Best of the Week
Most Popular
1.Stock Market Continues Defying Gravity, Dow New All Time High - Nadeem_Walayat
2.America Superpower 2016 - Ian Bremmer
3.The US Dollar and the Precious Metals Complex - Rambus_Chartology
4.UK Immigration Crisis Could Prompt BREXIT, Propelling Britain Out of EU Despite German Factor - Nadeem_Walayat
5.The “Real Flash Crash” Will Scare You to Death - Shah Gilani
6.Gold Price Trend Forecast - Bob_Louka
7.UK Deflation Warning - Bank of England Economic Propaganda to Print and Inflate Debt - Nadeem_Walayat
8.Gold Lifeboat to Global Economies “Titanic Problem” Warn HSBC - GoldCore
9.Will Interest Rates Ever Rise? - BATR
10.Who’s Killing the Stock Market? - Shah Gilani
Last 5 days
U.S. Fed Exported QE Travesty: Meet The BLICS Nations - 28th May 15
World War D—Deflation - Secular Bear Markets Analysis - 28th May 15
George Soros Warns of “Third World War” - 28th May 15
Why You Shouldn't Try to Invest Like Warren Buffett - 28th May 15
Stock Markets Buy and Hold is Back! - 28th May 15
We're Now Frighteningly Vulnerable to a Bond Market Crash - 28th May 15
Austerity, Economics and Religion - 28th May 15
National Holidays London and the Magic of Legoland UK Review - 27th May 15
Imminent Stocks Bear Market Signaled by Dow Theory ... - 27th May 15
Gold Price Has Bottomed – More Evidence - 27th May 15
Three Reasons You Shouldn’t Try to Invest Like Warren Buffett - 27th May 15
Gold Is “100% Guarantee from Legal and Political Risks” States Russian Central Bank - 27th May 15
Don't Drown in the Sea of Global Debt - 27th May 15
Three Reasons Why Carl Icahn Is Wrong About Apple Stock - 27th May 15
Crude Oil Price Stochastic Signals - 26th May 15
Why the Stock Market Will Crash - 26th May 15
GDP, Inflation, Employment Economic Statistics: It’s All a Lie - 26th May 15
Introduction to Peak Food - 26th May 15
Should We Dump the Euro? - 26th May 15
A Geopolitical Net Assessment of Europe - 26th May 15
Stock Market Top in Place? - 26th May 15
Best Cash ISA SBI 2.3% - 2.8 Year Fix, UK Interest Rates 2016 - 26th May 15
China Sets Up Gold Bullion Fund For Central Banks - 25th May 15
Is The Silver Trade Getting Crowded? - 25th May 15
Money Murder Mystery: Who Killed the Stock Market? - 25th May 15
Why Do We Celebrate Rising U.S. House Prices? - 24th May 15
Mario Draghi’s Slippery Downward Slope - 24th May 15
Gold : Truth is Stranger than Fiction - 24th May 15
Facebook Stock Price Forecast - 24th May 15
Make a Killing on the Coming Energy "Debt Bubble" - 24th May 15
Stock Market SPX Uptrend Inflection Point - 23rd May 15
What You Know for Certain - Huge Demand for Gold And Silver - 23rd May 15
Are We in Another Credit Bubble? And Is It Different than Before? - 23rd May 15
The “Real Flash Crash” Will Scare You to Death - 23rd May 15
Venezuela: No Rule of Law, Bad Money - 23rd May 15
Robots That Can Beat the Market by 100% - 23rd May 15
Why Shake Shack Stock Is a Bad Investment - 23rd May 15
Gold Price Primary Driver Bullish - 23rd May 15

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Biggest Debt Bomb in History

Hot Commodities, The Place To Be Invested

Commodities / Investing 2010 Oct 24, 2010 - 04:48 AM GMT

By: Charles_Maley

Commodities

As one watches the day to day advice on CNBC, you will notice that we are inundated with stock advice. Bank of America this, Goldman Sachs that, and of course Apple Computer will run the world shortly. But when it comes to commodities, they are rarely explored with the exception of gold, copper and oil.


Granted, there have been some great single stock performances over the last 12 months, but as a whole the S&P has grossly underperformed most commodities. The S&P for the 12 month look back is up 8.3%. Also worthwhile mentioning is that this brings us into territory where we are trading at 21.57 times earnings with a dividend yield of 1.87%. Although there is always room for more stock upside, this is not a “cheap” market as we are told daily on CNBC.  

Now, let’s look at some commodities for that same period. Palladium is up 73% and Cotton is up 55%. In fact 21 different commodities have outperformed the S&P, and 17 of them are up 0ver 20% for the 12 month period. Natural gas and cocoa are the only commodities that are tracked here that are down over the last 12 months.

I don’t know what fools the Government takes us for, but they want us to believe that there is no inflation. The most recent inflation numbers posted by Robert Schiller reflect inflation running at 1.4%.

I have a question. Can we really expect a new cotton shirt to be up only 1.4% when cotton has gone up 55% in the last year? Will I still pay the same for breakfast when Pork bellies and OJ rose over 25%, and coffee over 38%? Can I expect my grocery bills to go up only 1.4% when wheat and oats went up over 30% and corn is up over 45%, Cattle up over 19% and hogs up over 29%? I doubt it.

I don’t think there is much question that commodities have been the place to be over the last year, and my guess is that they will be the place to be for some time to come. I think that if we are truly in a recovery then commodity prices will reflect the recovery and lead the way out. On the other hand, if this is a false alarm recovery boosted by the government QE1 and potential QE2 aid, then you will want to own “real things” and not paper or fiat currency.

So, wake up and smell the coffee as they say.


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.


© 2005-2015 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

Biggest Debt Bomb in History