Valuations Below Replacement Cost

Django explains companies trading below replacement cost and the importance of processing infrastructure.

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Episode notes

We sat down with Django Davidson, portfolio manager at Hosking Partners, to discuss the capital cycle framework, one of the most sensible lenses for investing in mining and commodities.

Hosking manages ~US$8B in capital, using a model honed over 40 years.

Django's approach is rooted in supply-side analysis, contrarian positioning, and the discipline to average into cycles.

We believe this approach to be one of the most effective methods for natural resource investing.

In this chat, Django covers:

The capital cycle framework — what it is & where it came from
Why supply is measurable but demand is storytelling
Why Implats returned 100x over a decade - what that tells us about today
His deep dive into PGMs — the geology, the geography, the EV narrative, and why these companies still trade below replacement cost
How BHP and Rio’s iron ore assets have generated better returns on capital than Microsoft over 30 years
Why mining represents just 1.6% of the S&P 500 and what that signals for the decade ahead
The case for natural diamonds
Where uranium sits in the cycle, and why he is cautious at current prices

Follow Django:

LinkedIn - https://www.linkedin.com/in/django-davidson-332b9867/

If you enjoyed this conversation, subscribe and share it with someone who thinks about cycles the way we do.

Episode recorded: 03/25/26

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TIMESTAMPS

(0:00) Supply Over Stories

(1:30) Capital Cycle Origins

(8:50) Incentives and Contrarian Guardrails