among allied nations. · Lockheed MartinIt makes fighter jets and long-range missiles that Western governments purchase in greater quantities when facing a larger geopolitical competitor., Northrop GrummanIt builds stealth aircraft and nuclear deterrent systems that receive sustained funding when the West faces growing military competition., RTX CorporationIt produces air defense systems and precision munitions that allied nations order in higher volumes during periods of increased geopolitical tension., General DynamicsIt builds submarines and armored vehicles for the US Navy and Army, receiving larger orders when Western nations increase military spending in response to competition., L3Harris TechnologiesIt supplies radios, sensors and satellite systems used across military weapons programs, benefiting when allied defense budgets expand.24%
- Oil and gas from stable democracies gain strategic value when supply from less predictable regions faces disruption. · Canadian Natural ResourcesIt extracts oil from Canadian oil sands in a country unlikely to nationalize resources, making its supply increasingly valuable when other producers face seizure risk., EQT CorporationIt produces natural gas from the US for domestic use and export, supplying energy allies from a stable country when they seek alternatives to unfriendly suppliers., Cheniere EnergyIt exports US natural gas to Europe and Asia, providing allied nations with energy from a stable supplier as they reduce dependence on unfriendly countries.13%
- Cash8%