| What's your take on unfashionable | | | | Supply. |
| investments? Investments and markets that are | | | | |
| so hated that they are rarely talked about - | | | | The sophisticated investor understands one |
| that have little or no mention in the | | | | thing - whatever the current price of a |
| financial media and near the bottom of their | | | | product, it's price will ultimately correct |
| trend graphs...? | | | | to reflect the basic demand versus supply |
| | | | equation. Yes, we get bubbles - anyone that |
| I like them...sometimes. They are the ones | | | | invested money in "Useless Dot Com PLC" |
| with ten bagger potential - gains of 1000% | | | | around 2000 at a PE of about 967 will vouch |
| and more within a reasonable space of time. I | | | | for that. But ultimately, the market corrects |
| say "sometimes" because all too often, | | | | itself - overvalued markets and companies |
| investments are hated due to good reason - | | | | come crashing down with an almighty thud. And |
| there's a lot of wisdom in the price of any | | | | undervalued markets and companies get |
| given market. | | | | re-rated. |
| | | | |
| But the market does get it wrong sometimes. | | | | Why do they get re-rated? Because the market |
| At any given time there are investments that | | | | understands that there is an imbalance. In |
| should be far higher than their market price | | | | the case of Useless Dot Com PLC the market |
| - a correction will happen at some time and | | | | realized that the company (which by the way |
| that's why I love looking at hated | | | | is fictitious) was just sitting on some cash |
| investments. Listing them. Waiting for the | | | | with some far fetched business model with no |
| tide to turn. And getting in well before the | | | | underlying demand for it's core business |
| crowd when the indicators are right. | | | | activity or product. The result is that the |
| | | | market valuation for Useless Dot Com PLC was |
| That's exactly why the commodities market has | | | | trashed. |
| been on my radar for some time now - here's a | | | | |
| terrible performer that has performed sickly | | | | In the case of commodities, the market has no |
| over the past two decades - adjusted for | | | | choice but to re-rate the market upwards |
| inflation the value of commodities | | | | because (as we'll see) there is a significant |
| investments during this period has declined | | | | imbalance in the demand versus supply |
| significantly. And let me ask you something - | | | | equation. Global demand is far higher than |
| aside from small pockets (such as gold & oil) | | | | global supply - and ultimately this will push |
| how much attention do you see general | | | | prices up and up. |
| commodities getting? Do you see books about | | | | |
| them when you peruse the investment section | | | | Why There Is Increasing Global Demand For |
| at your local bookshop? Do you hear your | | | | Many Commodities, And Dwindling Supply. |
| friends boasting about their most recent | | | | |
| commodities investment? No - because at the | | | | The two rising super-powers - China and India |
| moment, despite the fact that prices are now | | | | are developing rapidly at the moment and |
| moving north with some conviction, | | | | consequently are consuming more and more |
| commodities are still unloved...and if as I | | | | commodities to fuel this stunning growth. |
| believe they will continue to rise, this | | | | China (and it's relatively youthful |
| could be the start of a longer term | | | | population) is already among the biggest |
| commodities bull run and a very good time to | | | | global consumer for commodities including |
| invest. | | | | platinum, steel, copper, iron and several |
| | | | other metals. The country is experiencing a |
| Did you know that commodities prices have | | | | construction boom and this has resulted in an |
| been heading upwards, almost un-noticed for | | | | incredible thirst for raw and processed |
| some time now? Coffee, copper, wood and sugar | | | | metals. India imports more gold and silver |
| are just a handful of the commodities that | | | | than any other nation, is investing heavily |
| have enjoyed between 40% to 80% price growth | | | | into it's infrastructure and is the fourth |
| per year in recent times. The exciting thing | | | | largest global consumer of crude oil in the |
| is that this could be just the start of a | | | | world. |
| long commodities bull run - and when you | | | | |
| think that the majority of the investment | | | | Both India and China are developing into |
| world still avoids commodities like the | | | | global super-powers - and in order to do |
| plague, there could be exciting times when | | | | this, their level of consumption of |
| the world finally wakes up to smell the | | | | commodities will be fierce and almost |
| coffee...quite literally. | | | | unsustainable over the next two decades. |
| | | | |
| The Case For Commodities Investment - A | | | | Now is the right time to get involved with |
| simple Question Of Growing Demand & Falling | | | | the commodities boom. |