Commodities

[Euler]

Really interesting to see the commodity cycle is at it's multi year low. It's getting to the stage where I'm thinking of going against the crowd.





http://www.indexmundi.com/commodities/

[brianpotter]

Metals are being kept at artificially low levels gold is a good buy but massive buying opportunity in Silver

[marksmeets302]

Imminent hikes in interest rates and what will happen in China are -I think- the most influential to what will happen with commodities. Although I'm not sure if interest rates going from zero to a couple of basis points will make any impact at all. And China is hard to predict.

It's a very nice puzzle. I like to think about it every day, but am only playing it with a small amount of money. For the rest, whether to buy or sell commodities I mostly leave up to the question of how to balance my portfolio.

Brianpotter, why do you think metals are kept at artificially low levels? It's a free market.

Oh and I'm definitely loading up on coffee. But I do that every day

[Archangel]

I would say in general terms commodities have been cheap and equities expensive
I have a Pairs Trade on stocks and commodities (short stock, long commodities)
I would expect a reversion to the mean

[burdo77]

Where's other commodities like marijuana and cocaine?

[burdo77]

I know that a night out on the piss is expensive these days but the last row of column A explains it!

[Archangel]

corn futures down about 15% in the last two weeks and /LE live cattle just off of 52-week lows
Certainly a time to consider getting cheap commodities

It was also reported in yesterday’s weekly oil statistics that the commercial crude oil inventory was near the highest levels it’s been for this time of year in 80 years. Gasoline inventory was in the middle of its range

[marksmeets302]

Analysts are now talking about gold going to $300. Probably the same people that predicted $5000 when it was trading at $1800.

The decline of commodities has received a lot of attention lately, often -but unfortunately not always- a sign things might turn around. I did a little early rebalancing and added some gold and oil. Also bought a gold future to play with short term, but that looks to be a loser.

[andyfuller]

Seems a good time to get into good quality energy companies if you have a long term outlook.

[Archangel]

Analysts are now talking about gold going to $300. Probably the same people that predicted $5000 when it was trading at $1800.

A lot of the time these 'analysts' are working for large institutions or banks that have vested interests. I have seen them issue a 'buy' or 'sell' rating on stocks that they hold large positions in. eg: they will issue a buy rating on stock x that they hold and want to sell at the best price
As regards Gold, I dont even understand how thats valued anymore

[marksmeets302]

Seems a good time to get into good quality energy companies if you have a long term outlook.

Do you invest in individual companies Andy? A couple of years ago I got burned a couple of times with companies that were cooking the books, fraud etc. Since then I've switched to index funds like VTI and EUN2. Of course this also removes the impact of the occasional high flyer but I can't be bothered by that. How does it work out for you? It seems scandals are popping up way more often than say 15 years ago. Maybe sound analysis can avoid being in those stocks.

The only individual stocks I track are flow and virtu, because they are unlike other equity - in theory they should profit from declining markets.

gold is pumping today. We're eating steak.

[Archangel]

Well done on Gold

Personally I trade options, mainly selling premium. Thats why i want more VIX

[andyfuller]

Do you invest in individual companies Andy? A couple of years ago I got burned a couple of times with companies that were cooking the books, fraud etc.

Yes though I don't invest in really small cap stocks where you get those kind of issue. I look at mainstream companies.

[marksmeets302]

Oil futures taking hit after hit, with a large one today. You could say this signals less demand and therefore less economic activity. Until recently that wasn't viewed as a problem, but now gold is going up and maybe as an effect (or cause - who knows) the stock markets are declining. It will be interesting to watch this correlation.

[andyfuller]

An interesting correlation I heard today was as oil price falls drivers drive more miles which leads to more accidents which leads to more claims against insurance companies which will feed into higher insurance prices.

I think now with a long term outlook is quite a good time to be looking at getting into the energy industry, especially on the supplier side.