25 September 05
Commodities Trading Results
From one month ago, Long Islands commodity trading account – started with $2000 – moved up to $5833 and mine advanced to $5018. Long Islands gains came mostly from going long coffee, corn, hogs and gold. He lost money selling short copper, which in trading parlance could be described as jumping in front of a speeding train. My gains came mostly from going long the Mexican peso and selling short US Treasury Bonds.
The price of oil racing to new highs makes my earlier prediction of $100 per barrel this decade seem more realistic. I’ve previously recommended that traders should go long any sell-offs in oil or gold. I think the same strategy should be adopted with copper, which is showing excellent relative strength vis-à-vis the metals.
The two big ifs are whether the dollar and/or the US stock market will snap this year. They are both vunerable. The recent 350% premium on the Baidu.com IPO reminded me of the psychological extremes reached in 1999. If the current animal spirits are symptomatic of a double top then it may still be a while before the rapidly inflating second bubble bursts. But in the meantime: caveat emptor.
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