The Conversation (0)
Ross Beaty, Chris Berry, Gianni Kovacevic and Ian McAvoy participated in a Canvest panel on the link between metals and technology. Here’s an overview of what they had to say.
This year’s Canadian Investor Conference included not just resource companies, but also companies focused on technology and diversified investment opportunities. It’s thus unsurprising that the fusion of metals and technology was the focus of one panel at the event.
Moderated by Joe Martin, the panel featured: Chris Berry, president of House Mountain Partners and co-editor of the Disruptive Discoveries Journal; Gianni Kovacevic, executive chairman and director of CopperBank Resources (CSE:CHF); Ian McAvoy, chairman and CEO of Thomson Power; and Ross Beaty, chairman of Pan American Silver (TSX:PAA,NASDAQ:PAAS) and Alterra Power (TSXV:AXY).
Overall, the participants appeared to agree on two key things: technology is changing rapidly, but even as it changes is likely to remain dependent on metals. Here’s a look at those points and a few others that came up during the discussion:
- Technology is changing — As mentioned, a key theme of the panel was the rapid changes that are taking place in technology. For instance, Berry pointed out that a concern for lithium-ion battery manufacturers is that the best lithium-ion battery chemistry today may not still be the best 10 or even five years down the road. Similarly, McAvoy quipped, “at this stage you have to be agnostic towards new technology because one thing’s for certain: it’s going to change.”
- Technology will always require metals — That said, panel participants were adamant that no matter how much or how quickly technology changes, it will always require metals. Succinctly summing up the situation, Beaty said, “for me the outlook for metals is good, but I have no idea where they’re going to be used.”
- Good deflation — Berry highlighted early on in the panel that while deflation is often seen as bad, some types of deflation are good. “It has to do with the collapse in the price of various technologies,” he explained. For example, the price of lithium-ion batteries is falling — while that might sound like a bad scenario for lithium producers, in the long run, it’s likely to be positive. That’s because as technologies become more economic they tend to gain popularity, with demand ultimately rising.
- Developing nations need metals — A number of panelists pointed out that one reason they’re so positive on metals used in technology is that demand for them from developing nations is set to rise. As Berry pointed out, “there still is a significant mass of humanity that doesn’t even live close to the quality of life that we do, and they know how we live and ultimately want to aspire to that lifestyle.” Kovacevic added, “if you take any number, no matter how small it is, and multiply it by 2 or 3 billion, it becomes a very large number.”
- Choose investments carefully — Despite their positive outlook for metals tied to technological developments, the panelists were sure to remind investors not to buy into just any company focused on such metals. Beaty was particularly emphatic, noting “there’s usually lots of supply of these [metals]. Don’t run out and buy a stock just because it has … a magic hot word in it — most of these stocks will go up and go down just as quickly.” He added, “do your research. The key companies that are going to do well are companies that have world-class deposits where they can produce really low-cost, really good-quality [material].”
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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