phillips49

Commodities: Bubble or Not?

OPEC is working very hard to produce only what is necessary to meet demand. They can keep oil prices at current levels for the foreseeable future. Some nations, including the USA have already reached peak oil production and output is in decline.
The dot com bubble was based on speculation over assets and demand that existed only in the minds of the participants. The real estate bubble was based on demand for tangable but optional assets, that are worth only what someone else was willing to pay for them.
Natural resources are very real needs, the demand is very real, and the supply is limited and controlled. It is not in the suppliers best interest to flood the market with product.
There may be some froth due to speculation, but bubble, I think not.
I like investments with solid demand for products that people NEED, where there is limited supply that provides some pricing power, with limited competition and high prospects for continued growth. For me, oil, natural gas, oil field services, pipelines and distribution, metals, mining, mining equipment, seed, fertilzer, weed and pest control all satisfy these criteria and in my opinion are the investments to be in for the long haul because a growing world needs these things.