Big Oil and Big Tech Offer Different Opportunities for Investors

“There are two great times to make money in stock markets,” according to a recent article in The Wall Street Journal: “the post-crash rebound and the end-of-cycle excess. Oil and technology fit the pattern perfectly in the past two years.” But the sectors offer different opportunities for investors. Since January 2016, when oil prices hit a low, both the global oil and tech sectors have returned more than 80% (including dividends), “beating the wider market’s 53%… Read More

5 Commodity Picks for an Inflationary Environment

Along with its recent rate increase, the Fed has upgraded its growth and inflation forecasts—and this could bode well for commodity stocks, writes Validea CEO John Reese in in his article this week for Nasdaq. Reese cites a tighter labor market, stabilizing oil prices and slowing appreciation of the U.S. dollar as potential contributors to inflation, and cites AAII Journal data pointing to a strong outlook for commodity stocks: He identifies five commodity stocks worth… Read More

PIMCO: The Case for Commodities

The commodities boom that occurred in the late 90s and much of the 2000s may be over, but PIMCO thinks that commodities are still a very worthwhile investment going forward. “While we agree that future price appreciation won’t likely mirror the commodity ‘supercycle’ of double-digit annual growth from the late 1990s until the 2008 financial crisis, we do not believe this should necessarily imply a negative view on commodity returns,” PIMCO’s Nicholas Johnson and Greg… Read More

Grantham Likes Commodities

Commodity prices are headed higher over the long term, Jeremy Grantham says, and investors would be wise to make sure they are exposed to them — though not through futures contracts. “Risks abound, as always, in commodity investing. Despite them, Grantham advises, you should start getting in, ‘but keep a lot of dry powder,’” reports Forbes’ William Baldwin. “If there’s a crash, double up. If there’s no crash, add gradually to your positions over the… Read More

Sonders on What the Commodities Tumble Means for Stocks

In her latest market commentary, Charles Schwab Chief Investment Strategist Liz Ann Sonders looks at the recent commodities decline, and at what it might mean for stocks. While stocks and commodities don’t always move in tandem, Sonders says, their correlation has been high since late 2008, when the “risk-off, risk-on” trade started. “It’s been our view that this elevated correlation was not to be long-lasting, and … the correlation has begun to ebb,” Sonders says.… Read More

Grantham: World in Midst of Huge Commodities “Paradigm Shift”

GMO’s Jeremy Grantham says that the world is in the midst of a “paradigm shift”, one that involves a skyrocketing population and dwindling resources. And, if we don’t act soon, the shift will leave us in serious trouble. “Accelerated demand from developing countries, especially China, has caused an unprecedented shift in the price structure of resources: after 100 hundred years or more of price declines, they are now rising, and in the last 8 years… Read More