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Dr. Duru  

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  • Home Builders Hit A Buzzsaw Named KB Home [View article]
    Looks like it will be impossible for home builders to regain momentum given other macro events and rising volatility. Will have to stay patient for next entry points again (minus KBH).
    Jan 15, 2015. 11:40 AM | Likes Like |Link to Comment
  • The Commodities Crash Playbook: A Long Overdue Rewrite And Revision [View article]
    I am slowly but surely coming up with my next piece on precious metals. I touched on it here http://bit.ly/1AuFR9r as I noted gold's resilience in the face of the last 7% of upside to the dollar. The correlations are not straightforward or consistent, but the relationship seems to work sufficiently at the extremes.

    The general assumption is that a strong dollar equals weaker precious metals and vice versa. This is based on thinking of precious metals as their own currencies. I have been de facto long-term bullish on gold and silver since the Greenspan era ushered in an era of a Fed much more willing to generate easy money policies. This worked very well until the massive run-up into the peak of 2011 (a peak coinciding with almost all other commodities). Now, I just mainly watch, no longer convinced like my fellow gold bugs that every decline means a bottom is at hand.

    Having said that, if gold breaks out from the most recent consolidation, I will get more bullish again...but only if I see definitive signs that the U.S. dollar has topped out or is getting weaker.

    Also, I used to think that precious metals, and commodities in general, had long-term currency support. That is, paper currencies can increase in supply at a much greater pace than the supply of commodities. However, our current experience with stubborn disinflation despite a historic amount of monetary easing has thrown this assumption for a major loop.

    I hope that made sense.
    Jan 12, 2015. 11:49 AM | Likes Like |Link to Comment
  • The Commodities Crash Playbook: A Long Overdue Rewrite And Revision [View article]
    Right. I have not even contemplated investments along the entire supply chain. I would love to know about any packaging companies that are doing both agricultural packaging AND consumer goods packing (that is, Amazon and other on-line shipping)
    Jan 12, 2015. 11:36 AM | Likes Like |Link to Comment
  • The Commodities Crash Playbook: A Long Overdue Rewrite And Revision [View article]
    And thanks for reading!
    Jan 12, 2015. 11:35 AM | Likes Like |Link to Comment
  • The Commodities Crash Playbook: A Long Overdue Rewrite And Revision [View article]
    There is strong underlying demand for many food products. When you say "high", I am not sure what comparison you are making. I am also not sure which meats. However, I wrote about the strong demand for pig meat from China and its implications for corn here (again, looking back, I would not have used the phrase "long-term" in my title): http://seekingalpha.co...

    Dairy has been rising in costs for a while. I remember hearing a Marketplace segment on this. Sorry I don't have the link ready at hand.
    Jan 12, 2015. 11:35 AM | Likes Like |Link to Comment
  • The Commodities Crash Playbook: A Long Overdue Rewrite And Revision [View article]
    Yes. That is the exact article that sent me down this path. My lessons since then motivated my rewrite here. Grantham has apparently written at least 2 follow-ups on this thesis since then. In the next month or so, I hope to review these and write about my assessment. I doubt they will change my revised thinking, but they should be worthwhile reading.

    Grantham was at least correct about a coming decline in commodities, it just has not played out the way he laid out. Moreover, the notion of a perpetual supercycle seems poorly supported to me. It looks like more of the same bull/bear cycling to me.
    Jan 12, 2015. 11:31 AM | Likes Like |Link to Comment
  • The Commodities Crash Playbook: A Long Overdue Rewrite And Revision [View article]
    Good point. Do you have some good sources for tracking replacement cost?
    Jan 12, 2015. 11:28 AM | Likes Like |Link to Comment
  • The Commodities Crash Playbook: A Long Overdue Rewrite And Revision [View article]
    I appreciate the kudos!
    Jan 12, 2015. 11:27 AM | Likes Like |Link to Comment
  • The Commodities Crash Playbook: A Long Overdue Rewrite And Revision [View article]
    I am bearish on oil given the current dynamics. I also think there are still way too many bottom-fishers out there to suggest the pain is over. I can't make an aggressive play into oil until I see demand surprise to a significant upside and/or supply dynamics start to constrict. Since I think this current swoon is more about supply than demand, I am watching the supply side the closest. In the meantime, I have dabbled a bit. I bought ECA just because it is a long-time favorite, and I can't resist nibbling with it so cheap here. I also bought MEMP near the bottom after learning the company hedged production out 5 years before the oil collapse. So, it seems MEMP has been thrown out with the bath water.
    Jan 12, 2015. 11:27 AM | Likes Like |Link to Comment
  • The Commodities Crash Playbook: A Long Overdue Rewrite And Revision [View article]
    LOL. Yes. You are taking a line from my article. Don't worry. I am not going to take on anything else, like financials, or retail, or drugs, or healthcare, or... :)

    Thanks for reading!
    Jan 12, 2015. 11:24 AM | Likes Like |Link to Comment
  • The Commodities Crash Playbook: A Long Overdue Rewrite And Revision [View article]
    I would be interested in hearing more. Do you have some examples of long-term plays that would fit your definition of a commodity asset? I mentioned some of the major oils that could qualify I suppose.

    My argument is perhaps a risk/reward argument. Given the frequent risks of severe price corrections from supply-demand dynamics, it just seems to me now that commodities are best bought/sold at extremes.
    Jan 12, 2015. 11:23 AM | Likes Like |Link to Comment
  • The Commodities Crash Playbook: A Long Overdue Rewrite And Revision [View article]
    Agreed. I didn't even address the fertilizers directly in this piece. Given I am an ag bull, I like the fertilizers. I definitely moved in to buy after POT and others crashed. In general, just have to be prepared for commodity plays to swing from one extreme to the next.

    As far as the strongest producers, you do have a few companies that can keep figuring out how to hold onto margins through the price swings. I hope to identify those in detail in the future. Certainly the major oils qualify like XOM and CVX since their long-term charts have been bullish for decades.
    Jan 12, 2015. 11:16 AM | Likes Like |Link to Comment
  • Crude Oil Is Trapped In A Bear Raid; Not Its Fundamentals [View article]
    I always love your analogies!
    Jan 10, 2015. 12:52 PM | Likes Like |Link to Comment
  • It's Time To Buy The Oil Panic Of 2014 [View article]
    Great! Thanks for the additional detail. I have seen several pieces on LINE and it just seemed to be a favorite for oil bottom-fishers all the way down. I read two and was simply not convinced. This is the best info I have seen. I agree that the *current* technical setup looks much more like a bottom than any of the other slippery slopes at higher levels. I will take a look at BBG as well.
    Jan 9, 2015. 12:30 PM | Likes Like |Link to Comment
  • 2014's Santa Rally Delivers Gains As Expected And Ends With Two Historic Moves [View article]
    Thanks for the kudos.

    I thought about whether I should take into account the truncated trading day or the way it fell during the week, relative to holidays. I couldn't get all the info ended to compare trading hours over the years. I suspect looking at where the day falls in the week relative to the holiday might be splitting hairs too much (this is after all a "fun with numbers" exercise)...but perhaps I go ahead and take a look some other time.
    Jan 8, 2015. 11:40 PM | Likes Like |Link to Comment
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