5th Stock Using the Long Term Limits to Growth

http://www.cnbc.com/id/48753633 http://money.msn.com/business-news/article.aspx?feed=AP&date=20120822&id=15477228

http://finance.yahoo.com/news/middle-class-set-back-over-last-decade-report-174840799--sector.html

Metal Stock

In review you now have 5 stocks.  Consolidated Edison Inc. (ED) or another utility, Kraft Foods Inc. (KFT) or another food stock, Eaton Corp (ETN) or another industrial stock, and U.S. Bancorp (USB) or some other financial (Bank) stock of choice.  Last pick was an oil or gas my recommendation was Chevron Corp (CVX) but any oil sector stock would do.  Remember you can own any stock in the sector not the one I recommend.

Using the book “The Limits to Growth” the study by Graham Turner, my next recommendation is a metal stock.  (I break out the medal Gold from all other metals so Gold is in its own class for two reasons; first Gold is a currency, second Gold has few industrial uses other than being pretty and a currency we can live without it.)  There is iron ore Cliffs Natural Resources, Inc. (CLF), copper ore Freeport-McMoRan Copper & Gold Inc. (FCX), the rare earths  Molycorp, Inc. (MCP), coal (yes coal I put this one in the metals since you dig it out of the groud not pump it out of the ground) Peabody Energy Corp. (BTU), aluminum Alcoa Inc. (AA) you are probably saying wait a minute you don’t dig it out of the ground, that is correct but 75% of aluminum production is recycling, or steel Nucor Corp. (NUE) or United States Steel Corp. (X).  There is also nickel, zinc, magnesium, tin, and any others.  Unless we can mine the astroid belt or planets there is a limited supply.  Limited by what is in the ground here on earth.  So buy a profitable companies stock that is the primary supplier of an key metal.

I recommend  Freeport-McMoRan Copper & Gold Inc. (FCX).  Because copper is a high demand industrial metal that is getting harder every year to get as high quality ore.  Again you pick the stock, this is only my recommendation.  No new metal is bing put into the ground. 

Look at the chart again.  Notice the non-renewable resources graph in purple.  The ramaining resources will continue to get harder to mine.  Harder means the value of the resource will go up.  Well we invent new ways to recycle, of course.  Will we find new sources deeper in the earth, probably.  Will we use the non-renewable resources more efficently, deffintely. 

But we cannot create or grow more.  As the population increases the demand for the non-renewable resources will increase and the laws of supply and demand will kick in driving the prices higher.  At the same time notice on the graph the supply will srink.  So buy one of these stocks, and you can grow your wealth riding a long term tread.