‘Extreme Volatility’ Ahead: Market’s ‘Most Mispriced Opportunity’ Revealed | Gianni Kovacevic

**Gianni Kovacevic** (0:00)
We will talk about what I think is the most mispriced opportunity on the stock market in general, you know, and it has to do with what happens. We are going to have extreme volatility. They've electrified their economy. This is only possible with copper and aluminum. This trend will continue.
China will be 50, five zero percent of final energy usage will be electrification around 2040 And now the West is going to go parabolic.

**David Lin** (0:31)
Welcome back, everybody. I'm currently traveling, which is why my background is a little bit different. But I'm here with longtime guests of the program, Gianni Kovacevic, investor and author. And we'll be getting his take on the shifting commodity landscape. Are we in a commodity super cycle right now with gold, silver, and a lot of other precious metals moving up parabolically since the beginning of August? Welcome back to the show. Gianni, good to see you again.

**Gianni Kovacevic** (0:57)
Nice to see you, David. I believe in Vancouver Island. I'm hearing Asia 8PX on the sun is setting behind me.
But keeping current, stock market opens at 330, and I love my three or four hours of reading and collaborating with people I've known for a long time.

**David Lin** (1:14)
Absolutely. Are you buying the precious metals rally right now?

**Gianni Kovacevic** (1:18)
Well, I'm already in it, so I have got a good allocation. I think I have a nice portfolio of stocks, and I'm still skewed a little bit more towards electrification. That's where my heart beats. And we will talk about what I think is the most mispriced opportunity on the stock market in general.
And it has to do with the oil and gas industry, David. Not necessarily mining, even though it is. It's another hinge of history. Let's talk about that. Yeah.

**David Lin** (1:52)
Oil and gas right now has been extremely volatile. Funds have been up and down in the last couple of months because of where volatility has been with oil and gas. Right now, it's hinging on the straight-up formulas reopening. What are you watching for placements in the oil and gas sector? In other words, what would you be watching for either a decision to sell or buy more into the sector right now?

**Gianni Kovacevic** (2:15)
Well, isn't it remarkable that with all the volatility where you've had, which are the three world's largest producers of oil, Russia, Saudi Arabia, and the United States, and we have had hindrance in those big markets since Russia invaded Ukraine four years back. We have the tensions with Israel and its neighbors. We have the tensions now with the United States, Israel, and Iran, and yet the oil price is not crazy higher. So if you look at the de-dollarization trade or the inflation trade, where all of the commodities have moved up, and even in the background of that kind of war, oil simply cannot go to some number where should it be? If you look at where oil and copper were, and copper and gold in 2008, 2011, oil should maybe be $200 a barrel, especially with gold now at over $4,000 an ounce. Remember, they always used to trade when OPEC was created. The idea was to settle in US dollars, but if they had 10 barrels of oil, you used to be able to have to buy an ounce of gold. It's all broken down, David.
This electrification trend is still within our midst, and I think longer term, it's a painful, slow process like an iceberg turning, but we are slowly going away from the... This is the beginning of the end of the oil era, I believe, and that's why, one of the reasons, we haven't seen oil at $200 a barrel.

**David Lin** (3:46)
Do you think higher oil is going to cause the economy to slow down, which is going to cause a pullback in copper and lithium, which we'll talk about, which are industrial metals needed only if the economy keeps growing, Gianni?

**Gianni Kovacevic** (3:58)
Of course, very expensive oil is going to always tether the global economy. And we also have the overall volatility of the stock market. An economist, I am not. I look at it like everyone else.
I try to sort of read the tea leaves between 10 or 15 wise people in financial markets and I sort of come up with my own opinions. The sort of Damocles that's hanging over this whole exercise is the global stock market, where if we have these untenable debts, government debts, namely the United States, there has to be some sort of settlement there. When that happens, we are going to have extreme volatility.