Commodity buying orgy may collapse

turkeyneck · Mar 17, 2008

Is there anything safe to buy these days?

March 17 (Bloomberg) -- Paul Touradji, founder of the $3.5 billion hedge fund Touradji Capital Management LP, told clients a ``buying orgy'' in commodities had inflated prices and increased risks of a collapse.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aRfLSpFWkQsQ&refer=home

S2007S · Mar 17, 2008

Quote from turkeyneck:

Is there anything safe to buy these days?

March 17 (Bloomberg) -- Paul Touradji, founder of the $3.5 billion hedge fund Touradji Capital Management LP, told clients a ``buying orgy'' in commodities had inflated prices and increased risks of a collapse.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aRfLSpFWkQsQ&refer=home

"MAY COLLAPSE"

HOW ABOUT WILL COLLAPSE, this is just like every other bubble we have seen, COMMODITIES ARE IN A BUBBLE AND ARE READY TO CORRECT, this is not the time to be buying.....I see at least a 20-25% correction in commodities.

mokwit · Mar 17, 2008

Agree, look what hapened if you bought gold at $800 in the seventies as a hedge against inflation.

mokwit · Mar 17, 2008

Quote from turkeyneck:

Is there anything safe to buy these days?

There is not much you really want to be long of when the global financial system as we know it is collapsing.

flyingiguana · Mar 17, 2008

Quote from S2007S:

"MAY COLLAPSE"

HOW ABOUT WILL COLLAPSE, this is just like every other bubble we have seen, COMMODITIES ARE IN A BUBBLE AND ARE READY TO CORRECT, this is not the time to be buying.....I see at least a 20-25% correction in commodities.

won't happen with too much liquidity in the system. not to mention financial fundamentals are why commodities are at highs

this would be a good time to take some profits off the table, but things like metals and agriculture should shine for most of 2008

mokwit · Mar 17, 2008

Agree that it may yet have further to go - these things always go further and faster than you expect.

"Before starting his own firm in 2005, Touradji co-founded Catequil Asset Management LP, a $1.6 billion hedge fund that shut down in 2004 after three years. He worked at New York-based Tiger between 1996 and 2000 in the hedge fund's commodities and resources group."

The fact that he specialises in the commodity market may indicate a tendency to call the reversal early - Think of Ospraie. Generally people who are specialists in a market that goes parabolic on funds flowing in from other asset classes sell/short too early.

That said I am looking at shorts in this area, but have to protect against being too early.

dr. fill · Mar 17, 2008

Quote from mokwit:

There is not much you really want to be long of when the global financial system as we know it is collapsing.

Not even money. It can become worthless.

dr. fill · Mar 17, 2008

Quote from mokwit:

Agree that it may yet have further to go - these things always go further and faster than you expect.

Given that commodities and RE are the only things with intrinsic value and RE is nowhere near bottom. Commodities could double on flight to value - with no actual consumption basis, no supply/demand function - as currencies evaporate.

flyingiguana · Mar 17, 2008

where can you get data on money flows to different asset classes?

achilles28 · Mar 17, 2008

Quote from dr. fill:

Given that commodities and RE are the only things with intrinsic value and RE is nowhere near bottom. Commodities could double on flight to value - with no actual consumption basis, no supply/demand function - as currencies evaporate.

Agree. A lot of cash was made shorting the RE top, mortgage, CDO and financials. From the looks of it, the smart money is not in equities.

Supply and Demand drivers are holding well.

Further, the only way out of this mess - bailouts and rate cuts. This is very inflationary for the Greenback - albeit less so for other currencies (pull a Euro/Oil or Euro/Wheat chart).