The Meb Faber Show · Friday, September 25, 2026
David Iben explains that commodity equities are often mispriced because analysts incorrectly assume the commodity's price will fall over time, rather than accounting for the dollar's expected devaluation. He notes that this flaw leads to stocks being undervalued, especially when companies delay production, as the market overreacts to short-term disruptions without considering the long-term value of the underlying resources.
“Another thing we think is great is any other industry on earth, people assume that the dollar loses value. They do discounted cash flow at, fine, the dollar loses value over time. Only in commodities, gold, oil, copper, do they fix it to the dollar and then assume the commodity drops in price every year.”
“Uh, why is it that it's the only industry out there where the dollar gains and the stocks drop? And so that means the longer live the reserve, the cheaper they will sell it to you. And so we've been able to take advantage of that for many years.”
“The natural resource sector in general, when it comes to commodities, commodity equities, I mean, you're just referencing what they used to call Dr. Copper, which, I mean, who knows about the time this this publishes, all-time highs around seven bucks.”