In bull markets... corrections are bound to happen anyway... its not
unpredicted.. many already know this.. Commodities still in the need for years
to come.. people of the world need Comms to survive..a True investor never say
quits.. they ride the wave.. a few years downturn acceptable, mitigated by the
more better years ahead.. as we always say :)
--- Pada Rab, 13/8/08, golden.health <[EMAIL PROTECTED]> menulis:
Dari: golden.health <[EMAIL PROTECTED]>
Topik: [obrolan-bandar] IS THE COMMODITIES BULL MARKET OVER?
Kepada: obrolan-bandar@yahoogroups.com
Tanggal: Rabu, 13 Agustus, 2008, 10:05 PM
Is the Commodities Bull Market Over?
by: Arie Goren posted on: August 12, 2008 | about stocks: DBC / DGL / GDX / GLD
/ GSG / IAU / OIL / RJA / USO / XLE
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The dramatic price decline of most commodities over the last five weeks brought
some analysts to call for the end of the bull market in commodities; their
conclusion is that commodities have reached a turning point and a bigger price
decline awaits us. Are they right? Let's see how commodities have done this
year.
In the table below, the main commodities are arranged by group and last price;
the price at the end of 2007 and the maximum price of each commodity in the
year 2008 are also given. In addition, the price change from 2008 maximum value
and the price change from the beginning of the year are calculated.
click to enlarge images
>From the table above, we can see that after a very sharp rise this year, which
>caused strong protest all over the world, most commodities have, on average,
>almost returned to their price at the beginning of the year.
Price change of main commodities from the beginning of the year
Price decline of main commodities from their maximum value in the year 2008
Many analysts explain the recent sharp decline in the price of commodities by
the strengthening of the dollar, because the price of commodities is
denominated in dollars. Naturally, the dollar and commodities move in opposite
directions, but that cannot explain such a big decline in the price of
commodities, since the dollar has risen only by 6.44% from its lowest value of
all time against the euro - 1.60 on July 15th 2008 - and commodities have shown
a much bigger move - a decline of 26% on average.
In our opinion, the recent fall of commodity prices is not due to a change in
the basic fundamentals of supply and demand, but rather to a shift in the
sentiment of investors. The fact that the US economy is slowing was known also
in the first half of the year; nevertheless, commodity prices rose sharply
during this period. It seems that after enjoying huge gains in the commodity
markets, fund managers and other investors have closed their positions, and
even went short after reaching the conclusion that "the party is over".
According to Jim Rogers, the famous commodities guru, commodity prices move in
cycles of about 18 years, and since the current bull market started at 2002,
he expects it to last until about 2020. Rogers explains the cyclic nature of
the commodities market by the fact that when the demand for commodities and
prices are low, no one is willing to invest in new mines, start oil
explorations or increase cultivation areas. However, when shortage is felt and
prices are moving up, that is when companies start looking to increase
production; but it takes years to begin a new exploration or develop new mines,
so that the supply shortage which is accompanied by high prices can last for a
long time. If we accept his theory, the recent decline in commodity prices
should now give us an opportunity to enter this market at the right time.
In view of the basic fundamentals of supply and demand, the market is still
very tight, inventories of agriculture products are historically low, the oil
supply has stayed almost the same, and the mine supply of precious metals from
South Africa is dropping because of a shortage in the electricity supply. All
this brings us to the conclusion that the recent decline in commodity prices is
a healthy correction to the commodity bull market that is still going on.
http://seekingalpha .com/article/ 90333-is- the-commodities- bull-market-
over?source= more_author_ recent_similar_ articles
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