Comments on Salman Khan's articles RSS Syndication from SeekingAlpha.com http://seekingalpha.com/author/salman-khan/articles http://seekingalpha.com/article/82043-global-inflationary-pressures-no-end-in-sight?source=feed#comment-409666 409666 Mon, 02 Mar 2009 13:24:19 -0500 http://seekingalpha.com/article/93532-is-the-bull-run-in-commodities-over?source=feed#comment-244645 244645 Wed, 03 Sep 2008 13:04:48 -0400 http://seekingalpha.com/article/93532-is-the-bull-run-in-commodities-over?source=feed#comment-244500 244500 Wed, 03 Sep 2008 11:05:27 -0400 www.financialsense.com...


]]> http://seekingalpha.com/article/93532-is-the-bull-run-in-commodities-over?source=feed#comment-244488 244488 Wed, 03 Sep 2008 10:53:25 -0400 Back to the main point. Epeon said: "So, is a correction in commidity companies possible. Sure, but it will only be a correction." His statement is correct. David Lentz also said some well-written points. Sure speculation plays a part in oil price, but not as much as you think. Let me quote our own U.S. Energy Secretary, Sam Bodman:
“Market fundamentals show us that production has not kept pace with growing demand for oil, resulting in increasing prices and increasingly volatile prices.”
“World oil demand has increased significantly in the last few years despite higher prices. China, India, and the Middle East are the largest contributors to this growth as they consume more energy to fuel economic growth."
“While increases in near term oil production are welcome and necessary, fundamentally the market needs to see investment in increasing the longer term production capability... The world faces an extraordinary time that, in my view, demands responsible action from both consuming and producing nations”
I would also like to quote Chris Nelder from an interview last month:
I would emphasize that the way forward is an electrical infrastructure. There are still a lot of missing features. For plug-in hybrids, we need charging stations. For trains, we need the depots, the tracks, and ways to get people back and forth. There are a whole lot of different pieces to the puzzle that need to be put into place, and all of it requires a lot of capital. People need to stop thinking of the dead-end direction of liquid fuels and think about electric. And what about food? What about water? What about shelter? Say we don’t get everything done on time, we don’t get a robust transportation infrastructure, now what do we do about LA? San Francisco? Houston? We can’t support these populations without a lot of continually cheap energy. So I think we’ll have the urban migration in reverse. A lot of people will move back to the heartland where they can grow their food and be near it. I think there will be a revolution in agriculture."
In reality what will happen is that our society will continue to try and preserve the status quo which could prove to be ruinous to America.


]]> http://seekingalpha.com/article/93532-is-the-bull-run-in-commodities-over?source=feed#comment-244475 244475 Wed, 03 Sep 2008 10:44:02 -0400
Yank]]> http://seekingalpha.com/article/93532-is-the-bull-run-in-commodities-over?source=feed#comment-244404 244404 , you can see nothing but increasing demand ratcheting commodity prices ever-higher. The "mean" that commodity prices fluctuate about is being pulled upward by rocketing population growth. The green revolution and development of antibiotics has created a situation where demand is soaring, at rates far beyond our capabilities to increase supplies to match.]]> Wed, 03 Sep 2008 09:45:06 -0400
But what about the demand side of the equation? Sure, it's a bit depressed at the moment, but if you look at the global population growth <upload.wikimedia.org/w...>, you can see nothing but increasing demand ratcheting commodity prices ever-higher.

