Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Buzz & Banter

By

PrintPRINT

This morning Toddo mentioned the energy and metals sectors as places where long-term investors might want to do some extra homework. I wanted to throw out a couple of comments related to these areas as well, grouped under the larger raw materials banner.

Raw materials continues to be dismissed as a plausible alternative to stocks and bonds by many, many intelligent people. A cursory search on the Internet will reveal no shortage of opinions. The expectations that commodities and raw materials may outperform stocks over the long run are, in fact, ludicrous.

Also interesting is that over the past couple of years when gold dramatically outperformed equities, I noticed a tendency for widely accepted conventional beliefs to emerge that actually had very little basis in reality. These beliefs typically cite cursory statistics related to the performance of metals versus equities and bonds in inflationary times, deflationary times, and periods of stagflation, and contain small enough kernels of truth that they are accepted by most investors prima facie without further consideration.

Well, when anyone suggests that a particular investment is ludicrous I think that it merits further investigation. I also encourage you to avoid accepting conventionally held beliefs as they do not always hold up to deeper scrutiny.

Lately I've been doing some more substantial technical work on raw materials and hope to be able to share some of it with you later this year. In the meantime, let me share another Haruki Murakami quote with you that I think fits here. This one is from Norwegian Wood : "If you read what everyone else reads, you'll think what everyone else thinks."

< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE