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.

Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: Katelew who wrote (413236)	2/26/2011 10:09:59 AM
From: Murrey Walker	1 Recommendation Read Replies (1) \| Respond to of 793911

Kate, I think packers (food processors) trading commodity futures, and the street doing this, are two different animals. The packers (and farmers for that matter) buy future contracts to the extent that they protect their price fluctuations as much as possible, and to this end, they differ from the pure investment strategies used by the street to generate income on those transactions. Obviously there are exceptions to the rule, but, by and large, food processors are in the business of filling the food pipeline and keeping price fluctuation to a minimum. To me, that's a big difference. It all depends on which game you're playing, doesn't it?

To: Katelew who wrote (413236)	2/26/2011 11:45:31 AM
From: Brumar89	Read Replies (1) \| Respond to of 793911

Sounds to me like speculators are at best pushing prices up or down over whatever the fundamental trend is for a time and any period over the trend is going to ultimately be compensated for a period under the trend: Agricultural “products had a great run, but now the opportunity appears to be in oil and gold,” said Walter “Bucky” Hellwig, who helps oversee $17 billion at BB&T Wealth Management in Birmingham, Alabama. “If I am the hedge-fund manager, I’m getting killed on the long grain positions.” ... “The trend itself is based on fundamentals, but price moves are magnified on the upside and downside by demand from speculators,” said James Paulsen ...

To: Katelew who wrote (413236)	2/26/2011 12:21:42 PM
From: J.B.C.	Read Replies (1) \| Respond to of 793911

When speculators BUY, they create demand for something, which will bring more of that item to the market. When they sell, it creates supply. Ultimately speculators have little influence on overall price. The Hunt brothers tried to "corner" the silver market in the late '70's, the problem they found as price went up so did supply as more and more producers were able to bring silver to the market at any cost. Seniors were selling their "silver"ware. People were selling the real silver coins that were horded. The Hunt's couldn't keep up, there were other issues as well. But ultimately the speculators were a non issue.