The "mean" that commodity prices fluctuate about is being pulled upward by rocketing population growth. The green revolution and development of antibiotics has created a situation where demand is soaring, at rates far beyond our capabilities to increase supplies to match.]]> http://seekingalpha.com/article/93532-is-the-bull-run-in-commodities-over?source=feed#comment-244255 244255 Wed, 03 Sep 2008 01:25:50 -0400 http://seekingalpha.com/article/93532-is-the-bull-run-in-commodities-over?source=feed#comment-244230 244230 Tue, 02 Sep 2008 23:36:42 -0400 http://seekingalpha.com/article/93532-is-the-bull-run-in-commodities-over?source=feed#comment-244219 244219 Tue, 02 Sep 2008 23:14:38 -0400
Without a major growth in oil outputs, Oil down and DOW up is beyond any logics.]]> http://seekingalpha.com/article/93532-is-the-bull-run-in-commodities-over?source=feed#comment-244193 244193 Tue, 02 Sep 2008 21:37:14 -0400 Comparing oil, food, metals, and other commodities to things like comic books, beanie babies, tulip mania, the south sea shipping co., etc is fundamentally wrong. Last time I checked, a beanie baby and comic books were not essential to our economy and life. Nice try.]]> http://seekingalpha.com/article/93532-is-the-bull-run-in-commodities-over?source=feed#comment-244134 244134 Tue, 02 Sep 2008 20:02:06 -0400 http://seekingalpha.com/article/93532-is-the-bull-run-in-commodities-over?source=feed#comment-244132 244132 Tue, 02 Sep 2008 20:01:47 -0400 http://seekingalpha.com/article/93532-is-the-bull-run-in-commodities-over?source=feed#comment-244123 244123 Tue, 02 Sep 2008 19:37:37 -0400 http://seekingalpha.com/article/93532-is-the-bull-run-in-commodities-over?source=feed#comment-244085 244085 Tue, 02 Sep 2008 17:41:17 -0400
commody stocks having "solid revenues and earnings" has utterly nothing to do with price bubbles in the underlying commodity. at today's levels, about 20% off the may peak, oil is still nearly double the price of last year while XOM is down almost 10%. if the market believed peak oil prices were sustainable, XOM would not be down 10% and selling at under10x trailing earnings....it is selling at 10x trailing earnings precisely because the market believes those are peak earnings, not sustainable in a softening world economy.

oil is just one example of commodity stocks that have historically sold at modest p/e's because they're cyclical businesses. such businesses do not and should not command premium multiples. neither will they strongly correlate with the underlying price of the commodity, which is extremely volatile.

the bubble in technology is not remotely comparable to the bubble in world oil prices. oil has known supply/demand characteristics. high prices create demand destruction, which we're now seeing...china and india notwithstanding. oil prices will always revert to an equilibrium price based on supply/demand fundamentals. but that doesn't mean that bubbles can't periodically surface any more than it means that price can't periodically collapse. both have happened in the past and both will happen in the future. we've seen a quadrupling of oil prices in the last 4 years or so, which is historically unusual (i.e. a bubble) but not unprecedented. those who believe that the days of $40 oil "are gone forever" are simply ignorant of both markets and history. that includes general motors, goldman sachs, boone pickens, and others with short memories.

epeon's comment that commodity prices are "still historically high" despite a slowing world economy speaks for itself. look for further declines if the world economy continues to weaken.




]]> http://seekingalpha.com/article/93532-is-the-bull-run-in-commodities-over?source=feed#comment-244035 244035 Tue, 02 Sep 2008 15:56:07 -0400 http://seekingalpha.com/article/93532-is-the-bull-run-in-commodities-over?source=feed#comment-243940 243940 Tue, 02 Sep 2008 13:23:23 -0400
A bubble is like the high-tech bubble where companies have pe ratios greater then 30 or, in many cases, no earnings at all. So, is a correction in commidity companies possible. Sure, but it will only be a correction.]]> http://seekingalpha.com/article/93532-is-the-bull-run-in-commodities-over?source=feed#comment-243899 243899 Tue, 02 Sep 2008 12:20:57 -0400 I expected oil to drop a lot more faster, but today with -7% or so it confirmed my theory.
Still I don't see stock market to perform after this is over. It's more like a confirmation of global recessionary impact.]]> http://seekingalpha.com/article/93532-is-the-bull-run-in-commodities-over?source=feed#comment-243790 243790 Tue, 02 Sep 2008 09:51:26 -0400
yes, that's called a speculative bubble, as i've posted many times before. throughout 2008 oil has not traded as a commody...it has traded as a financial derivative. that trade is over, killed by a softening world economy. as for china and india, hello??? a softening world economy affects them too.

notice that deafening silence from all the morons who claimed that speculation wasn't a factor in oil prices. ]]> http://seekingalpha.com/article/93532-is-the-bull-run-in-commodities-over?source=feed#comment-243768 243768 Tue, 02 Sep 2008 09:19:21 -0400 http://seekingalpha.com/article/93532-is-the-bull-run-in-commodities-over?source=feed#comment-243764 243764 Tue, 02 Sep 2008 09:13:44 -0400 http://seekingalpha.com/article/93532-is-the-bull-run-in-commodities-over?source=feed#comment-243758 243758 Tue, 02 Sep 2008 09:08:39 -0400 http://seekingalpha.com/article/88526-everyone-wants-the-commodity-bubble-to-be-pricked?source=feed#comment-221356 221356 Sun, 03 Aug 2008 05:05:50 -0400
]]> http://seekingalpha.com/article/88526-everyone-wants-the-commodity-bubble-to-be-pricked?source=feed#comment-220894 220894 Sat, 02 Aug 2008 09:11:35 -0400
It's not that only those countries who are buying the commodities are feeling the heat.

