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How Much Metal Does a Man Need?

I often think of Tolstoy’s story, ‘How much land does a man need?’ (1886)  in relation to the sometimes vast ambition of metal people.  We forget there were merchants in Tolstoy’s and Dickens’ day, a match for any oligarch of the modern era.

Tolstoy’s short story tells of a country peasant, Pakhom, who dreams of owning his own land to escape the fines and impositions of the estate managers. Through canny borrowing he obtains enough land to become a landowner in his own right. But then, as landowner, he starts to feel as beset by the peasants who allow their cattle to roam his land as the previous landowners once felt towards him. Along comes a visitor who tells Pakhom about fertile lands on the other side of the Volga, where wheat will grow as high as a horse.  He goes there and starts a farm but is soon bored and wants more. He hears of the land of Bashkirs in the steppe (a Turkic people some of whom lived in Kazakhstan) where the people appear indolent; they only live off Kumiss (horse milk) and have no interest in owning the land. When he arrives there the Bashkirs accept Pakhom’s gifts and tell him he can have as much land ‘as you can walk round in a day’, mark out and be back by sunset. He thinks they are fools and Pakhom sets off at dawn to mark his land with a spade. As he goes on and on it leads him to think, what about that extra piece of land, that will be good for flax, that bit will be good for wheat…he finds that he has not left enough time to return to the spot he started from by sunset which is the condition of the sale. With his heart bursting with exhaustion he finally arrives back at the starting spot as the sun is setting, only to expire and is buried on the spot by his workman.

Metal merchanting, the accumulation of metals, mines, trading positions, market share, customers, profit, net worth, employees, assets all have in them the power to become ends in themselves. How much land does a man need, indeed? Or how much metal? How much clout? How much market share? These are questions not frequently asked by the young and aggressive traders making their way, nor by the Oligarchs who emerged from the shattered Soviet Union, nor by the currency traders and bankers driven on and on by targets, and targets upon targets.

Positional trading, much like the man with the spade, offers the chance to have as much metal as leverage will allow. We have all done the sums, leverage allows for great multiples of profit and, with interest rates as close to zero as they are ever likely to be, the temptations are clear. The falling copper market is a temptation for position building. 1000mt at $5500 per mt, perhaps another 1000mt if it goes lower, and another….and another. How much metal does a man need?

No, the true relation between a metal merchant and his acquisitions should be one of disinterest, however hard it is not to be acquisitive for the sake of it. There are not many people I admire much in metals, but those I do have another life, one that is free from the endless accumulation of metal like hotels in a real life game of Monopoly, one that sees metals and accumulation for exactly what it is – an industry powered on fear and greed, and that my very first boss always used to describe, in his rather Edwardian sort of way, as ‘incredibly vulgar’.

At its best, money and metal can be a kind of language, something to be learnt like chemistry, something that ordinary folk don’t really get, driven by something that isn’t always greed but can be just the fact that you know how to do it. Like knowing how to walk through a minefield, knowing how to jump out of a plane, knowing how to walk through fire. There are those of us that have been doing it for so long that we know nothing else and it long ceased to be a means to accumulate wealth. It is just what we do. The profit, if it comes, is merely a measure that tells you if you are winning or not. As far as I know the CEO of one of the once most powerful commodities companies in the world drives not a Rolls-Royce but a Toyota Prius. That says more to me about the psychology of a metal person than any mention in the Fortune 500.

Published October 14th 2015 on www.lord-copper.com