This post is a departure from my regular topics. It’s about taking on direct exposure to a commodity, something I’ve intentionally avoided throughout my investing career. The difference is that the exposure comes with strong free cash flow, no development costs, a meaningful yield, and upside optionality. Commodity risks are also softened by the absence of leverage and the likelihood of buybacks.
Macro factors weigh in too: a high-flying U.S. stock market, persistent inflation, and unfavorable exchange rates for a dollar-based investor abroad—all argue for an inexpensive domestic natural resources play. But above all, this decision is driven by the company’s attractive fundamentals.