Take the case of Russia and Saudi Arabia- Oil rich and flushed with money. A jump in crude Oil has ensured a steady climb in the amount of money supply in the commodity based economy leading to an ever more sharp jump in inflation numbers which is ruling way above the double digit. It's not that they are not worried.

Coming to demand side of the commodities. I accept that I havent much emphasised upon the agri/soft commodities much. The reason being, the two fastest growing economies i.e, China and India are still technicallly self sufficient when it comes to food grains and essential items. A good monsoon ensures the steady supply of agri products on annual basis in the Indian subcontinent, which in itself is home to a large proportion of human population.

In recent times, In India due to outsourcing euphoria, IT, ITES and Financial services industry had enabled a large section of population to spend. Mr. George Bush/Ms. Rice had exactly this particular section in mind when they pronounced their now famous comment regarding India and China.

Commodities like Crude Oil, Zinc and Lead are fluctuating as much as 8-10% in a single day which is pretty abnormal since demand and supply fundamentals dont change in a single day. Earlier, even if Crude Oil made a sharp jump, as in the case when Katrina happened, it retreated later when things normalised.

I still feel that the entire world is betting too much upon the China and India factor. Credit consumption is yet to take off. Six months of moderation and we will stop buying homes, cars, motorbikes. Jobs are being lost, wages have frozen. Though I am still optimistic about these economies, I feel that the world need to be patient.]]> http://seekingalpha.com/article/88526-everyone-wants-the-commodity-bubble-to-be-pricked?source=feed#comment-220686 220686 Fri, 01 Aug 2008 18:19:54 -0400 http://seekingalpha.com/article/88526-everyone-wants-the-commodity-bubble-to-be-pricked?source=feed#comment-220515 220515 Fri, 01 Aug 2008 15:14:05 -0400 seekingalpha.com/artic...), I point out that people need to eat, and gold and copper cannot be eaten. Population is growing, and that's a fact, while arable land remains basically the same. Moreover, climate changes affect agricultural commodities and such a way that the increase in production simply cannot meet additional demand.]]> http://seekingalpha.com/article/88526-everyone-wants-the-commodity-bubble-to-be-pricked?source=feed#comment-220506 220506 Fri, 01 Aug 2008 15:10:37 -0400 ]]> http://seekingalpha.com/article/88526-everyone-wants-the-commodity-bubble-to-be-pricked?source=feed#comment-220411 220411 Fri, 01 Aug 2008 13:32:53 -0400 http://seekingalpha.com/article/88526-everyone-wants-the-commodity-bubble-to-be-pricked?source=feed#comment-220231 220231 Fri, 01 Aug 2008 11:27:46 -0400 People need to live somewhere..but they don't need to "buy" where they live. In fact..I'd argue they didn't buy anything..they rented a pretend life for a year or two.
Food..metals..oil/gas are the stuff of life..and billions..not millions..more people need them than ever before. If anyone thinks these critical denominators are coming down more than marginally anytime soon they must either be living in an alternate universe...or they believe a truly devastating depression is near. At least that would be a point of view..you offer NO point of view..NO investable ideas..NO NOTHING!]]> http://seekingalpha.com/article/88526-everyone-wants-the-commodity-bubble-to-be-pricked?source=feed#comment-668359 668359 Fri, 01 Aug 2008 07:48:16 -0400 seldom ever mentioned,
is the population "bubble".
More and more people on earth chasing fewer and fewer resources.

If all the people who believe that prices will go down
would simply kill themselves right now,
then prices would go down.
But that's the only way ...]]> http://seekingalpha.com/article/83813-suv-makers-feel-the-heat-of-higher-oil-prices?source=feed#comment-199572 199572 Mon, 07 Jul 2008 04:40:32 -0400
I also take issue with the comment that the EV1 was a piece of junk. The EV1 I drove in 2000 was a wonderful vehicle that I would like to be driving now. The only thing bad about the EV1 was in 1997 when GM used Delco batteries. Those Delco batteries were a piece of junk in the application they were being used.]]>