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To: Oeconomicus who wrote (134082)	11/2/2001 3:32:15 PM
From: craig crawford	Respond to of 164684

>> Hmm. A twelve-year chart like that hardly supports your bullish view of commodities, unless you think they should go up just because they are down << unlike failed business plans that tends to be the case with commodities. low prices are the cure to low prices. >> One might have used the same argument for buying YHOO or AMZN at 50, 40, 30, 20... << yahoo and amzn were overvalued at 50, 40, 30, and 20. commodities are by historical standards cheap, just like stocks were in 1982. commodities have been in a nasty bear market for a couple of decades just like stocks were in 1982. the yhoo and amzn comparisons are more like commodities in 1980-1981. due for a long multi-year slide after a bubble has popped. just as commodities hadn't bottomed only 18 months after the top, neither have yhoo and amzn. >> Base on the consensus economic outlook, you should be more concerned about breaking support and heading into a deflationary spiral. << hah! what do you call the last few years? we have been in a deflationary spiral for a while now. people are acting as if the deflation hasn't hit yet. it's closer to being over than just starting. >> Your bull market won't come until we are well into a recovery and, according to most here, that's a long way away. << first of all commodities are forward looking just like stocks. they will bottom 6-9 months ahead of the actual recovery. so if the economy recovers 6-9 months from now you better start looking at buying commodities real soon. >> Until then, you've got further downside risk << i guess that's why i haven't gone hog wild on the commodities yet huh! i think it's quite apparent that stocks have further downside risk as well! >> The early '90s recession officially ended April '91, but the CRB dropped for another year and a half after that << commodities are a different animal than 10 years ago. they are more dependant on the world economy, not just the us economy. furthermore, commodities weren't cheap in '91, they were still in the midst of unwinding their bubble. not only that, look at commodities in late '98 and early '99. they recovered quite quickly anticipating the rebound in asian economies. i expect commodities to lead even more this go around. i do not believe the economy or stock market will recover while commodities lag. i believe it will be the other way around. >> Are we closer to the beginning or the end of a recession? << in the 70's the economy had some fits and starts but never really gained any momentum. commodities didn't seem to mind. they exploded. >> And when recovery comes, based on the last recovery, you might see the CRB rise by 20-25% over 3-4 years. Personally, I'd rather be in my stocks. << that's where you make your mistake. you still have the mindset that it's worth it to bottom fish stocks because when they finally do bottom they will start some fantastic new bull market and you will make several hundred percent returns. sorry, but the only way that will happen is if the dow drops several thousand points and the nasdaq and s&p slide to the triple digits. of course if you timed the bottom in 1932 you could have caught a nice ride for a year or two. but most people have been trying to catch the bottom and they have gotten burned. furthermore, you are still using the same mindset of commodities in a bear market. i'm sure back in 1982 people said that maybe stocks will finally rally sometime and you will make 30 or 40%, but it surely will never go up 10 fold. well the same sentiment applies to commodities. you are looking at recent rallies in the crb (within a bear market) which are only 30-40%, and you assume the next rally will be just like the last. well i'm telling you that the crb will see triple digit percentage gains, and your stocks will not. of course just like you could far outperform the averages the last decade in the bull market in stocks, if the crb doubles you can generate fantastic returns in commodity related plays.