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Strategies & Market Trends : Commodities - The Coming Bull Market -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (57)	6/2/2001 5:11:42 PM
From: marcos	Read Replies (1) \| Respond to of 1643

'Chronic under investment in the resource and basic commodity sector coincided with excessive investment in technology, media and telecommunications. Both conditions will take many years to correct. Investors looking for attractive returns in the winners of the past five years will be sorely disappointed. Manic excesses take decades to unwind, as was the case for the hard asset boom fostered in the 1970’s. In the frenzy of an investment bubble, mistakes are made that take years to discover and even more to work out. The new economy is a bust, and will stay busted for the investment time horizons of most. The real excitement will be in the revival of the old economy. ' This would seem to ring true, to many of us ... and yet - we are believers ... we like the concrete tangible things because they are imaginable, touchable, countable, weighable .... real ... however, there is precious little sign of price improvement in the commodities themselves - stockcharts.com .. [anybody know the composition of this index?] [and of this one - stockcharts.com ] I have a considerable interest in copper through aur.to, and its shareprice has recovered to some degree recently ... so is that anticipation of improvement in PoCu, or company-specific? ... some of each probably ... but they all have leverage to the commodity, and without recovery in the product prices, they won't go far. [edit] - this is a pretty good site for charts of the basics - futures.tradingcharts.com

To: russwinter who wrote (57)	6/2/2001 7:51:06 PM
From: craig crawford	Respond to of 1643

Thanks. The article adds more depth and some additional viewpoints which just couldn't be put into the topic header due to space constraints. My thoughts echo most of what was said. I liked how he started off talking about natural gas and commodities in general, but I was disappointed when he steered the article toward conspiracies surrounding gold, and he even made a suggestion that gold should parallel the seven-fold price movement of NG. Well there are some major differences between natural gas and other energy related natural resources and gold. Eighty percent of gold demand is for jewelry, and that demand can be quite elastic. Energy is not totally inelastic, but it is much less so than gold. People need oil, gas, and coal right now. Who needs gold? There just aren't that many industrial uses for it. It could take several years before central bank selling exhausts itself and production slows to the point that there are serious shortages. I'm not saying gold is a terrible investment here, I think it could hit $500 within the next 5 years, which is a decent return. I would rather hold unhedged gold stocks for the next 5 years than richly valued tech stocks. But there is a big difference between things that we need to function in our daily lives such as food, energy, clothing, basic materials etc, and jewelry which just sits there and looks pretty. Many of the other base metals have more out of whack supply demand relationships than gold and they serve critical industrial uses. We need things like copper, zinc, lead, aluminum, nickel, etc. I haven't done enough research yet to run across a huge number of commodities bulls, but the few I have run across usually wind up talking about gold or silver. Jim Rogers is the only commodities bull I am aware of who has correctly been bearish on gold all the way since he shorted it at $675 back in 1980. I would like to find some commodity bulls who have something positive to say about other commodities other than the always talked about energy & precious metals. Nonetheless, I am still very interested in following the volatile action in gold recently and I am keeping one eye on the lookout to see if technology can come up with some new uses for the metal that might actually increase demand in a significant way. Most gold bulls are betting on total financial collapse or short covering rallies as the impetus for some four digit explosion in price. I'm more interested in seeing if science can come up with some new application that will convince central bankers to hold out for higher prices, and will spur enough demand to meet any selling head-on. Runaway inflation or massive short-covering would just be a bonus.