OI6: A Fundamental Approach to Commodities ft. Ricardo Leiman & Pedro Marion
Top Traders Unplugged
Niels Kaastrup-Larsen
4.8 • 714 Ratings
🗓️ 20 March 2024
⏱️ 46 minutes
🧾️ Download transcript
Summary
In this episode, Moritz Seibert is joined by Ricardo Leiman and Pedro Marion from KLI Asset Management, a UK-based commodities-focused hedge fund. Ricardo and Pedro explain why KLI’s trading approach is rooted in deep fundamental analysis of commodity supply and demand and how they integrate commodity equities into their portfolio. Furthermore, they mention that the strong diversification across their portfolio of about 30 markets allows them to hold directional positions longer term, avoiding stop-outs on short-term price reversals – a feature that’s also an edge. Ricardo and Pedro also provide color on markets which they believe are currently interesting, including copper, sugar, coffee, oil, and EUA emission allowances.
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Episode TimeStamps:
02:09 - Introduction to Ricardo and Pedro
06:18 - What is their edge?
07:57 - What commodities are they trading?
08:46 - Why they don't trade cocoa
11:09 - Acquiring information through networking
13:40 - Why and how do they trade commodity equities
17:15 - What do they consider long-term?
19:38 - Why isn't copper sky rocketing?
22:01 - Their approach to options
22:50 - How they incorporate trend following in their trading
25:24 - Global macro perspectives
27:28 - No hard landing?
28:35 - Is the coal market dying?
31:14 - The outlook of EUAs
35:03 - Do they formulate a price target in their models?
37:08 - A disconnect in the green transition
38:58 - Natural gas market integrating with LNG
40:55 - Their view on the grain markets
43:34 - A quick touch on other markets
44:20 - Thanks for listening
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Transcript
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| 0:00.0 | I think that there's a disconnect between what politicians believe and, you know, a general public, who is prepared to pay. |
| 0:16.6 | And I think that that's why we're seeing that penetration of EV is starting to slow down |
| 0:22.6 | because people don't want to pay a huge premium for electric vehicles. |
| 0:26.6 | I'm not sure that they have the money to buy those cars. |
| 0:30.6 | So I think that oil is very alive and we'll be kicking for the foreseeable future. |
| 0:36.6 | Imagine spending an hour with the world's greatest traders. |
| 0:41.3 | Imagine learning from their experiences, their successes, and their failures. |
| 0:45.3 | Imagine no more. |
| 0:47.3 | Welcome to Top Traders Unplugged, the place where you can learn from the best hedge fund managers in the world, |
| 0:53.3 | so you can take your |
| 0:55.1 | manager, due diligence, or investment career to the next level. Before we begin today's |
| 1:00.0 | conversation, remember to keep two things in mind. All the discussion we'll have about investment |
| 1:04.7 | performance is about the past, and past performance does not guarantee or even infer anything |
| 1:10.0 | about future performance. |
| 1:11.6 | Also understand that there's a significant risk of financial loss with all investment strategies, |
| 1:15.8 | and you need to request and understand the specific risks from the investment manager about their product |
| 1:21.3 | before you make investment decisions. |
| 1:23.7 | Here's your host, veteran hedge fund manager, Niels Kostrup Larson. |
| 1:32.7 | Welcome to another episode in the Open Interest Series on Top Traders Unplocked, hosted by Moritz-Sebert. |
| 1:39.0 | In life, as well as in trading, maintaining a spirit of curiosity and open-mindedness is key, and this |
| 1:45.8 | is precisely what the Open Interest Series is all about. Join Moritz as he engages in candid |
| 1:52.3 | conversations with seasoned professionals from around the globe to uncover their insights, |
... |
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