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Commodity Bubble, or Just a Temporary Correction?

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August 12, 2008 – Comments (3)

Being a believer in Jim Rogers, I'm more of the belief that the commodity market still has plenty of growth left, or as he put it, if this is a nine inning ball game, we're still in the 4th inning, maybe 4th and a half.

I don't think the "bubble" has popped and that we're just in the middle of a temporary correction, but I was curious about the other Fool's thoughts on the subject.

Personally, I just don't see supply being able to keep up with demand for the foreseeable future.

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3 Comments – Post Your Own

#1) On August 12, 2008 at 6:07 PM, abitare (38.38) wrote:

I like Jim Rogers, but you have to remember the Commodity market run up started in 2000-1. A seven year run up, but we have overproduction in housing, real estate, cars etc....

Take a look at these charts, also take a watch of Marc Faber's video I posted yesterday, which I think you will like if you like JR and commodities. 

1.
Commodity Index Investment vs. Spot Prices

http://bp0.blogger.com/_nSTO-vZpSgc/SDwwpsrA_WI/AAAAAAAACok/KXFdcp3C00k/s1600-h/Commodity-Index-Investment-1.png 

2. Commodity Index Purchases Last 5 Years
http://bp3.blogger.com/_nSTO-vZpSgc/SDwxdcrA_XI/AAAAAAAACos/o-hN0udv-7Q/s1600-h/Commodity-Index-Investment-2.png

3. Commodity Futures Market Size

 

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#2) On August 12, 2008 at 10:50 PM, russiangambit (29.27) wrote:

I still beleive in commodities. However, what I beleive is not important. What is important is what the professional money is going to do , you cannot fight professional money, you'll be swept away.

And right now they are selling commodities. Wait for a signal that commodities are getting back, like may be a 2-3% gain with a follow through, then you can get back in.

I am in the same boat, it is hard to wait. There should be a short term bounce in them, may be in a month or so. One clue will be , - when people stop rooting for commodities, it mean its time to get back in.

We are getting close on energy stocks, I think another 10% down and we are done.

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#3) On August 13, 2008 at 12:27 PM, Collin757 (< 20) wrote:

i hear ya russian, are you russian?

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