Over the next 10 years what do you think will do best, equities or commodities ?

wombat42_2

jon3001 wrote: »

You have an interest in agriculture atm. I don't usually keep an eye on these things since I'm investing in a broad index for the long run. However the current curve of wheat futures may be of interest:

http://www.cbot.com/cbot/pub/page/0,3181,1284,00.html

08Mar 1096.0
08May 1105.0
08Jul 1047.0
08Sep 1059.4

So you have steep backwardation between May/Jul and slight contango between Jul/Sep. I've no real experience studying the movements of these contracts though and this could even be a normal seasonal state of affairs.

Surely agri is still a broad category - it is a category that has only recently taken off.

jon3001

wombat42 wrote: »

Does Rogers mention and recommend FORWARD etfs ?

He mentions and recommends the RICI:
http://en.wikipedia.org/wiki/Rogers_International_Commodity_Index

As far as contract dates go:
For each commodity most valid (most active traded from committee point of view) expiration is chosen to be included into RICI calculation. Index is being rolled at the end of each month to contracts that are expected to be most active during next month. Generally, if the next calendar month of a futures contract includes a first notice day, a delivery day or historical evidence that liquidity migrates to a next contract month during this period, then the next contract month is intended to be applied to calculate the index – taking legal constraints into account.

purch

Does Rogers mention and recommend FORWARD etfs ?

Surely agri is still a broad category - it is a category that has only recently taken off

You try to help, you try to give the benefit of your experience..............but as always............

Why bother ????

cloud_dog

wombat42 wrote: »

Surely agri is still a broad category - it is a category that has only recently taken off.

Wombie, you missed the point........... Jon3001 was trying to answer your previous post about why forward ETF's had fallen in value.

I think you need to spend more time looking in to why things go up / down rather than just identifying the latest / best performers.

You've done exactly the same on the other board in relation to ML G&G and Investec Gold.

cloud_dog

rail.link

All the gallants seem to be charging into commodities. Think I'll be quietly edging towards the exits.
This is not a prediction, purely a personal view. :beer:

As for the next 10 years, I haven't got a clue. If something looks cheap enough to be value (personal yardstick, again), I'll probably pick it up.

jon3001

rail.link wrote: »

All the gallants seem to be charging into commodities. Think I'll be quietly edging towards the exits..

So you are selling your commodity holdings?

rail.link wrote: »

As for the next 10 years, I haven't got a clue. If something looks cheap enough to be value (personal yardstick, again), I'll probably pick it up.

What are you buying at the moment?

purch

All the gallants seem to be charging into commodities.

Yes, we could have a few Nelson Bunker Hunts in the making...

I think that there could be a case made for some inter-governmental intervention in the Soft Commodity markets if the continued speculative investing continues. The price and availability of these Commodities are so vital to the wellbeing of the World economy, that speculative bubbles cannot be allowed to grow and burst in these markets unchecked.

Wombie, you missed the point...........

............thats a shock !!!!

Browntrout_2

what exactly is a commodity anyway, copper, water, inkjet refills, cabbage?

I think equities are the investments I will choose and stick with although I will admit a large percentage of my portfolio is involved in removing natural resources from the ground and processing it for resale!

Gold is skyrocketing and there are electricity power shortages in South Africa which is causing mines to shut down, who is buying the gold though, is it speculators chasing a fad or real demand, a perfect storm maybe!

However when the music stops will everyone get a seat?

jon3001

Browntrout wrote: »

what exactly is a commodity anyway, copper, water, inkjet refills, cabbage?

Typically they're the raw materials of industry. But that's not the same thing as a commodity futures contract. Produces and consumers of commodities can attempt to hedge against adverse price movements and, in the long run, the traders in the middle are reward by a risk premium. Think of it as selling insurance.

Browntrout wrote: »

I think equities are the investments I will choose and stick with although I will admit a large percentage of my portfolio is involved in removing natural resources from the ground and processing it for resale!

Yes - it's quite common for investors to shun a whole asset class despite a long history of favourable returns and powerful diversification effects within a balanced portfolio. Commodities are uncorrelated (and sometimes negatively correlated) with domestic equity, international equity and property. Over the long-term an annually rebalanced portfolio consisting of equities and commodities combined has had higher returns and lower volatilty than one consisting of either equities or commodities alone.

Browntrout wrote: »

Gold is skyrocketing and there are electricity power shortages in South Africa which is causing mines to shut down, who is buying the gold though, is it speculators chasing a fad or real demand, a perfect storm maybe!

Gold has had a long history as money and a store of value before fiat currencies.

Some people are buying because their government is devaluing their paper currency. GBP has been reaching new lows against the Euro recently and has lost about a further 8% against other major reserve currencies such as CHF and JPY since Christmas.

In emerging markets such as India and China a wealthy new middle class is emerging and those cultures have traditionally valued gold as a store of value. This includes gold jewelry which in ancient times was a means of 'wearing' your wealth so you could carry around without inconvenience.

These economies (especially China) are generating high demand for commodities (such as energy and industrial metals) to grow their industries and infrastructure and will want to spend their new wealth on better diets leading to increased demand in agriculture and livestock. The potential demand from 2.5 billion people is going to be hard to ignore.

Browntrout wrote: »

However when the music stops will everyone get a seat?

Commodities have been traded for a few thousand years so far... It's basic stuff we'll need in the future too.

rail.link

jon3001 wrote: »

So you are selling your commodity holdings?

Yes, I'm substantially out.

jon3001 wrote: »

What are you buying at the moment?

Nothing, until something looks interesting.