Considering the broad sell-off in materials on Monday, should you run in the other direction – or start building a position.
The core thesis here lies with the investment in a global expansion at cheaper and cheaper prices. According to Fast Money contributor Zach Karabell, don't be afraid to get in the game.
He expects the demand for materials to return - and when demand comes back it could come back in a big way. “It’s not like China is the only place that’s going to be a doing major infrastructure spending. The United States and Europe are (going to be spending on infrastructure) as well,” he says on CNBC’s Closing Bell.
In other words, not only will developing nations spend to improve infrastructure but now the developed world is spending on infrastructure as part of stimulus plans.
What’s the trade?
Although you could look at the ETFs Karabell takes the trade from a different angle. He says, “iron ore, copper and molybdenum are all used in building roads.” Follow the stocks that are likely to benefit from a spike in demand.