Cross-Asset Strategist & Quantitative Analyst, Pennock Idea Hub

Cam Hui

Cam Hui has been professionally involved in the financial markets since 1985 in a variety of roles, both as a quantitative equity portfolio manager and as a sell-side analyst. He graduated with a degree in Computer Science from the University of British Columbia in 1980 and obtained his CFA Charter in 1989.

Cross-Asset Strategist & Quantitative Analyst

EM Energy: Big Underperformance - Positioning at Record Lows, but Stabilizing.

Energy Sector : Overweight- Oil Demand Recovery to Drive 2021 Earnings

PTTEP: Bright 2021 Earnings Outlook from Recovering Crude Price

Pennock Idea Hub

We are creators of independent equity research. The Pennock Idea Hub team are veterans of the investment industry. Much of our team has spent their careers at Merrill Lynch, Deutsche Bank, RBC Capital Markets and Wood Gundy. We have taken every aspect of research back to the studs and returned to first principles. The Pennock Idea Hub marries the interests of the sell and buy side. 

We offer the best research for institutional investors by:

-Only publishing research from veteran analysts
-Eliminate the inherent conflicts of the traditional sell and buy side relationship
-Ensure our team is always accessible; collaboration with clients nurtures our collective success

Cross-Asset & Quantitative Research

Cross Asset Strategy

Multiple Countries / Cross Asset Strategy

Is it too late to buy into the commodity supercycle thesis? The latest BoA Global Fund Manager survey shows that respondents have moved to a crowded long position in commodities.
China watcher Michael Pettis raised an objection to the secular commodity bull story in a <a href="https://twitter.com/michaelxpettis/status/1362335885094756352" target="_blank" rel="noopener">Twitter thread</a>. Simply put, a secular commodity bull doesn’t make sense from the demand side. Much depends on Chinese GDP growth remaining at the current unsustainable levels.
On the other hand, Berkshire Hathaway is buying into material and energy stocks. The company reported that it spent $6.6 billion to purchase positions in five Japanese trading houses, which offers international diversification and sector exposure. Specifically, these trading houses offers a window into the cyclical global economy, namely steel, shipping and commodities. More recently, Berkshire announced that it bought a $4.1-billion position in Chevron.
We believe the cyclical versus secular commodity bull debate is irrelevant for investors with 2–3-year time horizons. While there may be some short-term potholes in the road (see <a href="https://www.smartkarma.com/insights/no-reasons-to-be-bearish" target="_blank" rel="noopener">No Reasons To Be Bearish?</a>), this is the start of a new equity bull and cyclical exposure should outperform the market. Investment-oriented accounts should position themselves accordingly.
We reiterate our view that commodity bulls should look for contrarian opportunities in energy.

Is it too late to buy into the commodity supercycle thesis? The latest BoA Global Fund Manager survey shows that respondents have moved to a crowded long position in commodities.
China watcher Michael Pettis raised an objection to the secular commodity bull story in a Twitter thread. Simply put, a secular commodity bull doesn’t make sense from the demand side. Much depends on Chinese GDP growth remaining at the current unsustainable levels.
On the other hand, Berkshire Hathaway is buying into material and energy stocks. The company reported that it spent $6.6 billion to purchase positions in five Japanese trading houses, which offers international diversification and sector exposure. Specifically, these trading houses offers a window into the cyclical global economy, namely steel, shipping and commodities. More recently, Berkshire announced that it bought a $4.1-billion position in Chevron.
We believe the cyclical versus secular commodity bull debate is irrelevant for investors with 2–3-year time horizons. While there may be some short-term potholes in the road (see No Reasons To Be Bearish?), this is the start of a new equity bull and cyclical exposure should outperform the market. Investment-oriented accounts should position themselves accordingly.
We reiterate our view that commodity bulls should look for contrarian opportunities in energy.

Commodity Supercycle: Bull and Bear Debate