NEW YORK ( TheStreet) -- I was talking with Stephanie Link, the co-portfolio manager for Action Alerts PLUS, about the copper trade and a few of the stocks that have been benefiting from a strong rally in prices since the beginning of August.
Stephanie has been a big advocate over the last month for
(VALE - Get Report)
, the Brazilian copper miner that has rallied from near $12 a share to sit today nearer to $15, a 25% gain that's impossible to argue with.
But every production report I read tells me the same story: The supply coming online continues to outstrip the potential demand, even with a recovering economy in the U.S. and Europe. Almost six of every 10 tons of copper are dependent upon China and its numbers on growth that, even with a manufacturing expansion in August, continue to be revised downwards.
I'd love to recommend copper because it has endlessly lagged the rest of the commodity recovery since 2009, but I just can't do it. One of the points that Stephanie and I agreed upon was the long-term nature of the copper trade. If you are buying VALE or my own favorite
(FCX - Get Report)
, you must do it with a very long horizon view in mind. With dividends over 5% for VALE and 4% for FCX being safely delivered, it's a legitimate "pay to wait" idea.
I talk more about copper with Stephanie in the video above.
Action Alerts PLUS has a position in VALE.
At the time of publication the author had no position in any of the stocks mentioned.
This article was written by an independent contributor, separate from TheStreet's regular news coverage.