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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: Tommaso who wrote (43123)	11/8/2011 12:35:59 PM
From: Real Man	Respond to of 71455

I'm not really bearish on NG here, gas price didn't go anywhere since bottoming at 2 a few years back. From a trading standpoint, I would be looking to get long NG futures for a couple of months if I traded it. From investor's point it's a lost market due to record storage costs. You have to pay roughly what Greece pays for it's debt to be long NG, that is the problem, at least, the main problem for UNG and such commodity investment vehicles. This eats your capital very fast even when NG spot price does not move! Extremely high cost of carry in a glut market makes it unattractive. The glut may have something to do with shale gas, etc., but it's not actually the price of the commodity that makes NG a bad investment. So, you can sure win on the long side of the market if you are a good trader, but you have to bet that upside price move in the futures will compensate for storage costs you have to pay (as you roll over). If you could get NG and store it in your back yard for free, you would not lose anything on it -g- sfgate.com

To: Tommaso who wrote (43123)	11/8/2011 7:55:56 PM
From: Real Man	Read Replies (2) \| Respond to of 71455

FWIW, the negative yield trap applies to all consumed commodities except gold. It's a major flaw of any commodity futures based fund, making these unattractive as investments. Essentially you are buying an inflation-protected bond with a significant negative yield. Unless things go truly haywire with inflation, gold is better? You can certainly invest in commodity producers, but that's as far as I would go. I would not touch any commodity futures ETF, except for trading. Take a look at a long term chart for this, for example, and fluid is easier to store than gas. google.com And compare it with this: ycharts.com