Most Popular
1. Dow Max Drawdown Bear Stock Market 2022 - Accumulating Deviations from the Highs - 21st Feb 22
2.Putin Starts WW3 in Ukraine, Will Use Tactical Nuclear Weapons, China Prepares Taiwan Blitzkrieg - 28th Feb 22
3.World War 3 Phase 1 - Putin WINS Ukraine War! - 25th Feb 22
4.INVESTORS SEDUCED by CNBC and the STOCK CHARTS COMPLETELY MISS the BIG PICTURE! - 10th Feb 22
5.Will There Be A 2024 US Presidential Election? - 3rd Mar 22
6.Gold and SIlver, Precious Metals Sector Is at a Terrific Buy Spot - 6th Feb 22
7.Why Putin Wants the WHOLE of Ukraine - World War 3 Untended Consequences - 6th Feb 22
8.Dow Stock Market Expected Max Drawdown 2022 - 19th Feb 22
9.Stock Market Calm In the Eye of the Inflation Storm - 4th Mar 22
10.M = F - Everything is Waving! Stock Market Forward Guidance - 7th Mar 22
Last 7 days
Why APPLE Could CRASH the Stock Market! - 21st May 22
Why Is Crude Oil Ignoring US Inventories? - 21st May 22
Here is Why I’m Still Bullish on Gold Mining Stocks - 21st May 22
THE INFLATION MEGA-TREND QE4EVER! - 20th May 22
US Real Estate Investors – Is There An End In Sight? - 20th May 22
How Technology Affected the Gaming Industry - 20th May 22
How To Set And Achieve Reasonable Goals For Your Company - 20th May 22
How Low Could the Amazon (AMZN) Stock Price Fall? - 19th May 22
Bitten by FANG? Clocked by Cryptos? -- 'Air Pockets' Everywhere - 19th May 22
Northern General Hospital Orthopedics Fractures and and Ankle Clinic Consultations Real Patient Experience - 19th May 22
Cathie Wood Goes All in on Teladoc, ARKK INSANE Noob Investing Strategy! - 17th May 22
This is Anything but Positive for US Housing Market - 17th May 22
What Should We Do If There Is No Fed Monetary Policy Pivot? - 17th May 22
All Possible Ways to Earn Free Litecoin - 17th May 22
How low Could the Amazon Stock Price Fall? - 16th May 22
Cathy Wood ARKK INSANITY There is NO Coming Back! - 16th May 22
NASDAQ 100 Stock Market LOWER LOWS & LOWER HIGH - 16th May 22
Sanctions, trade wars worsen US inflation - 16th May 22
AI Tech Stocks Earnings BloodBath Buying Opportunity - 14th May 22
Futures Contract – Trading Crude Oil With USO - 14th May 22
How to Get Kaspersky Internet Security for 80% Discount! Do not Pay Renewal Price! - 14th May 22
Sagittarius A* Super Massive Black Hole Monster at Centre of Our Galaxy REVEALED! - 14th May 22
UK Public Debt Smoking Inflation Gun - 13th May 22
What Happens When the Stock Market Dip Keeps Dipping? - 13th May 22
Biden Seeks Inflation Scapegoats; Gold Advocate Wins GOP Primary - 13th May 22
Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower - 12th May 22
The War on Gold Ensures the Dollar’s Downfall - 12th May 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Commodity Trading Insights for 2010, Interview With Trader Vic

Commodities / Commodities Trading Jan 08, 2010 - 07:59 AM GMT

By: Charles_Maley

Commodities

Best Financial Markets Analysis ArticleWritten by Lara Crigger : Victor Sperandeo (also known as “Trader Vic”) is one of the world’s most outspoken commodities traders, with over 40 years of market experience. He has invested independently for the likes of George Soros, Leon Cooperman and BT Alex Brown, and has written a book, “Trader Vic on Commodities.”  


Mr. Sperandeo also created the popular Diversified Trends Indicator, a long/short rules-based trading methodology based on a highly diversified basket of commodity and financial futures contracts.

At last month’s “Inside Commodities” conference, HAI Associate Editor Lara Crigger caught up with Trader Vic between sessions to ask about his general outlook for commodities in 2010.

Lara Crigger, associate editor, HardAssetsInvestor.com

(Crigger):Which commodities do you think are going to do well next year?

