HardAssetsInvestor

Mike Norman (Norman): Hi everybody, and welcome to HardAssetsInvestor.com. I’m Mike Norman, your host. Today I’m going to be talking to the mercenary geologist, Mickey Fulp, of MercenaryGeologist.com. Mickey, thanks a lot for coming on the show. So you’re the mercenary geologist. What’s that all about?

Mickey Fulp, MercenaryGeologist.com: Well, Mike, most geologists are for hire. And a mercenary is essentially someone that’s for hire. And it’s usually applied to a mercenary soldier. But I’ve been a consulting geologist for 23 years now. And I’m essentially for hire.

Norman: Now mainly, you focus on mining stocks, the outlook for metals. Tell us a little bit about the outlook right now. I know that you’ve been involved in these markets for a long time. You must be very impressed with recent price increases. But, as a pro, do you look at this and say, “It’s getting a little frothy here”?

Fulp: Absolutely. Especially, I would say, the copper market right now is about as frothy and as risky as you can get.

Norman: Based on what? I mean, are the fundamentals saying, in copper, that the price is just way too high?

Fulp: Well, I’m kind of a fundamental supply/demand guy. Certainly there is a tight market for copper right now. And whether we are in supply deficit or surplus over the next couple of years is basically a flip of the coin. Supplies are tight, but does that really deserve a record price for copper? I would say no; $452 is the latest copper futures price I saw.

And I would be very comfortable with a 10 or 20 percent correction in the copper market right now. I personally think it’s coming. Now, I said that a month ago, and it hasn’t come to pass. I would not want to be long copper; I would not want to be short copper right now. I think it’s a market …

Norman: … on the sidelines.

Fulp: Yes, on the sidelines. Absolutely.

Norman: Are you surprised? You’ve been doing this for a long time. A lot of your clients and the people who you consult for − mining companies and people in the trade − are you surprised by the numbers of individual investors who have woken up to commodities and hard assets now? Do you see that at all ebbing? Or is it just continuing to grow?

Fulp: Well, although I’m probably a short-term bear for some commodities markets right now, I am very much a long-term secular bull. So the retail investor, let’s say, is starting to wake up to commodities. But you look at supply and demand fundamentals in emerging market countries and the so-called BRIC countries − well, I would probably take Russia out of that and stick Indonesia in, and call them the BIIC countries − but certainly, the long-term demand for commodities is there. And as geologists and engineers, we are not finding and developing enough big mines.