Panskeptic

Is Oil a Bubble? Part One

There are two predictable threads that pop up on Seeking Alpha time after time.

1) When people discuss commodity supply/demand, they always mean within the U.S. until they get reminded that there's other people out there.

2) Commodities and commodity ETFs are expected to behave like stocks, and chart overlays are produced all the time reinforcing this misconception. Stock mavens new to commodities have real trouble recognizing the differences.

And BTW, no farmer gets executive compensation like the heads of oil companies. So discussion of a windfall-profits tax for the ag sector is not in the cards. But a wpt for Big Oil does not offend my theology.

DB Agriculture Fund a Blunt Instrument

To understand this price behavior, it's good to poke around on the ag websites farmers and commodity traders use.

Looking at DBA not as a single stock but as a bunch of futures contracts, you'll find that many consider ag prices to be weather-driven for the next few months at least. This is a new story for a lot of us, but old hat for folks more who trade the individual commodities.

Those London-based individual ETFs won't be coming over here any time soon for regulatory reasons. But many US brokers now routinely buy and sell on overseas exchanges, so just ask.

The larger worldwide food thesis remains unchanged. Millions of people won't magically lose their hunger because of price movements in DBA.

PowerShares DB Agriculture ETF: 'Optimum Yield' or Undue Risk?

If Morningstar is worried, I take that as a plus. A brief stock market rally is not going to make the world less hungry. The story remains intact.

Agricultural Commodity ETF: A Longer-Term Look

Nicely done. Thanks.