commodity stocks

[knightD4]

Hi all,

I'm primarily a very short term trader. But, recently I read rogers' book "hot commodities" which made me think about trading in timeframes longer than a few minutes. What do people think about his extreme bullishness about metals/ag/energy? I see the logic. I see the current market leaders - mostly commodity stocks. If I invest, I like to concentrate, not diversify. Do you think 100% commodities stock portfolio is reasonable at this time?

 

[luckyd1976]

Hi all,

I'm primarily a very short term trader. But, recently I read rogers' book "hot commodities" which made me think about trading in timeframes longer than a few minutes. What do people think about his extreme bullishness about metals/ag/energy? I see the logic. I see the current market leaders - mostly commodity stocks. If I invest, I like to concentrate, not diversify. Do you think 100% commodities stock portfolio is reasonable at this time?

No

1 Huge run(ups)
2 Signs of rebalancing (big money taking profits)
3 Commodity picks are Hedge Funds way of playing Anti-USD.
3a The Dollar is showing signs of stabilizing
3b Fed rate cuts are almost done maybe even done now
3c Eventually the FED will start focusing on inflation.

 

[mark2]

Yes I expect commodity is going to resume it's strong run. Though the dollar is showing sign of stablizing, inflation expectation and surge of the oil price will cause money shift back to commodity ( precious metal, enegry, agriculture...), this time, to hedge the expected inflation risk. So, betting on commodity stock is a sensible move for now.

But I would execute the idea with options instead of stock in order to limit the overall capital risk and requirement for the strategy.