Commodities - General News 02 (May 10 - Jun 14)

[winston]

It's FINALLY Time to Buy Commodities By Dr. Steve Sjuggerud
Monday, April 28, 2014

I couldn't believe it…

If I didn't hear it myself, I wouldn't have believed it.

Here's what happened…

Last week, at a private investor conference in the Bahamas, two legends in commodity investing said they were "not that bullish right now" on commodities.

I'm talking about Doug Casey and Rick Rule. These guys have made their fortunes from investing in commodity-related investments.

What does that mean when two living legends in commodities don't love commodities?

You can look at it in two ways:

1) Jeez, these guys know commodities, so the sector must be about to fall.

Or…

2) When even the living legends are no longer bullish, then the bottom is in – every one that wants to sell has sold.

So… which is it?

When you think about it, we've been through a crazy few years… The prices of stocks and bonds have soared, thanks to the Fed's long-term commitment to near-zero-percent interest rates.

But surprisingly, investors have completely left commodities behind – so far. But that may be changing – right now.

Our True Wealth Systems computers tell us that it's time to buy commodities today.

In fact, for the first time in as long as I can remember, all of our True Wealth Systems physical-commodity indicators were in "buy" mode last month.

With our computers flashing "buy" signals, and two resource legends "not that bullish," I believe commodities could move much higher starting now. The problem is finding the right way to buy them. (It is harder than you think.)

However, we've found an excellent way to make the trade. It's called the SummerHaven Dynamic Commodity Index (SDCI). This index strives to take advantage of situations in commodities that tend to happen over and over to produce superior returns.

In short, instead of buying and holding all commodities like a typical fund, the SDCI only holds the commodities that history says should perform the best over the next month.

SDCI's exact criteria are a bit complex. And the gory details aren't all that important today. What's important is that it works. Over the last 20 years, this index crushed the returns of the benchmark commodities index (CRB). Take a look…

While the CRB increased just 155% in value, the SDCI returned nearly 10 times that gain… up a staggering 1,426%. And based on annual gains, the SDCI tripled the return on general commodities… up 14.5% a year versus 4.8% a year for the CRB.

With history as our guide, the index we're buying into today does exactly what we want to see… it produces outsized gains the smart way… with less volatility.

Now you can't invest directly in the SummerHaven Dynamic Commodity Index… But luckily there's a simple ETF you can buy. It's called the U.S. Commodity Index Fund (USCI).

The historical record for this fund is clear. Over the long term, shares of USCI will beat commodity prices in general. Its benchmark tripled the annual return on commodities over the last 20 years!

Conditions are in place for commodities to do well… The U.S. economy is growing, and world governments are printing money. With big gains in stocks and real estate, investors have given up on commodities. Heck, even two commodities legends aren't interested.

Meanwhile, our TWS computers continue to flash "buy." I'm taking their side. And shares of USCI are the absolute best way to make the trade.


Source: Daily Wealth

[behappyalways]

“The likelihood of El Nino remains high, with all climate models surveyed by the bureau now indicating El Nino is likely to occur in 2014. Six of the seven models suggest El Nino thresholds may be exceeded as early as July,” the authority has warned. “El Nino has an impact across much of the world, including below-average rainfall in the western Pacific and Indonesian regions, and increased rainfall in the central and eastern Pacific.”

Food price alert as experts warn of new El Nino
http://www.telegraph.co.uk/finance/comm ... -Nino.html

[winston]

This could be the "last frontier" of the resource world... and a wave of investors is headed there now

Source: Bloomberg

http://thecrux.com/this-could-be-the-la ... there-now/

[winston]

Is China Cracking? By Sean Brodrick

Signs of a near-term slowdown in the Chinese economy are apparent. And China’s economy is so large and intricate that any slowdown there could have a big impact on investors here in the U.S.

In particular, I’m concerned about:

Agriculture. With a fifth of the world’s population but only 8% of its farmland, China is America’s largest agricultural export market.

Coal and industrial metal prices. China is coming down harder on big polluters, and on the production and use of metals. That could fuel volatility in iron, lead, aluminum, copper and coal prices.

Oil Prices. If China’s growth slows enough, that will weigh on global oil prices.

Source: Investment U

http://www.thetradingreport.com/2014/05 ... -cracking/

[winston]

Three experts talk commodities: An update from the Bahamas

by Matt Badiali

Source: S&A Resource Report

http://thecrux.com/three-experts-talk-c ... e-bahamas/

[winston]

How Much Should You Have in Commodities? by Alexander Green

I'm often asked how much of an investor's portfolio should be in commodities. If you're a trader or speculator, that's up to you.

