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I originally bought FCX in 2000, just after the bubble burst on Technology. At the time I wanted a gold stock, and Freeport McMoran was cheap, just over $13 a share, and was listed as the owner of the largest gold mine in the world.
Being an unsophisticated rube, it hit all of my requirements; it wasn't tech, it mined gold, and it was cheap. What I didn't know could have filled a couple of Steven King novels, but I got lucky and watched the stock slowly climb upward.
Like most investors, if you pick the stock and it goes up - it's entirely because of your prowess in the market, superior analytical skills, and latent psychic abilities. If it goes down, well ... hopefully no one will notice you bought some...
What I had really purchased was the largest open pit copper mine in that hemisphere. It was entirely accidental, and just blind luck that I bought when I did.
My theory is that copper is oil. It is the lifeblood of most of the industries we call by other names - due to the volume of copper products they use. Copper plumbing is the de facto standard for housing, copper circuitry is the metal conductant of choice for electronics, and nothing of any size can be constructed without tons of copper - something.
With the acquisition of Phelps Dodge, FCX has morphed itself from a "one pit" company, into one of the largest producers of copper in the world. Due to the volume of gold and other metals produced, it makes the company kind of a "tweener" stock - as it tends to rise with the price of gold, and rise with the price of copper.
Copper prices have risen to new highs almost in lock step with oil. The two aren't linked in any material way other than both are in great demand. I don't see this as a passing fad. A lot of underdeveloped countries are expanding their infrastructure; China dominates the news, but India is no slouch either. Whether the expansion is physical or digital, copper is king.
As mentioned in prior posts, I am focusing on natural resources and dabbling in technology. The "spine" of the fund will be scarce oil and minerals - not scarce as in precious, scarce because everyone needs plenty and that demand should fuel the right companies to heights never seen before.
Like you I just hope I pick a couple of good ones among the chaff...
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