Commodities were too cheap all along

Discussion in 'Economics' started by detective, May 21, 2008.

  1. What we are seeing now in commodities, especially in oil, is a reversion to true value. Modern civilization needs commodities to survive, it doesn't need Iphones or Blackberries. It doesn't need Vista or Quad core processors. It needs oil, corn, wheat, copper, etc. There is a very high price that society is willing to pay for transportation and energy.

    Commodities are still too cheap. There is a reversion to true value going on. This process will take several years. We're maybe in the 3rd or 4th inning. This is not a bubble. A bubble is paying a higher price for something than its intrinsic value. Like tech stocks in the tech mania, like tulips in Holland, like bank stocks a year ago. People are still driving out there, demand is still very healthy at $134/barrel. That tells me the price is still too low. There are no real substitutes for oil, solar powered cars go 10 mph, ethanol is barely net positive energy wise producing it, natural gas is expensive and shrinking in supply, and electricity powered cars are weak and expensive, they will not power trucks.
  2. LT701


    and you arrive at this great wisdom after a 1200% runnup
  3. I've been a raging oil bull since it was in the 80s, read my past posts. Sorry, by your standards, not catching the exact low for entry is bad trading. I guess you are perfect and its too late to buy. That's what they said at $90, $100, $110, $120, $130....
  4. Oil is headed to $2,500/barrel within two months.
  5. LT701


    1200% above the low, is more than a little above the 'exact low'

    for a detective, you dont seem to have a lot of clues
  6. LOL. Sorry, getting in at $88 and staying long while it goes to $134 in less than 4 months is bad trading because oil was trading at $10/barrel 10 years ago and I wasn't smart enough to buy then. Thanks genius.