L2 Capital Podcast #16: Chat with Adam Rozencwajg – Commodities

In today’s episode, Marcelo López spoke with Adam Rozencwajg, founding partner of Goehring & Rozencwajg, an investment firm linked to natural resources such as mining, energy and agriculture. Prior to founding G&R’s, the partners were responsible for $ 5 billion of AUM at Chilton Investment Company.


Adam talks about the investment process and how they look for opportunities in the  commodities sector, with a value investing approach, meaning that they look for commodities that currently have depressed prices at the same time that present a strong possibility of course reversion and price appreciation.


Adam Rozencwajg analyses the relationship between the price of commodities as a whole and the price of the financial markets today and makes a retrospective of the past, showing that at times, when this relationship was that insane, great returns followed.


The first commodity that Adam talks about is oil. He highlights a historical difference between the per capita GDP and a country’s oil consumption and the way the S curve behaves.


When asked about electric vehicles, Adam Rozencwajg explains his views in a detailed, comprehensive analysis. He talks about the effects that the adoption of electric vehicles brings to the energy market and the impact on oil consumption. He mentioned Tesla, which is the most famous brand of EVs at the moment, and makes a very funny comparison with the Concorde.


Adam also talks about shale oil, the companies that operate in the industry, and the fundamentals he pays attention to in his analysis.


Rozencwajg talks about his experience investing in uranium and explains what made him come back again and invest in the commodity in 2018. His explanation covers the strong fundamentals he is seeing and the outcomes he expects for the sector.


Adam explains his confidence in copper, highlights the various elements associated with the demand and talks elaborately about why he is optimistic about it.


When asked about the gold market, Adam Rozencwajg talks about the relationship between the price of gold and oil as an evaluation measurement and the outlook for the yellow metal and silver, another precious metal.


Finally, Adam explains why he is optimistic about agricultural commodities, with a range of reasons, from climate change, crop yield to sunspot activity.


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  1. Al McInally says:

    This is the most interesting set if studies I have seen in years. Having studied Climate Change i.e. everything I can find on the subject, this makes more sense than anything else I’ve studied.

    Obviously commodities have been drastically overlooked as the stock bull market has progressed and it seems that all the government stimulation has promoted excessive valuations in the stock market. But now that further government stimulation is actually slowing the world economies it seems far more likely that money will flow into commodities or something else rather than stocks as investors realize the subsequent over valuation of stocks.

    • Marcelo Lopez says:

      Thanks, AI – Glad you liked it!

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