Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Commodity Prices and Fund Failures
Old 09-03-2008, 04:58 PM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
Commodity Prices and Fund Failures

It looks like the drop in commodity prices is causing some problems for a hedge fund.

Is a small bubble popping or just deflating a bit.

Big commodities hedge fund shuts down - Daily Briefing


Are there more problems to follow?
__________________

__________________
chinaco 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 Early-Retirement.org 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!

Old 09-03-2008, 05:20 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,527
Interesting, especially this:

"But Philip Gotthelf of New Jersey trading firm Equidex says the commodities selloff could just be beginning, given how many investors rushed headlong into the sector during the past year or two. He tells Bloomberg television the price of crude oil could be on its way to $50 a barrel from a recent $108."

Where was he 3 months ago to tell us about this impinging drop to $50 per barrel? It would have been nice about $40 per barrel ago! Darn those analysts.
__________________

__________________
FUEGO is offline   Reply With Quote
Old 09-03-2008, 09:20 PM   #3
Thinks s/he gets paid by the post
 
Join Date: May 2008
Posts: 3,422
Not going to shed one tear for those who made money on the run up of oil and other commodities prices.

They made money while the high prices sapped the economy for everyone else.
__________________
explanade is offline   Reply With Quote
Old 09-03-2008, 09:39 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Oil, gold and other commodities still have a way to go. Six more months of gut wrenching drops.

Really unfortunate for the folks who just piled into commodity funds thinking they were as safe as CD's, only with better returns.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Old 09-03-2008, 11:38 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Quote:
Originally Posted by chinaco View Post
Are there more problems to follow?
For the folks who invested in commodity funds..... we can only hope so!
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 09-04-2008, 03:08 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
Diversification! Most of the model portfolios (for small investors) that I studied that had some allocation to commodities in some way (through some sort of fund) only allocated 5%-10%.

If people stuck with that approach, they should not be hurt too much. But people who gambled big... are going to feel it.
__________________
chinaco is offline   Reply With Quote
Old 09-04-2008, 05:23 AM   #7
Thinks s/he gets paid by the post
teejayevans's Avatar
 
Join Date: Sep 2006
Posts: 1,221
Quote:
Originally Posted by explanade View Post
Not going to shed one tear for those who made money on the run up of oil and other commodities prices.

They made money while the high prices sapped the economy for everyone else.
The government needs to step and help them, like bear sterns, like the
homeowners with bad loans, like fannies!!
TJ
__________________
teejayevans is offline   Reply With Quote
Old 09-04-2008, 08:00 AM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
HFWR's Avatar
 
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 12,964
In my portfolio, only bonds and small-caps are up ytd, with PCRIX just barely negative. Everything else is dramatically lower...

So diversification works; some things are less worse than others.
__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline   Reply With Quote
Old 09-04-2008, 09:40 AM   #9
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by HFWR View Post
In my portfolio, only bonds and small-caps are up ytd, with PCRIX just barely negative. Everything else is dramatically lower...

So diversification works; some things are less worse than others.
Your small caps are up? Are these individual stocks, ETFs or mutual funds?

Right now, nothing works except cash. That is a major difference between this bear market and the one in 2000-2002. In the previous bear market, several asset classes still did very well even as domestic large caps tanked. And I think that's why this one feels worse to asset allocators even though in terms of U.S. large cap it's not nearly as bad as the previous bear.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 09-04-2008, 09:48 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
HFWR's Avatar
 
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 12,964
I have an institutional small-cap fund in my 401k, based on the Russell 2000. It's actually down 6.5%, though rebalancing had me slightly positive until today...
__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline   Reply With Quote
Old 09-04-2008, 10:19 AM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,527
My small caps (Vanguard tax managed small cap) are up about 10% last I checked. I did, however, rebalance in to them at a very opportune time. But that's the beauty of rebalancing - I picked an asset class that had dropped to a low and that I needed to bring back up a few percent.

(edited to add - small caps I rebalanced into are up more like 8.5% as of 9/3/08 close of business)
__________________
FUEGO is offline   Reply With Quote
Old 09-04-2008, 03:05 PM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,385
Quote:
Originally Posted by FUEGO View Post
My small caps (Vanguard tax managed small cap) are up about 10% last I checked. I did, however, rebalance in to them at a very opportune time. But that's the beauty of rebalancing - I picked an asset class that had dropped to a low and that I needed to bring back up a few percent.
Did you mean to say, "That is the beauty of market timing?" Is not that what rebalancing at a very opportune time is?

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 09-04-2008, 03:31 PM   #13
Recycles dryer sheets
Culture's Avatar
 
Join Date: Apr 2007
Posts: 491
I have actually stayed slightly positive. OTOH, that is only because I keep dumping new cash into my account .

