Regal's Phil King is more bullish than ever on commodities

Despite trouble in China and rising bond yields
David Thornton

Livewire Markets

China is the world's overwhelming leader when it comes to steel production. And, by extension, it's the overwhelming leader when it comes to iron ore consumption. 

It's one of the great mysteries of today's markets, therefore, that the iron ore price be surging when China's property market is, in the words of Regal's Philip King, "a bigger bubble than bitcoin."

"There are some serious challenges for China at the moment," he believes, given an ageing population, bursting property bubble, and too much debt. 

Nonetheless, the iron ore price is what it is. And it's a bullish sign for commodities. 

"[So] we can't explain the strength of the iron ore at the moment, but I think it's very bullish for all commodities - the fact that in this rising inflation environment, with rising cost curves, commodities are holding up quite well."

Chinese property isn't the only bubble, however. Another one can be found in passive investing, and King believes this will herald a "happy hunting ground" for stock pickers. As for where he's hunting - small caps. 


........
Livewire gives readers access to information and educational content provided by financial services professionals and companies ("Livewire Contributors"). Livewire does not operate under an Australian financial services licence and relies on the exemption available under section 911A(2)(eb) of the Corporations Act 2001 (Cth) in respect of any advice given. Any advice on this site is general in nature and does not take into consideration your objectives, financial situation or needs. Before making a decision please consider these and any relevant Product Disclosure Statement. Livewire has commercial relationships with some Livewire Contributors.

2 topics

1 contributor mentioned

David Thornton
Content Editor
Livewire Markets

David is a content editor at Livewire Markets. He currently hosts The Rules of Investing, a half hour podcast where he sits down with leading experts across equities, fixed income and macro.

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.

Comments

Sign In or Join Free to comment