Three Things (9/19)
Sep 19, 2022
“There is no friendship in trade.” - Cornelius Vanderbilt
1) A rush to royalties: Undervalued for nearly a decade, surging commodity prices are drawing investors' attention to an asset class long forgotten and overshadowed by mining operations. Companies like Glencore PLC, RIO Tinto PLC, and South32 LTD. are reaping millions of dollars in sales from these royalties. Activity in the sector is booming, with South32 recently selling a package of royalties for ~$200 million in cash and stock and Sitio Royalties and Brigham Minerals announcement to merge earlier this year.
Titan's Takeaway: Once a sleepy and outmoded sector, royalty transactions are booming as metals - such as copper - are viewed as essential for the energy transition, while many view gold as a hedge against inflation. With the Fed likely to continue to raise rates, mining companies might continue to turn to royalty agreements to fund projects as it becomes increasingly difficult to find capital in debt or equity markets.
2) U.S. rail strike averted: The 11th-hour deal between major freight rail operators and two large unions thwarted what would have been the first major rail strike in thirty years. The unions - the Brotherhood of Locomotive Engineers and SMART Transportation Division - secured a significant concession from the operators allowing employees to take unpaid time off work for preemptive medical care. In recent years, rail operators have cut workforces, running trains with fewer personnel, and seeing profit margins increase substantially.
Titan's Takeaway: With 40% of long-distance goods relying on the nation's rail system, the strike would have put enormous pressure on the supply chain of numerous industries, leading to price increases for consumers already dealing with entrenched inflation. For now, the trains continue running, but the rail strike is reflective of a more significant labor action movement spreading across the country.
3) Indian industrialist surpasses Bezos: Gautam Adani surpassed Jeff Bezos as the world's second-richest person, trailing only Tesla's Elon Musk. According to Bloomberg's Billionaires Index, Adani's wealth surged to $147 billion. Adani, the chairman of an India-based conglomerate, is involved in projects spanning green energy power and gas distribution.
Titan's Takeaway: It really isn't kosher to champion wealth for wealth's sake, but Adani's rise to the second-richest person in the world is notable as he is the first person from Asia who has ranked so high. The wealth index, long dominated by U.S. business magnates, is becoming more globally diverse, speaking to the growth of economies, and opportunities, across the globe.
Cash Management
© Copyright 2024 Titan Global Capital Management USA LLC. All Rights Reserved.
Titan Global Capital Management USA LLC ("Titan") is an investment adviser registered with the Securities and Exchange Commission (“SEC”). By using this website, you accept and agree to Titan’s Terms of Use and Privacy Policy. Titan’s investment advisory services are available only to residents of the United States in jurisdictions where Titan is registered. Nothing on this website should be considered an offer, solicitation of an offer, or advice to buy or sell securities or investment products. Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections are hypothetical in nature and may not reflect actual future performance. Account holdings and other information provided are for illustrative purposes only and are not to be considered investment recommendations. The content on this website is for informational purposes only and does not constitute a comprehensive description of Titan’s investment advisory services.
Please refer to Titan's Program Brochure for important additional information. Certain investments are not suitable for all investors. Before investing, you should consider your investment objectives and any fees charged by Titan. The rate of return on investments can vary widely over time, especially for long term investments. Investment losses are possible, including the potential loss of all amounts invested, including principal. Brokerage services are provided to Titan Clients by Titan Global Technologies LLC and Apex Clearing Corporation, both registered broker-dealers and members of FINRA/SIPC. For more information, visit our disclosures page. You may check the background of these firms by visiting FINRA's BrokerCheck.
Various Registered Investment Company products (“Third Party Funds”) offered by third party fund families and investment companies are made available on the platform. Some of these Third Party Funds are offered through Titan Global Technologies LLC. Other Third Party Funds are offered to advisory clients by Titan. Before investing in such Third Party Funds you should consult the specific supplemental information available for each product. Please refer to Titan's Program Brochure for important additional information. Certain Third Party Funds that are available on Titan’s platform are interval funds. Investments in interval funds are highly speculative and subject to a lack of liquidity that is generally available in other types of investments. Actual investment return and principal value is likely to fluctuate and may depreciate in value when redeemed. Liquidity and distributions are not guaranteed, and are subject to availability at the discretion of the Third Party Fund.
The cash sweep program is made available in coordination with Apex Clearing Corporation through Titan Global Technologies LLC. Please visit www.titan.com/legal for applicable terms and conditions and important disclosures.
Cryptocurrency advisory services are provided by Titan.
Information provided by Titan Support is for informational and general educational purposes only and is not investment or financial advice.
Contact Titan at support@titan.com. 508 LaGuardia Place NY, NY 10012.