Commodity stocks (coal, steel) and oil stocks rallied after Fed's capital injection, but seems to be losing momentum again. Does no one believe govt stimulus/infrastucture development /recovery of global market?
I am getting long commodity stocks for the long term for two reasons: 1. Diversify away from the dollar, profit from the expected huge inflation. 2. If recovery does occur it will then result in more demand for these resources. I believe this play can be profitable even if the economy has a slow recovery due to the inflation aspect.
I agree pathus, seems like there are two ways to win here. And if the world economy recovers AND the dollar gets crushed, wow are commodities gonna run!! It almost seems too easy, I wonder what we're missing.
I beg your pardon, Gentlemen, but at the moment I think exactly the opposite will happen. Financials will outperform energy and material stocks. To be more precise - this coming leg down in S&P will be led by commodity stocks while financials will only retreat a bit but not to the extend other companies will The main reason is that sectors tend to bottom out one by one... and another reason is that oil will fall this week as well as copper and some other materials - so be careful short term Anyway I wish you luck
Again this is a long term play. My time horizon here is 2-5 years. I am not 100% in yet; I am probably going to wait a bit and buy some more. I think the market will meander down/sideways for the next 18 months or so. The timing may be off, but I just want to have this play on and also partly because I want to diversify away from dollars.