Research Report ►(comments)

Commodity prices change when there are unexpected changes to supply and demand of the target commodity. WikiWealth tries to predict these unexpected changes by examining the companies, which supply and demand the commodity (See Fundamental Commodity Analysis). When demand potential is greater then supply potential, then prices will increase; the opposite is also true. WikiWealth's Main Street Analysis captures - along with user help - the impact of supply and demand changes by analyzing the commodity's importance. In general, the more important the commodity, the faster the price will increase when commodity demand increases. A "Buy" rating from both approaches mean the commodity has high potential to increase in value.

Copper Summary

Copper Commodity Analysis ► (edit / improve) Copper is a widely used decorative and anti-bacterial compound. Copper is also a good conductor of heat and electricity. Commodity: Copper is rated a Hold. Both copper demanders and suppliers have potential to increase in value. Investor Survey: Copper’s long term growth potential is very favorable due to high scores on difficulty to expand short term supply, sensitivity to price changes and the SWOT analysis. SWOT Analysis: Strength: Copper has a limited supply and a wide array of uses. Opportunity to grow: Copper’s self cleaning properties have the potential to increase growth in the future; Threats to growth: Copper’s diminishing supply could hurt growth as substitutes become more appealing. Trading Strategy: The commodity analysis hold rating indicates that copper should stay roughly the same over the short term, whereas a very favorable investor survey means copper may increase in price over the long term.

Investment Impacts (help)

Chile Country Analysis ► (edit / improve) Chile (CLP) occupies a large portion of South America’s western coast. They have a well governed, capitalist economy with a significant reliance on Copper exports. Currency: the Chilean currency has the potential to increase in value according to the purchase price party. Investor Survey: the economic environment is favorable for long term economic growth due to high scores on economic freedom, government stability and SWOT attributes. Trade: Brazil, Japan, and USA are the top trading partners, while the leading exports are copper and silver. Commodity: Chile’s main export is copper; they are also the largest producer in the world. Much of Chile’s economic development depends on the utilization of copper. SWOT Analysis: The leading strength is Chile’s government fiscal policy, while the main weakness is the quality of education. Renewable energy offers significant opportunities, but environmental deterioration is a potential threat. Trading Strategy: An undervalued currency, favorable business environment and favorable strengths and opportunities lead to a positive outlook for Chilean investments.

China Country Analysis ► (edit / improve) China (CNY) is a fast growing communist country with the largest population in the world. Currency: China’s currency is moderately undervalued. Purchase price parity shows that China’s currency is approximately 40% undervalued, however, the other three valuation approaches show that China is fairly valued. Investor Survey: China’s economic environment is very unfavorable for long term economic growth due to the lack of economic freedom, government transparency, and the SWOT analysis. Trade: Indonesia, Pakistan, Norway, Singapore, Europe, the US are the top export partners, while the leading industry is industrial goods, usually for export. Commodity: China produces a significant amount of coal for use at home. The use of coal to provide energy leads to other health related problems. SWOT Analysis: The leading Chinese strength is their cheap labor, while the main weaknesses are political risk and corruption. Renewable energy has the opportunity to propel growth, while general pollution and an aging population could slow growth rates. Trading Strategy: An undervalued currency, average investment flow potential and an unfavorable business environment leads to a neutral outlook for Chinese investments.

USA Country Analysis ► (edit / improve) The United States (US) has a highly productive, capitalist economy and is the largest and most diverse market in the world. Currency: the US dollar (USD) has the potential to increase in value especially versus the Australian and Canadian dollar because of the significant potential of undervalued companies. Investor Survey: the economic environment is very favorable for long term economic growth due to high scores on economic freedom and economic diversity. Trade: China, Japan, Mexico, and Canada are the top US trading partners, while the leading export and import are electrical machinery and vehicles, respectively. Commodity: The US produces a significant amount of coal and wheat for use at home and as an export. However, the US consumes a larger amount of oil, which contributes to their trade deficit. SWOT Analysis: The leading US strength is its entrepreneurial culture, while the main weakness is high health care cost. Energy independence has the opportunity to propel growth, while the major threat is the housing crisis, which will lower growth. Trading Strategy: An undervalued currency, high investment flow potential and favorable business environment lead to a positive outlook for US investments, which will also benefit from positive international actions.

