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Commodity Bust = Buying Opportunity?

Source: Financial Sense Online
by George Kleinman

A number of Wall Street firms say the commodities boom is over. Gold, for example, fell to a 13-week low last week. Crude oil dropped to its lowest point this year on Friday. Stephen Roach, chief global economist at Morgan Stanley, the world’s biggest securities firm, has been quoted as saying, “The mega-run for commodities has run its course.” On the other hand, Jim Rogers, who has made a fortune in commodities, says the commodity bull market is a long-term phenomenon with another 10 years to run.

Who’s right? 

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Profit From The Big Drop In Oil Prices

Source: Financial Sense
by: Peter Schiff

Over the past several weeks, oil and gas prices have fallen sharply, prompting many to conclude that the bull market has finally run its course. With oil prices back to $60 per barrel, most are now calling for prices to fall back below $50, and some see even lower prices dominating in the years to come. As there is no real evidence that suggests an abatement of those forces that pushed oil prices up from below $20 six years ago to near $80 dollars last month, such rosy forecasts really amount to wishful thinking. The recent sharp decline is likely technical in nature, providing long-term investors with an excellent opportunity to build on established positions, or create new ones. 

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How to Buy… Commodities

The subtitle to this article is “Trading and investing in one of the market’s most volatile sectors.”  If you have been following Gold and Oil over the last couple of weeks – that really hits home and  if you have been long (like moi) it has hit your pocket.  The article is a fairly good primer.  I love how she concludes it with some strategic suggestions.  My favorite is Admit mistakes, the move on. “If you let a trade go south and you aren’t willing to admit you are wrong, you are destined for failure.” Unfortunatley, that’s a lesson I have learned more than once.

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Commodities are Still Hot

The world, especially China, has been growing and using lots of raw materials. China’s commodity imports alone have grown more than tenfold over the past 15 years and so far this year China’s oil imports are up by about 10%. With its robust economy showing no signs of slowing, demand for commodities will continue to outpace the limited supply in the years ahead.

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