Summary
Phil Anderson argues that the second half of the real estate cycle is setting up a potentially historic commodity boom, driven by dollar weakness, a peaking K-wave upswing, and intensifying U.S.–China geopolitical competition for resources — particularly rare earth elements (REEs). The email updates stops on existing positions, adds a new Australian infrastructure stock to the Mexican Pete Model Portfolio, and places a U.S. bank on the watchlist.
Key Claims
- The U.S. Dollar Index peaked in 2022; H1 2025 was the worst dollar performance since 1973 — confidence: high
- Dollar weakness increases non-U.S. buyer purchasing power, boosting commodity demand — confidence: high
- The K-wave upswing is nearing its peak roughly coinciding with the real estate cycle peak, which could send commodities “into overdrive” — confidence: medium
- Geopolitical tensions rise in the second half of the real estate cycle; U.S.–China competition for resources reinforces this — confidence: medium
- China controls ~70% of rare earth mining and ~90% of rare earth processing globally — confidence: high
- Lynas Rare Earths (LYC) is the only commercial producer of heavy rare earth products outside China — confidence: high
- LYC has risen 63% since being added to the Mexican Pete Model Portfolio — confidence: high
- Bank deregulation under Trump may boost near-term bank performance but could worsen the eventual cycle downturn through risky lending and smaller capital buffers — confidence: medium
- Gold broke out to record highs in late 2023 and is forming another Mexican Pete pattern — confidence: medium
Mex Pete References
- Lynas Rare Earths (LYC): Described as setting up in a Mexican Pete pattern; stop raised to $10.40 at a higher low near a Gann date. Chart provided.
- Southern Cross Electrical Engineering (SXE): Confirmed Mexican Pete breakout above 1.95 as support after breakout. Chart provided.
- Gold: Noted as setting up in “another Mexican Pete pattern” following its late-2023 breakout to record highs. No chart provided in this email.
- Imdex (IMD): Described as recently added to the portfolio following a “strong run”; no explicit Mexican Pete chart detail given in this email.
Stock Picks / Signals
| Ticker | Exchange | Action | Detail |
|---|---|---|---|
| LYC – Lynas Rare Earths | ASX | Stop raised | New stop: $10.40 (higher low near Gann date) |
| IMD – Imdex | ASX | Hold / monitor | Strong run noted; no new stop or target given |
| SXE – Southern Cross Electrical Engineering | ASX | Buy (new position) | Breakout entry ~1.70 |
| OZK – Bank Ozk | NASDAQ | Watchlist (not yet a buy) | Watch for move over 50–$55 |
Predictions / Forecasts
- Commodities may enter an outsized boom as the K-wave peak and real estate cycle peak converge — timing not precisely specified, implied late 2020s.
- The U.S. Dollar Index will continue its cyclical decline following its 2022 peak.
- Geopolitical resource competition (U.S.–China) will intensify through the remainder of the real estate cycle second half.
- Bank deregulation will support bank earnings near-term but contribute to a more severe cycle downturn.
Notable Quotes
“The upswing in the K-wave is nearing its peak at about the same time as the real estate cycle. Both cycles reaching their conclusion at the same time could send commodities into overdrive.”
“Do note, a chart that goes up like that, often comes down the same way. For the purposes of the exercise here though, we’ll manage our stop and see how it all goes.”