Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Old 04-28-2006, 02:40 PM   #1
Thinks s/he gets paid by the post
Join Date: Apr 2006
Posts: 1,487

Bill Miller, Legg Mason Value:

"The time to own commodities is (or at least has been) when they are down, when everybody has lost money in them, and when they trade below the cost of production. That time is not now. The data showing the returns of commodities will look very different if you start measuring just after prices have tripled."


d is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: commodities?
Old 04-28-2006, 04:15 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jul 2003
Location: Kansas City
Posts: 7,324
Re: commodities?

I agree with Miller in the following sense:

If you are attempting to capture expected returns to improve overall portfolio performance then you have possibly lost some of the gain after the recent runup.

However - slice and dice wise - if you are trying to damp SD and take advantage of correlation - then

Norwegian widow: if the divs/current yield are acceptable from the get go - true grit allows one to hold thru cycles and take the return. aka if you could buy PCRIX or similar ilk and live with/or without rebalancing - taking only current yield to fund your ER then you are home free - right?

HEH HEH HEH HEH - just a little here - don't really have a strong opinion.

unclemick is offline   Reply With Quote
Re: commodities?
Old 04-29-2006, 04:03 AM   #3
Thinks s/he gets paid by the post
Join Date: Jul 2005
Posts: 4,931
Re: commodities?

i view my commodity holdings (5%) as my rebate commodities have sky rocketed at least i make some back as energy prices go thru the roof....i hope i loose money in that area ,kind of like paying insurance because if the commodities stop rising the 95% rest of my portfolio should do well...... so far i made enough in profits in the commodity section to pay the extra difference in my gas for the next 3 years figuring 4 bucks a gallon......
mathjak107 is offline   Reply With Quote
Re: commodities?
Old 04-30-2006, 05:24 PM   #4
Dryer sheet aficionado
Join Date: Apr 2006
Posts: 32
Re: commodities?

Commodity booms run in cycles, usually at least 20 year cycles. Prices typically become low enough that it's barely economic to produce the commodity, which depresses production. When production dwindles to the point that demand overcomes supply, prices start rising again, until new production is economically viable and ultimately very profitable. Many commodities have several years lag time till they are operating at a capacity adequate to meet demand, so the "boom" period of price appreciation extends for years, until over-supply starts the downward cycle again. Bottom line: the commodity boom has many more years to go, particularly as long as China, India, and other developing countries need energy, and natural resources.
Focu$ed is offline   Reply With Quote
Re: commodities?
Old 04-30-2006, 10:39 PM   #5
Full time employment: Posting here.
Join Date: Dec 2004
Posts: 714
Re: commodities?

I agree with both mathjak107 and Focu$ed. Small percentage of portfolio, it is insurance, and like everything else ... they cycle. It's another asset class, IMHO. It is also a class that many investors like to scorn, for some reason, so expect odd looks if you mention you own some precious metals or oil, or ...

Having said all this ... obviously there has been quite a runup. I also think we have further to go. Just realize when we enter at this point on the curve, the risks are a bit higher.

Wish we could find a depressed asset class, other than cash ...
Craig is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
Are commodities investments a net zero game? soupcxan FIRE and Money 18 03-18-2007 08:12 AM
VG - Commodities Fund? veritasophia FIRE and Money 8 04-30-2006 07:43 AM
How to invest in commodities? Spanky FIRE and Money 16 03-06-2005 09:13 AM
Investments in Commodities Dawg52 FIRE and Money 3 02-09-2005 08:27 AM
Any commodities investors? GTM FIRE and Money 15 01-10-2005 06:33 AM


All times are GMT -6. The time now is 09:30 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.