Right on cue, I’m starting to field reader questions about commodities. In particular, are companies who sell oil, fertilizer or any other raw commodity might need to fuel their rapidly growing economy.
Making money is always the prime objective, just remember that the last time these were in play — the 2008 commodities bubble — everyone thought wrongly thought that Potash Corp could do no wrong and 22 year old novices had a coal company as the largest holding in their E*Trade account.
Since visual reminders work better than words of caution, here’s your daily dose of chartporn to remind you that such commodity feeding frenzies are better to be thought of as short to medium term trades — not buy & hold forever investments.
One of the best performing sectors in 2010 was the commodities market, so it begs to question if the commodities demand from BRIC countries is real (e.g. food inflation), if commodity based hyperinflation is U.S. Dollar related, or if it’s more of those evil speculators.