Gavekal Capital: What is Dr. Copper Telling Us?

Wednesday, October 16, 2013

What is Dr. Copper Telling Us?

We track the relative performance of the cyclical sectors (consumer discretionary, financial, energy, industrial, materials, technology) compared to the counter-cyclical sectors (consumer staples, health care, telecom, utilities) to gain an insight into leadership within the equity markets. Usually copper--the metal with a Ph.D in Economics--moves in synch with the relative outperformance of the cyclicals. For the last six months, Dr. Copper has NOT been confirming the relative outperformance of the cyclicals. It should be near $4/lb. to confirm the move in cyclicals.

About Gavekal Capital

Gavekal Capital is a US registered investment advisory firm that manages the Gavekal Knowledge Leaders Strategy. Knowledge Leaders are a group of the world’s leading innovators with deep reservoirs of intangible capital. These companies often possess competitive advantages such as strong brand, proprietary knowledge or a unique distribution mechanism. Knowledge Leaders are largely service-based and advanced manufacturing businesses, often operating globally. Gavekal Capital seeks to identify the world’s leading knowledge companies through a proprietary process that analyzes corporate knowledge investments.
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