Yes,ducati916 said:Let's examine the scenario for corn.
Corn can of course be consumed as an agricultural commodity.
Also, corn & sugar cane can be processed into bio-fuels, [ethanol]
Therefore with increasing financial viability of ethanol as a fuel source due to high oil prices, we have a bullmarket in sugar & corn.
ducati916 said:Good grief!
The volatility of gold has been tremendous.
One winning trade to the long side says absolutely nothing about anything.
Odds are derivatives of probability.
Thus total nonsense.
jog on
d998
ducati916 said:Most foreign governments have a large stake in maintaining the US trade deficit, and thus, a strong dollar. Thus Central banks keep accumulating dollars.
The practice of buying dollars for this purpose is reinforced by a further very important consideration, and that is the ever increasing needs of the worlds markets to transact in a single currency.
That currency is the US$.
Once a currency achieves this status, it is very difficult to unseat the King.
Currently, the US$ accounts for 88.7% of all transactions. This drives the requirement for an ever expanding supply of dollars [read increased demand] thus maintaining the dollar strength.
Thus in this context, what does that say about Gold?
jog on
d998
.ducati916 said:If however you feel the Bear case has some validity, you will decrease, avoid, or accrue short postions to commodities
chops_a_must said:Well, if many commodities are off their highs, logically, some are setting new ones. It cannot be any other way. What should that tell you?
No, I was exploiting a gap in your language.ducati916 said:Logic, is a component of philosophy, that adheres to erudite argument.
The highlighted section illustrates a logical fallacy.
This is the case, as, should one commodity be off a high, it is not a 100% correlation that another is setting a new high.
It tells me that you are extremely confused, and confused young men lose money in the financial markets.
jog on
d998
Kauri said:One long trade of course means nothing, the point is that had I held one of your many opinions ( volatile, bearish?? maybe just bearishly volatile??) there would have been no trade, but hey, I could have talked up a storm justifying why taking a trade was unwise.
chops_a_must said:No, I was exploiting a gap in your language.
The economic slowdown is in this quarters figures.
You will note that many commodities are off their highs.
What should that tell you?
ducati916 said:Possibly you are long red wine?
Really get a grip of the context if you wish to quote posts.
jog on
d998
"Many" does not equal "all".ducati916 said:Same rejoinder, if you wish to quote, leave the entire quote for context;
Better learn to read first son.
jog on
d998
Chopschops_a_must said:"Many" does not equal "all".
LOL!rederob said:Chops
Ducati may not understand what you mean.
I suggest at least 3 paragraphs, ideally including the word nonsense a few times, and economics 101 as well.
I generally will avoid a thread that ducati is posting in unless I want a good laugh.
People who use latin, philosophy, economics and other erudite material in posts are clearly superior beings and I think we should appreciate them for what they bring to us.
I learned a long time ago about what should be cut, and paste.
Kennaskennas said:I am sitting on the fence.
In the short term, I actually think a lot depends on a US housing soft landing. If things cool and not freeze, then US may stay bouyant, and Chindiapan will continue to grow, therefore keeping demand up, until supply catches. Maybe 5 more years. If US housing crashes, then commods have just began their decline.
rederob said:Kennas
US housing will significantly impact copper, slightly impact aluminium, and have little "fundamental" effect on the other base metals.
The general disconnect of zinc/lead with copper occurred recently when zinc went into backwardation. However, from time to time expect copper's pull to have an influence, albeit not the extent it formerly had.
As for the duration of this commodity bull, I expect it to be fully generational - ie at least 20 years. Within that period there will be cycles of oversupply and undersupply that influence specific metals, and occasionally the complex.
Those with Canute-like views that believe GDP is an arbiter of so many things, including metals prices, need to take care if they use those same principles to trade in the markets over the longer term. Short term traders, perhaps like Kauri, can be successful irrespective of their general knowledge of the market.
