https://risksandreturns.com/category/commodities/ In search of asymmetric trading opportunities… en-US https://risksandreturns.com/2017/04/24/shorting-palladium-again/ https://risksandreturns.com/2017/04/24/shorting-palladium-again/ Mon, 24 Apr 2017 14:08:48 +0000 It’s not often that one gets an opportunity to execute the exact same trade based on the same investment thesis after closing out the initial trade profitably. But that is exactly what I am facing and decided to take advantage of by shorting Palladium last Friday at $802. https://risksandreturns.com/2015/03/30/shorting-palladium/ https://risksandreturns.com/2015/03/30/shorting-palladium/ Mon, 30 Mar 2015 14:57:37 +0000 A lot of my financial wealth was created riding the great commodity super cycle during the previous decade. In 2004, when I first had enough money to invest, it was apparent to me that the industrialization of China, the underinvestment in mining, and easy US monetary policy would create an ideal setting for commodities to rally. To speculate on this, I bought a basket of Junior gold exploration companies and watched their value multiply several-fold. https://risksandreturns.com/2008/10/26/copper-prices-return-to-earth/ https://risksandreturns.com/2008/10/26/copper-prices-return-to-earth/ Sun, 26 Oct 2008 13:22:24 +0000 Base metals prices have collapsed this year with losses particularly steep in just the past few weeks. For the last two years, I have been writing bearish posts on base metals with the viewpoint that when the global economy slumps, demand for industrial metals will decline significantly, and prices will fall. I even put my money where my mouth is and shorted base metals stocks last year. Now that prices of industrial metals have substantially declined, it is worthwhile to examine whether they have fallen too much. Here is a price chart of copper dating back to 1980. https://risksandreturns.com/2008/01/11/investing-in-water-rights/ https://risksandreturns.com/2008/01/11/investing-in-water-rights/ Fri, 11 Jan 2008 13:39:50 +0000 I believe I have come across an attractive investment opportunity: owning water rights in the US Southwest. Rather than actually buying water rights, it is far easier to buy shares of a publicly traded company that is involved in this space. There is only one which I am aware of and I will discuss it in my next post. But in this post, I will explain why water rights in the Southwest is likely to become much more valuable. https://risksandreturns.com/2007/06/03/copper-still-looks-vulnerable/ https://risksandreturns.com/2007/06/03/copper-still-looks-vulnerable/ Sun, 03 Jun 2007 13:42:39 +0000 At the end of last year I expressed my nervousness about the copper markets and how the price at that time of $3/lb. was incredibly expensive. Since then copper fell to a low of $2.40 before rebounding to $3.75. Currently, it’s selling for $3.34 and I am more bearish on copper now than I was before. https://risksandreturns.com/2007/03/29/uranium-frenzy/ https://risksandreturns.com/2007/03/29/uranium-frenzy/ Thu, 29 Mar 2007 13:48:44 +0000 https://risksandreturns.com/2007/03/27/ethanol-demand-driving-up-food-prices/ https://risksandreturns.com/2007/03/27/ethanol-demand-driving-up-food-prices/ Tue, 27 Mar 2007 17:09:22 +0000 Earlier this year President Bush called for America to cut its petroleum consumption by 20% over the next decade, largely by using more ethanol which creates less pollution and can be produced using home-grown corn. Already there are numerous subsidies for biofuel producers which have allowed them to significantly increase ethanol production. https://risksandreturns.com/2007/03/06/technology-improvements-increase-oil-supplies/ https://risksandreturns.com/2007/03/06/technology-improvements-increase-oil-supplies/ Tue, 06 Mar 2007 17:11:51 +0000 The NY Times highlights the recent improvements in oil recovery methods that have helped old fields to become an important source of new oil supply. I don’t believe we are running out of oil any time soon because there are abundant reserves of heavy oil in the world, and improved technology — along with a high oil price — will help us to extract it. https://risksandreturns.com/2006/12/21/copper-prices-set-to-fall/ https://risksandreturns.com/2006/12/21/copper-prices-set-to-fall/ Thu, 21 Dec 2006 12:27:39 +0000 I have been nervous about base metal prices, particularly copper, for some time now. Low interest rates worldwide have allowed many hedge funds to engage in the carry trade by borrowing capital in places like Japan and investing it in everything from real estate to emerging market stocks. Earlier this year commodities became the target for their speculative buying.