Thursday, December 23, 2010

Goldman Sachs: Buy Zinc

Been there...
From our 2008 post "Buy Tin":
I couldn't help thinking of the Barney Miller episode "Child Stealers":
Time traveler "Adam Boyer" comes back from 2057 and is hounded by Harris for stock tips:

    [Harris, acting on a tip from a "twinkie" claiming to be a Sociology Professor from Columbia University who's traveled back in time from the year 2057, calls his broker to transfer his assets from gold bullion to the financial standard of the future--Zinc!!]:

    ", no blue chips, either...I was thinking about Zinc! (pause) Yeah, Zinc! What's it goin for these days? (writing the figure on a notepad)...Thirty seven and a half cents---a POUND?? (The "Professor" gives Harris an encouraging nod)...Yeah, well, I might be willin' to spring for a coupla TONS!"...
So who will garner the nom de hoard Zincfinger?
That episode aired in January 1980. Since then zinc has outperformed gold by almost 2:1.
From MarketBeat:
Copper’s 27% run in 2010 has a lot of people wondering what might be the next metal to make a major move. Goldman Sachs metals analysts led by Sal Tharani have an idea. They wrote in a note yesterday:
Zinc along with copper is more cyclically leveraged to stronger near-term demand from construction and hence will benefit from the increased Chinese demand. Also, we believe that zinc can be the next copper with periods of deficit starting in 2011 and worsening in 2012.
Zinc has been something of a laggard in the world of metals this year. It’s down 9%, meanwhile the CRB spot metals index is up a cool 22%. Devout Marketbeat minions know we’ve become much more skeptical of Dr. Copper’s prognosticatory powers since he seems to be increasingly under the sway of ETFs....MORE
I might be willing to spring for a coupla tons.
I follow zinc in part because gallium is a mining byproduct.
See also:
The mystery investor who is turning the tin market on its head
Betting on a Metal-Air Battery Breakthrough 
Supply concerns pushing Zinc's outperformance (Abe Vigoda Is alive!) 
"Buy Zinc" (Not Really)