Dan Weiss

Why I Don't Own Commodities

I am of the opinion that growth in China, India, Russia and many of these other countries is not going to be anywhere close to the 10-15% that we have experienced in the past five years. Keep in mind that China is still a communist country and they are actively looking to decrease the growth rate in their country to curb inflation. Countries do not have GDP growth in the double digits for multiple years in a row and significant speedbumps and potentially a recession is very likely in the country in the not too distant future

Why I Don't Own Commodities

and that the prices of these commodities hold up for those who are long. It is possible that certain commodities (maybe gold) hold up but I dont see prices of oil, wheat, corn, cotton, etc. holding up long term. In the short term, anything can happen just look at the tech and telecom names of the late 90s or the housing stocks in the middle part of this decade.

vestopia.com/danw

Why I Don't Own Commodities

Thanks everyone for their responses. I should put in context that the article as published on Vestopia is not fully about commodities (it was shortened somewhat on this site). Id like to ask everyone if they really think that the normalized level of oil prices is going to be at $105 per barrel, for gold at just shy of $1,000, etc... I could be wrong but at these price levels I am finding much better opportunities in other sectors of the market which are also experiencing growth which I see as more sustainable. Im hoping for everyone's sake that both I am right in my own picks in areas such as education software, environmental consulting, asset management, consumer staples, health care (ex-HMO and insurers)

Why I Don't Own Commodities

I also remember that just 9 short years ago everyone in the world said that we had an oversupply (in fact an endless supply was quoted by such sources as the Economist) of oil and other commodities and we saw oil prices crater to $10, gold at $250, etc.. So the question is are we really in a secular bull market for commodities or is this yet another case where so much money is chasing a sector that is forcing prices artificially high?

vestopia.com/danw