But a long-term investor with a five-year-plus horizon? Virtually none. (The commodities allocation in our Gone Fishin' Portfolio, for instance, is zero.) Here's why...

It's not unusual to hear reports in the media from time to time about how human beings are "using up" the world's resources or that we are "running out of oil." Don't believe it. And certainly don't bet on it.

Price Pressure

Innovation and technology undermine prices for most commodities. We've seen this in agriculture, where irrigation, mechanization, genetic modification, and new pesticides and fertilizers all boost productivity.

Sure, you've seen coffee shoot up over 90% this year and hog futures climb nearly 50%. But these are one-offs. The spike in coffee is due to a drought in top exporter Brazil. And a virus that has killed millions of pigs is behind the run-up in pork bellies.

The same is true of "peak" theories of oil and gas. It seems like only yesterday that the national media was reminding us about our "addiction" to foreign oil. But new technologies like fracking and horizontal drilling have boosted production sharply. Last year we surpassed Russia as the biggest producer of oil and gas in the world.

The prophets of doom never foresee the new advances and increasing efficiencies that undermine future scarcity. When whale oil began to run out, we started using petroleum. When farm yields stalled, new fertilizers were introduced. When glass fiber debuted, demand for copper fell.

Yes, raw material prices had a good run from 2000 to 2010. The Dow Jones-UBS Commodity Index more than doubled. Copper gained 417%. Cotton jumped 184%. But that was when China - which consumes 40% of the world's commodities - was growing at more than 10% a year. That's not the case today.

And commodity prices - which had a lousy three decades in the run-up to 2000 - are back under pressure. Yes, they're up a bit this year, but they plunged 9.5% in 2013, lagging stocks, bonds and real estate badly.

Not a Diversifier

Some pundits - especially those who sell commodity products for a living - insist that raw materials are a good diversification. They're not. To own them, you have to take money out of stocks and bonds, both of which have handily outperformed commodities over the long haul.

Moreover, 17% of the market value of the S&P 500 consists of companies in energy, utilities and basic materials. So you likely have exposure to commodities - and these companies often turn a profit even if prices stagnate.

How about as an inflation hedge? There hasn't been much inflation to hedge lately. Sure, you can point to higher prices at the pump or the doctor's office. But I'll point to lower prices (and far superior quality) on homes, cars, electronics and more.

Even if inflation does raise its ugly head again, raw materials are hardly the only - or the best - inflation hedge.

Your home is an inflation hedge. Treasury Inflation-Protected Securities (TIPS) are an inflation hedge. And, unlike gold or commodities, TIPS actually guarantee that your money keeps pace with inflation, something gold hasn't done over the last 35 years.

(I'm not arguing against gold, incidentally, something you should hold in your portfolio for the same reason you keep a spare tire in your trunk.)

But a substantial allocation to commodities? Only if you're a speculator playing with money you can afford to lose.


Source: Wisdom of Wealth

[winston]

Thriving In The New Economy: “A Phenomenal Way Of Creating Wealth”

By Mac Slavo

As the global economy runs headfirst into potential calamity the majority of people will find themselves living in a world where once booming job markets get wiped out, incomes dwindle, and our dollars buy less and less on an annual basis.

In times like these it’s critical to look at historical factors, as well as those individuals who have successfully navigated troubled waters before, to give us guidance and insight on how to tackle the challenges of an uncertain future.

Source: SHTFplan.com

http://www.thetradingreport.com/2014/05 ... 5-91746477

[winston]

China: MIIT releases proposal of trimming industrial overcapacity
May 8, 2014

A working group of MIIT had recently announced its proposal of eliminating industrial over-capacities.

According to the document, the task force targets to remove 19 million tons of iron capacities, 28.7 million tons of steel capacities, 12 million tons of coal capacities, 2.65 million tons of paper capacities, and 35 million tons of plate glass capacities in 2014.

Source: AAStocks Financial News

[winston]

These resource stocks all have one BIG thing in common

Source: The Gold Report

http://thecrux.com/three-resource-exper ... catalysts/

[winston]

These commodities are officially “no-brainers” now

By Matt Badiali

Source: S&A Resource Report

http://thecrux.com/its-official-these-c ... er-prices/