Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Taikun who wrote (60069)	2/6/2005 7:40:46 AM
From: dalroi	Read Replies (1) of 74559

David fwiw i think one could see those trusts as convertible commodity bonds ie 1/ they have nice yield as do bonds 2/ there yield is correlated to the futures in that commodity 3/ BUT they can also be seen a a stock ie fixed cost = A spot price commodity is B lets assume for sake of argument that the fixed cost stays equal then i can see the next senario when spot price is little above A (we dont have much gain)we get the yield if spot price moves up a bit we get the leveradge ie a co with real earnings which should propel the stockprice further just look at fdg versus the coal spotprice its rissing much faster then the spotprice :-) futures cant be taken over furthermore we cant have market limit down in the stocks only remember stock prices reaches their max a few years before commodities do so given that the mean length of a bull in commodities is around 16 years and we started to rise in 2000-2001 which gives us 2016-2005 is 11 years minus 3 for peak give us another 8 years :-) cheers S as long as my employees dont talk about silver /gold lead zinc soybeans etc i"m very very comfortable in those :-) once they start i put stops under it

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