Industry Investment Impact

Industrial Industry Analysis ► (edit / improve) The industrial industry includes companies whose sales originate from the manufacturing of materials into finished goods and services. Valuation: Based on WikiWealth's Wall Street analysis, this industry is a Hold, with slightly positive potential. The Main Street analysis says a Hold with SWOT strengths much great than weaknesses and SWOT opportunities less than threats. Trade: The following countries derive much of their income from the industrial sector of the economy: Brazil, Venezuela, USA, Belgium, the EU, Germany, France, China, Hong Kong and Japan. Main industrial commodities include the following: aluminum, copper, lead, nickel, palladium, silicon, steel, tin, and zinc. Trading Strategy: The industrial industry tends to be sensitive to economic cycles. Look for undervalued industrial investments during economic recessions when stock prices are low and sell industrial investments during the late stages of a bull markets when stock prices are high. The global economy is currently in a recession, therefore, it is the perfect time to purchase industrial investments. Upward sloping stock charts and financial news may indicate a selling opportunity while the opposite means that stocks are becoming undervalued.

Material Industry Analysis ► (edit / improve) The materials industry includes companies whose sales originate from the mining, acquisition and sale of physical substances for manufacturing-related purposes. Valuation: Based on WikiWealth's Wall Street analysis, this industry is a Hold. The Main Street analysis also says Hold, with SWOT strengths much great than weaknesses and SWOT opportunities less than threats. Trade: Some of the main trade hubs include Canada, Chile, Poland, Australia, Indonesia, Pakistan, Malaysia, and South Africa, while the main material commodities include aluminum, copper, lead, nickel, palladium, silicon, steel, tin, and zinc. Trading Strategy: The materials industry tends to be sensitive to economic cycles. Look for undervalued material investments during economic recessions when stock prices are low and sell material investments during the late stages of a bull markets when stock prices are high. Material stocks quickly increase at the conclusion of a recession, because materials are the primary input for the industrial sector. The global economy is currently in a recession, therefore, it is the perfect time to purchase material investments. Upward sloping stock charts and financial news may indicate a selling opportunity while the opposite means that stocks are becoming undervalued.

- The industrial industry uses many materials to produce manufactured goods.

Technology Industry Analysis ► (edit / improve) The technology industry broadly includes companies whose primary function is to create innovative products and processes. Information technology deals with the management and processing of information. Valuation: Based on WikiWealth's Wall Street analysis, this industry is a Hold with slightly negative potential. The Main Street analysis says a Buy, with SWOT strengths much great than weaknesses and SWOT opportunities equal to threats. Trade: Global centers of innovation include: the US, India, Japan, Israel, Korea, and Taiwan, while the main technology commodities include aluminum, copper, and silicon. Trading Strategy: The technology industry tends to be sensitive to economic cycles. Look for undervalued technology investments during economic recessions when stock prices are low and sell technology investments during the late stages of a bull markets when stock prices are high. The global economy is currently in a recession, therefore, it is the perfect time to purchase discretionary investments, because business significantly increase technology investments that they postponed during the recession. Upward sloping stock charts and financial news may indicate a selling opportunity while the opposite means that stocks are becoming undervalued.

- These are some of the essential commodities that go into the production of many manufactured technologies.

Telecom Industry Analysis ► (edit / improve) The telecom industry includes companies who help transmit information for the purposes of communication. Valuation: Based on WikiWealth's Wall Street analysis, this industry is a Buy. The Main Street analysis is also a Buy, with SWOT strengths great than weaknesses and SWOT opportunities much greater than threats. Trade: Some of the main telecom hubs include india and the US, the main commodity in the telecom industry is copper. Trading Strategy: The telecom industry tends to be sensitive to economic cycles. Look for undervalued telecom investments during economic recessions when stock prices are low and sell telecom investments during the late stages of a bull markets when stock prices are high. The global economy is currently in a recession, therefore, it is the perfect time to purchase telecom investments. Upward sloping stock charts and financial news may indicate a selling opportunity while the opposite means that stocks are becoming undervalued.

- Copper is still a major material used in the production of telecom services.

Materials Industry Analysis ► (edit / improve)

Description: The materials industry includes companies whose sales originate from the mining, acquisition and sale of physical substances for manufacturing-related purposes. Read More.

Profit Analysis: The best way to profit from material stock is to find the most undervalued investments (Wall Street and Main Street buy ratings) during economic recessions. Those investments should be undervalued (see Wall Street on left side), and have high Main Street Common Sense investment ratings (see Main Street on right side). When an economic recovery occurs, material stocks tend to outperform the general stock market, because consumers and businesses must increase their inventories quickly to meet demand for manufactured goods. Consumers and business delayed purchases on items they wanted, but resisted buying during tougher economic times. Eventually, material company investments become overvalued, because profits and stock prices increase past their fair values. During the last stages of an economic business cycle, just before a recession, it is best to sell material stocks, because they are likely to decrease in price the fastest. Expensive (overvalued) stocks with low Main Street Common Sense ratings should be sold at any time to invest in better stocks. Two buys ratings are the best and two sell ratings are the worst possible stock investments.

Inflation Hedge: Changes in commodity prices affect material stocks. When commodity prices are high due to increased demand or lower supply, material stocks increase, because demand for their goods also increases. Inflation occurs when the price of goods and services increases. The price of materials are generally the first inputs into the production of goods, so changes in material prices directly affect the cost of products, which is measured by inflation. Therefore, a good hedge against inflation is to own material stock investments. When inflation increases, so do the profits of material companies, which may have directly contributed to the increase in prices.

Trading Strategy: During economic recessions, consumers tend to cut back on spending to save money. Businesses tend to cut back on investments. Industrial companies make the products bought by consumers and businesses, but to make those products, industrial companies must obtain materials. Less spending on goods decreases material business revenue and eventually decreases stock prices. During economic recoveries, consumers and businesses spend quickly to replace or catch up with quickly increasing demand. Material companies quickly receive orders from industrial companies who need to manufacture new products to meet quickly increasing demand. Higher spending increases material business revenue and eventually increases stock prices. During a longer economic expansion, consumer and business demand increases for material companies, but at a slower pace than during the recovery stage.

¹ WikiWealth only uses the largest 30 companies in each industry for the basis of these financial measures. Each statistic is the market weighted average of the 30 companies.

² Investment potential (margin of safety) is a weighted average of the discounted cash flow (DCF), the enterprise value (EV) market multiple, and the Warren Buffett investment methods.

Major Copper Producers ► Press "Edit / Improve"

Chile Country Analysis ► (edit / improve) Chile (CLP) occupies a large portion of South America’s western coast. They have a well governed, capitalist economy with a significant reliance on Copper exports. Currency: the Chilean currency has the potential to increase in value according to the purchase price party. Investor Survey: the economic environment is favorable for long term economic growth due to high scores on economic freedom, government stability and SWOT attributes. Trade: Brazil, Japan, and USA are the top trading partners, while the leading exports are copper and silver. Commodity: Chile’s main export is copper; they are also the largest producer in the world. Much of Chile’s economic development depends on the utilization of copper. SWOT Analysis: The leading strength is Chile’s government fiscal policy, while the main weakness is the quality of education. Renewable energy offers significant opportunities, but environmental deterioration is a potential threat. Trading Strategy: An undervalued currency, favorable business environment and favorable strengths and opportunities lead to a positive outlook for Chilean investments.

USA Country Analysis ► (edit / improve) The United States (US) has a highly productive, capitalist economy and is the largest and most diverse market in the world. Currency: the US dollar (USD) has the potential to increase in value especially versus the Australian and Canadian dollar because of the significant potential of undervalued companies. Investor Survey: the economic environment is very favorable for long term economic growth due to high scores on economic freedom and economic diversity. Trade: China, Japan, Mexico, and Canada are the top US trading partners, while the leading export and import are electrical machinery and vehicles, respectively. Commodity: The US produces a significant amount of coal and wheat for use at home and as an export. However, the US consumes a larger amount of oil, which contributes to their trade deficit. SWOT Analysis: The leading US strength is its entrepreneurial culture, while the main weakness is high health care cost. Energy independence has the opportunity to propel growth, while the major threat is the housing crisis, which will lower growth. Trading Strategy: An undervalued currency, high investment flow potential and favorable business environment lead to a positive outlook for US investments, which will also benefit from positive international actions.

Australia Country Analysis ► (edit / improve) Australia (AUD) has a highly productive, capitalist economy with an emphasis on commodity exports, especially to Asia. Currency: Australia’s currency is moderately overvalued with low investment flow potential and negative purchase price parity. Investor Survey: Australia’s economic environment is very favorable for long term economic growth due to high scores on economic freedom and economic diversity. Trade: Indonesia, China, Singapore, the UK and Japan are the top export partners, while the leading exporting industry is materials. Commodity: Australia produces a significant amount of uranium, gold, coal, copper, aluminum, lead, zinc, and silver mostly for export to growing Asian countries. SWOT Analysis: The leading Australian strength is their abundant natural resources, while no major weaknesses were identified. Trading Strategy: An overvalued currency, negative investment flow potential, but favorable business environment leads to a neutral outlook for Australian investments.

Indonesia Country Analysis ► (edit / improve) Indonesia (IDR) has a materials industry-based economy with significant governance issues. Currency: Indonesia’s currency is undervalued according to the investment flow and purchase price parity. Investor Survey: Indonesia’s economic environment is very unfavorable for long term economic growth due to low scores on government transparency and the SWOT analysis. Trade: China, Singapore, Japan, Korea and the US are the top export partners, while the leading industry is materials. Commodity: Indonesia produces a significant amount of palm oil, copper, tin, nickel, rice, and rubber. SWOT Analysis: The leading Indonesian strength is their abundant resources, while the main weakness is over population. Illegal logging and piracy could hurt growth in the future. Trading Strategy: An undervalued currency, high investment flow potential, but very unfavorable business environment leads to a neutral outlook for Indonesian investments.

Russia Country Analysis ► (edit / improve) Russia (RUB) is a resource rich, centralized economy with a large land mass and population. Currency: Russia’s currency is significantly undervalued according to the investment flow analysis, purchase price parity, and interest rate parity. Investor Survey: Russia’s economic environment is very unfavorable. Russia’s economic freedom, government transparency and SWOT analysis scores are very low. Trade: China, and Turkey are Russia’s top export partners, while the leading industry is energy. Commodity: Russia produces a significant amount of natural gas, coal, copper, uranium, palladium, and crude oil. Russia exports many energy products to European Union members. SWOT Analysis: The leading Russian strength is their oil and gas industry, while the main weakness is political risk. Proximity to energy hungry Europe has the opportunity to propel growth, while falling oil prices may lower growth. Trading Strategy: An undervalued currency, high investment flow potential, but unfavorable business environment leads to a neutral outlook for Russian investments.

Major Copper Consumers ► Press "Edit / Improve"

China Country Analysis ► (edit / improve) China (CNY) is a fast growing communist country with the largest population in the world. Currency: China’s currency is moderately undervalued. Purchase price parity shows that China’s currency is approximately 40% undervalued, however, the other three valuation approaches show that China is fairly valued. Investor Survey: China’s economic environment is very unfavorable for long term economic growth due to the lack of economic freedom, government transparency, and the SWOT analysis. Trade: Indonesia, Pakistan, Norway, Singapore, Europe, the US are the top export partners, while the leading industry is industrial goods, usually for export. Commodity: China produces a significant amount of coal for use at home. The use of coal to provide energy leads to other health related problems. SWOT Analysis: The leading Chinese strength is their cheap labor, while the main weaknesses are political risk and corruption. Renewable energy has the opportunity to propel growth, while general pollution and an aging population could slow growth rates. Trading Strategy: An undervalued currency, average investment flow potential and an unfavorable business environment leads to a neutral outlook for Chinese investments.

