keo

The Brightest Stars in the Commodities Boom, Part Two

Thanks Mark, enjoyed reading the piece. Some notes though:

- few (no?) commodities have done any good in the period 1980 - 2000, not only gold performed poorly...we could use that period to bash commodities in general.
- In 1971-1980 Pt went from $90 to 1000$, gold from $35 to 850$. Gold did much better.
- In the period 1999-2007, Pt did 318%, Au 190%, Pd 10%. We found a hedge worse than gold ;). But the PM run is not over yet, we'll see what the future has in store for us.

The Brightest Stars in the Commodities Boom, Part I

Most commodities can be substituted. If platinum and palladium become expensive as rhodium, I really expect some substitution. For instance, gold can act as a catalyst as well:

17/05/2007 - Gold glows on back of clean-air movement
www.telegraph.co.uk/mo...

January 02, 2008 -- Will Gold Replace Platinum in Catalytic Converters?
seekingalpha.com/artic...

1 APRIL 2008 - HITACHI MAXELL DEVELOPS NEW GOLD-PLATINUM CATALYST ENABLING HIGHER PERFORMANCE FUEL CELLS
www.greencarcongress.c...

That would definitely destroy some demand for platinum.

If a particular commodity gets too expensive, it gets substituted. If oil is too expensive, we use coal or natural gas. If platinum is too expensive we use palladium. Or maybe gold (as science progresses). I am invested in broad commodity indices, and have a physical stash Au,Ag,Pt,Pd. I don't put everything in gold, and don't put everything in Pd either.