Weak Dollar, Hard Assets
owocki@owocki
+2.4%
since Sep 30
The idea
I believe a widening deficit keeps pressure on the dollar, showing up as sticky inflation and capital rotating out of dollar assets, so I want real assets across the board rather than one bet. The core is gold and silver miners and royalty companies, layered with energy and commodity producers, pipelines, timber and farmland, plus gold itself and international stocks as direct beneficiaries of that rotation. I hold cash to add when any layer gets cheap and treat this as a multi-year structural position, not a trade.
What it owns
- Gold producers and royalty collectors benefit when a weakening dollar pushes metal prices higher, while their operating costs stay relatively fixed. · Agnico Eagle MinesProduces gold with better cost control than most miners, so margin expands when a weaker dollar pushes the metal price higher., NewmontThe world's largest gold producer offers the broadest single exposure to the view that a declining dollar strengthens precious metal prices., Franco-NevadaCollects royalties on others' gold production, capturing upside from rising metal prices without bearing the cost inflation that mine operators face., Wheaton Precious MetalsCollects silver and gold at fixed prices from mining partners, so rising metal prices flow almost directly to its earnings without owning mines., Pan American SilverSilver tends to outperform gold during inflationary periods, and this producer moves with greater volatility than the metal itself.31%
- Pipelines, timberland and farmland hold contracts and physical property with built-in inflation escalators that raise income as prices rise. · Williams CompaniesCollects fees for natural gas pipeline transit with inflation adjusters built into contracts, raising income as prices rise., WeyerhaeuserOwns millions of acres of timberland whose value and harvest prices tend to rise alongside inflation and housing demand for lumber., Kinder MorganPipeline contracts include inflation escalators that automatically raise income when prices climb, with steady volumes supporting distributions., Gladstone LandOwns farmland and collects rents from farmers, both of which tend to rise when food inflation runs hot.17%
- Oil and gas sell in dollars globally, so a weaker currency and persistent inflation both lift revenues while long-term reserves and cost discipline anchor returns. · Exxon MobilSells oil and gas priced in dollars globally, so a weaker currency combined with inflation reprices revenue upward while the dividend provides stability., Canadian Natural ResourcesOwns decades of recoverable oil reserves in the ground, assets that compound in value as inflation keeps oil prices firm., EOG ResourcesGenerates profit at oil prices well below current levels, so it benefits from sustained inflation without requiring further price spikes.15%
- Industrial metals are priced in dollars worldwide, so a declining dollar directly pushes their prices upward across mining operations with varying cost structures. · Freeport-McMoRanCopper reprices with inflation and gets an additional boost when the dollar weakens, while large, productive mines anchor the business., Rio TintoSpreads exposure across iron ore, copper and aluminum, all priced in dollars and all repricing upward when the dollar weakens., Southern CopperOperates some of the world's lowest-cost copper mines, staying profitable even if prices moderate while inflation persists.14%
- Gold and foreign stocks typically benefit first when investors shift capital away from dollar-denominated assets in response to currency weakness. · SPDR Gold SharesGold without company operations provides the purest expression of the view that a widening deficit and weakening dollar lift precious metal prices., Vanguard Emerging Markets ETFEmerging market stocks benefit when capital rotates out of dollar assets, as a weaker dollar eases their foreign currency debt and lifts local returns., iShares MSCI EAFE ETFEuropean and Japanese stocks gain value for dollar-based investors simply from their currencies appreciating against a weakening dollar.13%
- Cash10%