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Latest Comments126 Comments
Commodities: Bubble or Not?
So the issue is -- when is the price of gasoline going to hurt to the extent that it will change my lifestyle so much that I stop buying HD TV and other items?
I don't know the answer, but I well recall waiting in lines a block long for gasoline during both the 1970s Arab Oil Embargos, when I was glad to get gasoline--at any price!...and so would you! (There was no Strategic Oil Reserve)
Maybe one measure of our pain limit is the % of income devoted to purchasing gasoline. For most of us, $50 or $75 per week is far less than 5% of our gross income...it clearly hasn't hurt most of us yet, and another $25 a week (50% increase) may not hurt either.
It is embarrassing that Americans think cheap gasoline is their right. Gasoline is taxed even more heavily in many countries, and costs the equivalent of $8-$10 per gallon (including Europe); they don't like it either, but they have learned to accommodated it...and it is very likely we will too.
Riots?...nuclear war?...I think not! (Besides, we can't spare the troops from our other 2 wars.)
Whimps! Stop your whinning and war mongering!
Some good may come of this. Hopefully, we will finally get serious about alternative energies (and because it will take years to bring significant amounts of wind, solar, geo-thermal, etc. alternatives on-line, we should start drilling in ANWAR and our coastal areas ASAP). If Clinton had not vetoed ANWAR drilling 10 years ago, we would have 1.5 million barrels more oil today!
There's a Solar Shakeout Coming - Citigroup
With respect to Citigroup’s Timothy Arcuri, I suspect not one of you who flame him has ever worked in a corporate invironment...if you had, you would know that some very bright folks work in poor companies, and visa versa. Simply put: your attacks lack credibility.
Commodities: Bubble or Not?
When oil increases by 40% in a few months, this is a BUBBLE!...OK, I've said it.
But more needs to be said:
Basically, oil responds to supply/demand fundamentals--however, demand didn't increase by anything like 40% in a few months. But, like other investments, commodities do responds to speculation.
I'm investing in oil, natural gas, and base metals stocks and ETFs, but for no purpose than to make a profit--so, I guess I'm a speculator...arn't you also?
Bubbles burst, and the oil bubble may burst next week; but the bursting of these commodity bubbles are but brief temporary "corrections"... that constitute buying opportunities to higher price levels.
This bubble-and-burst situation will continue until either supply increases sugnificantly (which will take decades), or demand is met (also may take decades).
With respect to grains (and unlike the other commodities), supply can be increased rather quickly, even within 1 year in some cases. Therefore, gain bubbles should be burst much faster than those for oil, steel, nat. gas, etc. Still, worldwide demand for grains continues to grow, and prices tend to rise again. Thus, I also continue to invest in grain ETFs.
Finally, I don't care what you call it--bubble, or fundamentals--it will continue to be a good investment.
Where's the Bursting Commodities Bubble?
What is to stop a growing demand curve?...the only things I can think of are (a) an event (depression, disaster, nuclear war, or deadly illness) so widespread that it there is no immediate recovery or rebuilding; or (b) demand is finally met (meaning most of the world has a living standard similar to ours and that of Europe).
Why Inflation Is Lower Than You Think
I would add that there are ways all of us can reduce the impact of inflation on our own spending. Also that it was Alan Greenspan who went before Congress again and again to argue for reducing the rate at which Social Security recognized inflation.
And finally, yes, inflation's most significant impact is on the poor--now that you have said it, do you feel better?...and what EXACTLY do you (seriously) propose is done to assist the poor?
Is Yang Still In Charge At Yahoo?
The Wind Beneath Trinity's Wings
I ask because I find picking winners among solar stocks to be exceedingly difficult, and assume the same would be true of wind energy stocks...thus I prefer ETFs.
U.S. Dollar Signaling a Changing Tide?
Is the Commodity Bull Market Over?
Also, I echo lg71050 -- commodities are a global story; also it is much bigger than Chindia, look at Latin America, Eastern Europe, Southeast Asia (and soon Africa). People everywhere are more aware of what Americans and Europeans are eating, wearing, driving, and doing; they want the good life, and think they deserve it! Look for accelerating growth in infrustructure investments (steel, cement, electrical/electronic equipment, chemicals/fertilizers, and fuels.
The Commodities Bubble
To thoroughly discuss commodities, we would need to take them one at a time, but speaking of commodities collectively, in the 'long-run', it is still a supply/demand equation. Demand is huge!...until either supply increases, or demand is curtailed (such as through a worldwide recession), the upward trend will continue (though hopefully, not at such a steep slope).
My profits in agricutural commodities put a smile on my face...but I deeply regret food riots among people for whom food is a much larger proportion of their income. OTOH, I don't think the food situation would change if I divest myself.
Awaiting Further Strength in Commodities
As for commodity prices, I generally agree (I disagree on gold, which seems to react more to 'unknown forces' than logic, thus I hold some gold, but not enough to significantly influence my portfolio unless it goes sky high or falls like a rock). Materials, metals, oil natural gas, and the like, have (perhaps) started a correction. However, given worldwide demand, I expect them to resume their upward trend.
In fact, if the present rising stock market is a signal of an improving economy just over the horizon, I feel even more comfortable in owning them through a hopefully mild correction.
Is the Fed Bankrupting America?
OPEC Signals U.S. Rally
Well, it seems to me Mr. Schwarz is having a bit of fun with us...if you are going to tell a lie, be sure to include some truth.
The lie: "If this [the dollar] strengthens by 10 percent, it is probable that [oil] prices will fall by 40 percent."
The truth: "America’s on sale and the world is buying. Time to buy the S&P 500 (IVV)."
Mr. Schwarz completely ignores the impact of supply and demand on price...the price of oil may 'correct' temporarilly due to (either or both) a stronger dollar and worldwide economic slowdown; but it will surely resume its upward climb until massive amounts of alternative energy sources are in operation.
Surely America is on sale, with our deficits, the dollar cannot get so strong that our goods, or real estate, and our companies are not attractive acquisitions to foreign peoples and companies.
p.s. The rest of the world is laughing at the Americans...we are whinning about the cost of carbon-based energy, while they have less disposable income and have adjusted to gasoline prices equivalent to $10/gallon. Get over it! Institute a "Manhatten Project" for alternative energy, and secure your independence from Middle East oil!
Chesapeake Energy, Monsanto: Paying Tit for Tat
Options are a viable way to play the boom market for commodities.
In fact, options provide a way to far greater profits than your approach, with far less invested.
There is lots of room for both approaches (and I'm sure Mr. Zanoni would suggest you use options for only a portion of your investment allocation.
EFA More Attractive Than SPY
I'll consider this to be "news I can use".