Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Madharry who wrote (29247)	12/13/2007 2:03:48 PM
From: Jurgis Bekepuris	Read Replies (1) \| Respond to of 78842

I agree that this might be a relevant reason to buy commodities instead of their producers. The next question then is: all commodities are already up a lot. Which would you still buy? What are the targets of their prices and why? As I said, I have only thought about oil, but I am not sure oil is going up another 100% from here anytime soon. And remember: you need for commodity to go up a lot to make good returns, since commodity is not a company and is not "growing". Commodity futures usually sell at a discount current prices for that reason. They are different from stock options in that respect, i.e. future will always be around current price + storage cost, since otherwise you could just buy commodity now (theoretically), store it and sell to cover the contract in the future. It's a bit more hairy than that but essentially this is both good news/bad news to investors. The good news is that futures might not cost as much as options. Bad news is that there is no "organic" growth which is what gives stock investing natural boost.