Hi Tyc:
Copper rose from $1.25 in mid 2004 to roughly 3.80 in mid 2006. Lots of volatility followed before it touch $4.00 in May 2008. In the months preceding that $4.00 peak, Veneroso stacked up plenty of hard evidence relating to hedge funds that took physical delivery of copper, even as actual demand peaked and faltered. Yes he was a bit early, but he provided solid research nevertheless. He has also provided plenty of additional research in other commodities,.... also frequently early but in momentum markets, it is easy to be "early".
Like many other market researchers that I admire, he doesn't try to make a market timing call, but merely puts the facts and evidence that he uncovers, in front of folk. For me, that is valuable.
Currently, no matter where one looks, global activity is slowing, yet copper, which typically lives and dies with industrial/construction activity, has been rising relentlessly since it fell to $1.30 early this year. Veneroso thinks that rise in price doesn't make sense, so he has been digging. And he has found some interesting evidence to back his perspective.
As far as waiting for the market to tell you that it is time to buy puts, fair enough, so long as the volatility and premiums don't make it a lousy trade. Unfortunately, that is usually what occurs and it is at that point that puts indeed "become expensive".
I am not attempting to suggest how anybody should play copper or any other commodity. I am merely providing some info that might be useful to those who do.
With respect to your request that I explain "investment demand for,...." etc. perhaps you could let me know why you make such a request.
Why are you "surprised and disappointed that I give weight to someone else's opinion"? The current price of copper doesn't jibe with the crummy state of the global economy and Veneroso cites a fair amount of decent evidence to back his point of view.
Best,
Earlie
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