My average "holding period" for an equity is around 2 years, although my core holdings are around double that. So when I put money into the market, I do it based on a rather long term view.
I suffer no delusions about a prospect of getting things wrong, or the market changing on a sixpence. However, the probability of market calamity near term is exceptionally low, so investing now is relatively safe.
Does this mean that commodities are equally safe?
I don't know.
I do know that medium term prospects for some base metals is exceptionally good. That is, I expect nickel and zinc and lead will hit new highs, with the latter 2 metals likely to outperform the others.
Additionally, in the short term I expect copper will do an about turn and head up to $8000 again. However, unless Chinese demand perks up a lot more, in the medium term I see consolidation occurring, rather than record highs being reclaimed. Reversal of US housing trends would alter that and give a significant boost to copper's fortunes.
Moving away from the metals, and onto the equities, and we have a different game again.
Looking at RIO and BHP or even OXR and you would have to wonder whether the commodity bull had pulled up stumps and knocked off for the day.
Then you look at some zinc and uranium-based equities - the PDNs and ZFXs of the world - and you begin to see that we have cycles within cycles.
Some months ago I thought I would never invest in the BHPs of the world, again. But as I do the sums, I discover the average received prices of almost every commodity they produce (except oil) is presently higher now than for the corresponding (financial year to date) period 12 months ago. Accordingly, I am very likely to buy back into BHP on any price weakness.
As I am a long term investor, my preference for BHP is strongly in the camp of a commodity market that is unlikely to disintegrate any time soon, and has the capacity to ride through a substantial correction: Perhaps even a series of commodity-specific corrections that have an insignificant effect on BHP's true bottom line.
rederob said:Kennas
US housing will significantly impact copper, slightly impact aluminium, and have little "fundamental" effect on the other base metals.
The general disconnect of zinc/lead with copper occurred recently when zinc went into backwardation. However, from time to time expect copper's pull to have an influence, albeit not the extent it formerly had.
As for the duration of this commodity bull, I expect it to be fully generational - ie at least 20 years. Within that period there will be cycles of oversupply and undersupply that influence specific metals, and occasionally the complex.
Those with Canute-like views that believe GDP is an arbiter of so many things, including metals prices, need to take care if they use those same principles to trade in the markets over the longer term. Short term traders, perhaps like Kauri, can be successful irrespective of their general knowledge of the market.
My average "holding period" for an equity is around 2 years, although my core holdings are around double that. So when I put money into the market, I do it based on a rather long term view.
I suffer no delusions about a prospect of getting things wrong, or the market changing on a sixpence. However, the probability of market calamity near term is exceptionally low, so investing now is relatively safe.
Does this mean that commodities are equally safe?
I don't know.
I do know that medium term prospects for some base metals is exceptionally good. That is, I expect nickel and zinc and lead will hit new highs, with the latter 2 metals likely to outperform the others.
Additionally, in the short term I expect copper will do an about turn and head up to $8000 again. However, unless Chinese demand perks up a lot more, in the medium term I see consolidation occurring, rather than record highs being reclaimed. Reversal of US housing trends would alter that and give a significant boost to copper's fortunes.
Moving away from the metals, and onto the equities, and we have a different game again.
Looking at RIO and BHP or even OXR and you would have to wonder whether the commodity bull had pulled up stumps and knocked off for the day.
Then you look at some zinc and uranium-based equities - the PDNs and ZFXs of the world - and you begin to see that we have cycles within cycles.
Some months ago I thought I would never invest in the BHPs of the world, again. But as I do the sums, I discover the average received prices of almost every commodity they produce (except oil) is presently higher now than for the corresponding (financial year to date) period 12 months ago. Accordingly, I am very likely to buy back into BHP on any price weakness.
As I am a long term investor, my preference for BHP is strongly in the camp of a commodity market that is unlikely to disintegrate any time soon, and has the capacity to ride through a substantial correction: Perhaps even a series of commodity-specific corrections that have an insignificant effect on BHP's true bottom line.
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