PurpleNeonLights

3 Comments

    • The Global Agricultural Boom: No Bubbles Here [view article]
      My take is that there are more and more people competing for commmodities (especially food). It is ever-harder for production to keep up with demand. There is no answer in sight, at least for many years.

      Thus, I have bought many LEAPS options on DBA and DBC.

      My recipe:

      Buy many 2009 and 2010 calls on DBC (commodities) and half again as many on DBA (agricultural products). (I realize that DBA and DBC overlap to a significant extent.)

      After buying DBA/DBC, stick in the "oven" and wait out the big swings.

      Roll over to farther strike dates as needed.

      Lower return-on-investment expectations if the US government decides to strengthen the dollar.

      Do not freak out if there are big sell-offs by big funds selling off their DBA/DBC holdings (or related commodity holdings) because they need to raise cash in a hurry to cover margin calls or whatever (as occurred a few weeks ago). Instead, buy more DBA/DBC on the dips.

      If there is a big sharp spike upward in DBA and/or DBC (subjective assessment, to a considerable extent), sell off some of the options, and move them over into good, low-correlation-to-com... trades, or just stay in cash. Re-deploy the money back into DBA and DBC when the spike subsides.

      That's my "recipe" (e.g. strategy).


      ********************

      Added thoughts:

      If the US gets its act together and starts throwing in its lot with nuclear energy in a big way, this could affect the scenario -- but not for several years. (My understanding is that the quickest the US can get a nuclear energy plant up and running is within four years, by buying them from France, who, using our technology, now cranks out about 80-90% of their energy needs from nuclear. Huge political forces make that best case scenario essentially impossible. Massive ignorance about the risks of nuclear energy is horr hobbling the US.

      *************

      There has recently been a huge oil find in the ocean off BRazil. However, I don't see that "messing" with the cost of oil in any significant way any tiem soon -- it will maybe just slow down the upward march in prices over a many-year time frame. No way will it affect the more "near-in" prices fundamentally, though there could conceivably be some knee-jerk "herd" downward price movements, not lasting long.

      As long as nuclear continues to not be understood to be the only viable long-term answer to the huge baseload 24/7/365 needs of the planet (especially the US), agricultural products will continue to be cannibalized for energy needs (corn and sugar, for ethanol, for example). This will definitely put the continued 'hurt' on food supplies.       Apr 20 06:55 AM
    • Commodities: Lots of Upside Remains [view article]
      Population Increasing, population becomng more affluent, commodites harder to get...that's all I need to know. That's why I've loaded up on LEAPS Jan 2009 and 2010 options on DBC and to a lesser extent DBA. Apr 02 03:13 PM
    • Global 'Oil Shock' Rattles World Stock Markets [view article]
      Quote from earlier poster

      "Unfortunately not only does it take at least 10 years to get a nuclear plant built, but infrastructurally speaking, it is impossible to produce that many nuclear plants quickly."

      If it takes 10 years, so be it. 10 years will be here before we know it. We are something along the lines of 5 years or so into the Iraq war, halfway to ten. Ten years is nothing.

      The real impediment, to me,is the ignorance infrastructure. Alas, blasting through that may be much harder. Also, the entrenched establishment infrastructure is tough. People want to protect their existing jobs and long-held cherished points of view.       Mar 19 11:20 AM
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