Home Commodities Commodities can thrive in a bear market – Andrew O’Donnell

Commodities can thrive in a bear market – Andrew O’Donnell


(Kitco News) – Markets will keep falling, according to Andrew O’Donnell, Founder and Managing Director of themarketmindset.ca. However, a careful stock picker can still find upsides in commodities. 

O’Donnell spoke with David Lin, anchor and producer for Kitco News. 

O’Donnell’s company, based in Vancouver, provides market analysis on equities, particularly those in the natural resource sector. 

He commented, “I like companies that are in a region that desperately needs the resources. So, if it’s… battery energy materials, I want copper, I want lithium in North America. And I’m… [a part of the] “in my backyard crew… because we’ve got great regulations here in Canada already.”

O’Donnell emphasized that commodities needed for green energy and 5G should be watched. 

He thinks there are three short-term risks for investors: inflation, supply chain issues, and food shortages.

O’Donnell suggested a practical step to deal with inflation. “Buy more at the store now [rather] than next month. It might be only a few dollars, but inflation is here for a while. It’s not going away… So buy more rice, buy more of your staple foods.” 

When it comes to supply chain issues, he blamed COVID lockdowns. “I know that in China, there still [are] lockdowns there,” he mentioned. “There’s a lot of ships just sitting there.”

O’Donnell believes that food shortages are also a risk. “It’s already happening… and of course the issue with Ukraine then escalates these issues beyond control, because it’s the breadbasket of Europe. But not only the breadbasket of Europe, it feeds the Middle East.”

He likes fertilizer stocks, such as Nutrien (TSX and NYSE: NTR) and Mosaic (NYSE: MOS), especially since “they’ve had exceptional returns since September.”

O’Donnell also opined on the so-called Great Reset, “If you take away a lot of the crazy wild stuff… I think most people would say that it’s about time that we had a bit of a reset…” He went on to suggest that this could result in a Central Bank Digital Currency (CBDC) and new farming practices.

To find out O’Donnell’s stock picks, watch the above video. 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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