Brad Zigler

The Three C's of Commodity ETF Returns

Contango is NOT linear, but varies, especially with the petroleum complex, on supply. Contango, in its strictest sense, is actually the spread between deliveries in EXCESS of full carry. There was, earlier this year, an active carry trade in crude oil reflecting the depressed price of spot oil. As inventory was worked off, contango shrank. There's now no carry trade obtainable, though there's still a back month premium.


On Sep 29 12:56 PM searcher wrote:

> "Contango reflects the carrying charges, or the costs of financing,
> insuring and storing a cargo until the delivery date specified by
> a futures contract." True enough, but these factors would obtain
> for any commodity and would be reasonably linear as a function of
> the forward terms. Expectations for future demand and of current
> liquidity are more at play for some commodities than others. These
> factors are not linear.

A Good Thing: Agribusiness Future Isn't Golden

It's the very fact that they ARE different that makes the relationship significant.

Ask yourself this: why would investors vote with their feet and dollars bymoving from gold to nonfinancial commodities?


On May 04 05:40 AM Libourne wrote:

> What a load of "Tosh"............how can you compare two very different
> ETFs?
> One feeds the other does not if you get my drift.

A Good Thing: Agribusiness Future Isn't Golden

Sector rotation in commodities isn't novel. Gold's a safe haven play not necessarily associated with price inflation. Rotating out of gold and into nonfinancial commodities is indicative of a changing perspective on risk.

A Good Thing: Agribusiness Future Isn't Golden

What your seeing what is usually referred to as "sector rotation." Capital is now embracing risk rather than averting it. And THAT's an important economic bellwether.

Is Monsanto a Template for Agribusiness?

Hello?

Commodity sectors that didn't languish whilst agricultrals stagnated include precious metals, reflected in the November-to-February gains earned by the PowerShares DB Precious Metals ETF (DBP) and base metals proxied by exchange-traded products such as the PowerShares DB Base Metals ETN (BOS), which rallied in the fall and winter.


On Apr 04 08:35 AM anopenmind wrote:

> ..."the entire ag sector represented by the fund (seekingalpha.com/symbo...)
> have been languishing in a trading range since last fall."...Hello.
> Has not most other segment funds languished since last fall? Still,
> when we look at major individual stocks in the fund, any that have
> not performed well in past, have pretty good balanced sheets today,
> and very likely will perform well during next several years? This
> segment is not the U.S. autos, airlines, nor many other segments
> that may need years before getting out of ruts. Perhaps Y2009 less
> product will be consumed, as population continues to grow, but Y2010
> and beyond?

Commodities vs. Commodity Stocks Redux

Fred & Sakata -

To get longer-term perspective on gold/gold stock performance and a look at the current dynamic, see today's "Desktop" at Hard Assets Investor: www.hardassetsinvestor...