 
Subscribe To Our Articles
"Commodities
are for Crafty not Crazy Investors"
June 20, 2007
Remember my 'Crazy Like A Fox' subscriber? (See
my previous articles entitled, “A
Crazy Man’s Rant or Right On” and “Crazy
Man’s Rant – He’s Crazy Life A Fox”). He continues (like
many of us) to be a proponent of investing in commodities and
gold, silver, uranium, oil and gas in particular and he
continues to prosper. Many people have wondered how he has been
so successful so I asked him recently. Below are a few comments
regarding his approach to investing both in the past, now and
the foreseeable future.
"First, contrary to all the real experts, I can't
predict the future of the economy and financial markets with any
degree of certainty. I especially can't time anything that
would make sense on which to base trading decisions. Equally I
can't compete with the smart guys, the institutions with all
their specialized people, formulas, software and money to do
everything top drawer. