Trades Today

I took off about 30% of my Impala Platinum. It's had a nice run. If it comes off I'll buy it back, if not - too bad.
Going to add some Cameco (CCJ). I'm still bullish on uranium, but it's going to be a long slow climb. So only buy the dips.

Someone commented in the last post about the correlation between platinum and gold. I simply used the correlation of the daily returns of GLD and PPLT. In fact, if you strip out the overall commodity correlation, the true relationship is even lower.

More on Platinum Group Metals

I wrote an article for Seeking Alpha on the platinum group, here. The net is that all the supply/demand stats are pretty bullish, especially for palladium. I'm going to write another giving my picks to buy, but the short of it is I'm long Impala Platinum (IMPUY). It has about 25% of its revenue from palladium at current prices, and has a strong leverage to commodity prices. I started buying at $3.09 and finished at $3.33.
The interesting question here is the future of the internal combustion engine. If virtually all cars will continue to use it, we will need a lot more investment in platinum-group capacity. OTOH, if there is a massive switch to electric, we won't need it. So far electric cars are still a fringe market, but who knows? It probably depends on the future price of oil, which I am pretty neutral on.
One more interesting thing: the correlation between gold and platinum has dropped a lot. Back in 2010, the correlation was about 80%. Now it's only 54%.