“Elementary, my dear Watson, elementary!” – Sherlock Holmes
One of my favorite lines from The Maxims of Wall Street is found on Page 158: “To make it, concentrate; to keep it, diversify.”
There’s much wisdom in this one sentence.
During your working years, you concentrate on your business, but when you retire, you do everything you can to keep your hard-earned wealth and make your investment nest egg grow.
That means NOT putting all your eggs in one basket. (See Page 160.)
I’ve met too many retirees who got carried away investing in some “can’t lose” penny stock and got wiped out.
Today, I believe some of the most compelling stocks in the market are those involved with commodities. You never want to bet the farm… but there’s good reason to be bullish on this space.
Here’s the story.
As many of you know, President Donald Trump is doing something no president has done in decades: He’s engaging in an industrial policy.
The Trump administration has begun taking direct stakes in companies that control materials that are critical to national security. The White House fears that in a war against Russia, China, or some other foe, essential commodities will become scarce and unavailable.
When Trump announces that the government is investing in a company, those stock prices skyrocket.
For example, in August, when the U.S. government took a 10% position in Intel (Nasdaq: INTC), the chipmaker, the stock was at $20 a share. By mid-January, it was over $50.
When the government took a position in MP Materials (NYSE: MP) last year… it shot up 216% in four months.
When the U.S. took a 10% stake in Lithium Americas (NYSE: LAC)… it tripled in three weeks.
When it took a 10% stake in Trilogy Metals (NYSE: TMQ)… the stock launched 388% in just eight days.
Every major market move starts the same way.
Quietly.
Long before the headlines… before the cable news debates… before Wall Street analysts scramble to upgrade their price targets… a handful of insiders position themselves early.
That’s exactly what I believe is happening right now.
If the Trump administration continues to move in on these kinds of stocks, it could create more sudden moves.
For these stocks that are tied to government-backed strategic resources, the results are dramatic.
The stocks don’t drift higher slowly. They reprice instantly.
That’s because government involvement does three things at once:
- Validates the asset
- De-risks the project
- Signals long-term demand.
And now, all the signs suggest the next target could be nickel.
America Has a Nickel Problem
Here’s the uncomfortable truth most investors don’t realize: The United States is dangerously dependent on foreign nickel supplies.
Indonesia, Russia, and China dominate global production. Meanwhile, American industries that cannot function without nickel are expanding at breakneck speed.
Nickel is a critical input in Tesla‘s (Nasdaq: TSLA) higher-energy-density batteries, particularly those used in long-range vehicles and future platforms. As Tesla has scaled, it has become increasingly aggressive about locking in raw-material supply, rather than relying on spot markets or overseas intermediaries.
But this is about more than just electric vehicles. Think about aerospace manufacturing… advanced weapons systems… and AI chips and data centers.
Every one of them requires massive amounts of nickel… but America cannot provide adequate supply.
Keep an eye on the administration’s next moves. Following them could give a serious boost to your portfolio.