Victor Sperandeo, “Trader Vic” (Sperandeo): Well, I’m on record across the world as saying that gold is the best investment in the world for the next two to three years. It’s fundamentally obvious, but when you’re printing huge amounts of paper vs. something that is considered money, the paper will depreciate and the hard assets will go up. So gold and silver will do well—silver a little less so—but gold certainly.

Even when it was about $830-$850/oz, I basically said, “I don’t see any scenario where it can come down.” But I wouldn’t say that it can’t correct at any given moment. When the Fed decides to raise interest rates, at that point, gold will sell off. It will be a steep correction.

But it’s also a buying opportunity, because if they raise rates, it would only be to try to stabilize the dollar. But it wouldn’t affect the kinds of huge deficits and the printing of money that’s going on for the next 10 years. It’s unsustainable. So gold, that’s my most favorite, if you will.

Crigger: What about the idea that gold’s starting to move into bubble territory?

Sperandeo: I don’t agree. If you go back to its lows, and you compound where it is today, it’s about 6.5 percent compounded. That isn’t a bubble. You know, when oil went from $10 to $150 in 10 years, that was more froth.

Crigger: You just mentioned that you thought silver would rise “a little less so” than gold. But many analysts have suggested that silver actually has better long-term prospects than gold.

Sperandeo: Possibly, except that gold has been universally and historically seen as money. It is the preference to silver. I’m not saying that you shouldn’t own silver. I’m only saying that gold is the preferred item. There is an industrial use for gold, yes, and in jewelry, but it’s more used as money. Silver has several other industrial uses.

Crigger: What’s your outlook for some of the other precious metals, like platinum or palladium?

Sperandeo: I like those two. They’ve obviously done well. But they are more connected to economic circumstances. So as you get more and more problems from these economic circumstances that come about because of the huge deficits and inflationary times, they will run into more resistance.

So when I say I think gold’s the best investment in the world for the next two to three years, I’m trying to take a lot into account. Because you may not see me again for awhile, so I can’t correct myself.

Crigger: Let’s switch gears and talk industrial metals. Do you think China will continue to drive demand into 2010?

Sperandeo: I think they will, and if I were China, I’d be selling my Treasury bonds and I’d be buying things like copper and platinum and palladium—other industrial metals, like aluminum, etc., that you need to produce. Especially with interest rates at zero. So if China gets that, then you’ll have a real bull market. Buy the stuff, not the paper.

Crigger: Recently both China and Russia have publicly called for a move away from the dollar as the world’s reserve currency. Do you think this will ever happen?

Sperandeo: I do think it will happen. It’s not easy, because with the nature of the U.S. dollar as a world currency and acting as reserves to many banks and loans, there are just not enough assets to take the place of the dollar right now. But I believe it will eventually occur.

Crigger: What takes the dollar’s place?

Sperandeo: It will be a basket. Not just one currency, but a multicurrency basket. I would guess gold would be in there for sure.

Crigger: In terms of regulation, where do you come down on the debate? Do you think position limits would be useful for the commodity markets?

Sperandeo: Well, I think indexes should be exempt for sure, because that’s how institutions get exposure. But the bottom line is: Every 30 years, you will get an attempt like the Hunts trying to corner silver, for example. But it’s very few and far between, with the regulations the way they are now. They’re very rare. The only reason a bureaucrat would want to change things is so that he could promote more of the printing and borrowing of money that commodities offset. So they’re trying to have their cake and eat it too.

Crigger: What do you think is the best strategy for investors approaching the commodities space?

Sperandeo: It’s got to be a long/short strategy. So whether it’s indexes—we have indexes that are long/short—or it’s a managed futures approach, you should take a long/short approach. With long-only, you don’t go anywhere. You just don’t make money. 

Enjoy this article? Like to receive more like it each day? Simply click here and enter your email address in the box below to join them. 

Email addresses are only used for mailing articles, and you may unsubscribe any time by clicking the link provided in the footer of each email.

Charles Maley
www.viewpointsofacommoditytrader.com
Charles has been in the financial arena since 1980. Charles is a Partner of Angus Jackson Partners, Inc. where he is currently building a track record trading the concepts that has taken thirty years to learn. He uses multiple trading systems to trade over 65 markets with multiple risk management strategies. More importantly he manages the programs in the “Real World”, adjusting for the surprises of inevitable change and random events. Charles keeps a Blog on the concepts, observations, and intuitions that can help all traders become better traders.

© 2010 Copyright Charles Maley - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in