USA Country Analysis ► (edit / improve) The United States (US) has a highly productive, capitalist economy and is the largest and most diverse market in the world. Currency: the US dollar (USD) has the potential to increase in value especially versus the Australian and Canadian dollar because of the significant potential of undervalued companies. Investor Survey: the economic environment is very favorable for long term economic growth due to high scores on economic freedom and economic diversity. Trade: China, Japan, Mexico, and Canada are the top US trading partners, while the leading export and import are electrical machinery and vehicles, respectively. Commodity: The US produces a significant amount of coal and wheat for use at home and as an export. However, the US consumes a larger amount of oil, which contributes to their trade deficit. SWOT Analysis: The leading US strength is its entrepreneurial culture, while the main weakness is high health care cost. Energy independence has the opportunity to propel growth, while the major threat is the housing crisis, which will lower growth. Trading Strategy: An undervalued currency, high investment flow potential and favorable business environment lead to a positive outlook for US investments, which will also benefit from positive international actions.

Germany Country Analysis ► (edit / improve) Germany (EUR) is the largest economy in Europe and relies on a strong and sophisticated industrial base to drive their exports. Currency: Germany is part of the Euro economic zone, whose currency has the potential to decrease in value on a global scale per the purchase price parity. Investor Survey: Germany’s economic environment is favorable for long term economic growth due to high scores on economic freedom, economic diversity, and government transparency. Trade: The UK, France, and USA are the top export partners, while the leading export industry is industrial goods. Commodity: Germany imports many commodities to feed its industrial base: crude oil, coal, copper, aluminum, lead, zinc, and natural gas. SWOT Analysis: The leading German strength is their engineering expertise, while the main weakness is their declining birth rate. Trading Strategy: An overvalued currency, moderate investment flow potential and favorable business environment lead to a slightly positive outlook for German investments.

Japan Country Analysis ► (edit / improve) Japan (JPY), the second largest economy in the world, has an industrial, export oriented economy that benefits from its relationship with the USA and proximity to China. Currency: Japan’s currency (the Yen) is overvalued according to investment flow potential, the purchase price parity, and the interest rate parity. Investor Survey: Japan’s economic environment is moderately favorable for long term economic growth due to high scores on economic freedom and government transparency, but low scores on the SWOT Analysis. Trade: Indonesia, China, Singapore, the EU, Korea, and the US are Japan’s top export partners, while the leading industry is industrial manufacturing. Commodity: Japan imports many products because of its lack of arable land and energy resources. SWOT Analysis: The leading Japanese strength is their education system, while the main weakness is a declining birth rate. A major Japanese threat is the continuation of zombie companies. Trading Strategy: An overvalued currency, low investment flow potential and moderate business environment leads to a negative outlook for Japanese investments.

Korea Country Analysis ► (edit / improve) Korea (KRW) has a fast growing Asian country with a market-based economy. Currency: Korea’s currency is undervalued as a result of the purchase price parity analysis. Investor Survey: Korea’s economic environment is moderate, because high scores on economic freedom are offset by low scores on the SWOT analysis. Trade: Indonesia, China, Singapore, Japan, Hong Kong are the top export partners, while Korea’s emerging industry relates to technology. SWOT Analysis: The leading Korean strength is their shipbuilding expertise, while the main weakness is their bank cross holdings. North Korea is their main threat to long term economic growth. Trading Strategy: An undervalued currency, high investment flow potential and moderate business environment leads to a slightly positive outlook for Korean investments.

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