I also moved 5% of my portfolio last week from bonds to equities, and plan to move 15% more over the next three months (5% a month), with the plan to go from 50-50 to 70-30 right before the elections. While my rational mind tells me this will pay off in the long run, the irrational part of me is on edge.
__________________
Culture is offline   Reply With Quote
Old 09-04-2008, 03:35 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,527
Quote:
Originally Posted by haha View Post
Did you mean to say, "That is the beauty of market timing?" Is not that what rebalancing at a very opportune time is?
Nah, it is called rebalancing when I do it. I don't care what you call it when you do it! The time proved to be opportune only in hindsight, by the way.

I also "rebalanced" into international investments. That hasn't turned out so well. But it is about time to rebalance some more into international pretty soon.

Edited to add: I did "market time" into a financials ETF within a day of the low point. I will call that market timing since it does not fit into my asset allocation policy. Maybe 20% market timing and 80% dumb luck...
__________________
FUEGO is offline   Reply With Quote
Old 09-04-2008, 04:21 PM   #15
Recycles dryer sheets
Gardnr's Avatar
 
Join Date: Jul 2008
Location: ENE MO - near STL
Posts: 424
Quote:
Originally Posted by chinaco View Post
Diversification! Most of the model portfolios (for small investors) that I studied that had some allocation to commodities in some way (through some sort of fund) only allocated 5%-10%.

If people stuck with that approach, they should not be hurt too much. But people who gambled big... are going to feel it.
Quite true, but even that's a bit of a problem when that allocation is added at the top, as is surely the case for most. How many really had commodities as an asset class in their portfolio before the recent extreme run up?

Of course they're still much better off than those who run with all their eggs to the latest hot thing!
__________________
Gardnr is offline   Reply With Quote
Old 09-04-2008, 04:24 PM   #16
Recycles dryer sheets
Gardnr's Avatar
 
Join Date: Jul 2008
Location: ENE MO - near STL
Posts: 424
Quote:
Originally Posted by Culture View Post
I have actually stayed slightly positive. OTOH, that is only because I keep dumping new cash into my account .
Hey that works! Just ask the Beardstown Ladies
__________________
Gardnr is offline   Reply With Quote
Old 09-04-2008, 05:39 PM   #17
Recycles dryer sheets
 
Join Date: Feb 2008
Posts: 147
I've had a relatively big position in commodities funds (10-20% of portfolio depending on how you slice them), mostly accumulated starting 2003-2005. Probably could have sold some this year, but I'm an adamant buy-and-holder, plus don't need to be paying any extra taxes now while I'm still w*rking. I don't know much about the current speculation/bubble, but my long-term view FWIW is that commodities can only go up. Given the US public debt situation, plus growth across the globe, I see inflation+scarcity as facts of future life.
__________________
headingout is offline   Reply With Quote
Old 09-04-2008, 06:26 PM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
HFWR's Avatar
 
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 12,964
Ah, but the market can stay irrational longer than we can stay solvent. Or something like that..
__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline   Reply With Quote
Old 09-04-2008, 07:25 PM   #19
Full time employment: Posting here.
tightasadrum's Avatar
 
Join Date: Aug 2006
Location: athens
Posts: 802
With somewhere around 10% in PCRIX, I'm holding on for the diversification. I'm still heavily into cash (35%?) and still looking for a bottom. It may be timing at it's worst, but it helps me sleep at night.
__________________
Can't you see yourself in the nursing home saying, " Darn! Wish I'd spent more time at the office instead of wasting time with family and friends."
tightasadrum is offline   Reply With Quote
Old 09-04-2008, 08:03 PM   #20
Thinks s/he gets paid by the post
 
Join Date: May 2008
Posts: 3,422
Yeah I just came into a bunch of cash and I'm not thinking this is the time to put it into the market.

Not even into something like Wellesley Admiral. I notice 23% of its holdings are in financials, which are still leading the market down to triple-digit declines.
__________________

__________________
explanade is offline   Reply With Quote
Reply


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
Mortage failures and mis-use (fraud) of credit A854321 FIRE and Money 16 12-19-2007 09:26 AM
Canadian oil & gas trusts vs commodity fund kevink FIRE and Money 9 05-01-2006 07:32 PM
Part 2 - PIMCO Commodity RR Fund wildcat FIRE and Money 9 03-14-2006 11:03 AM
New Commodity Fund JPatrick FIRE and Money 5 02-04-2006 07:02 PM
Commodity Fund Vs Energy Fund Spanky FIRE and Money 7 05-26-2005 06:38 AM

 

 
All times are GMT -6. The time now is 02:46 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.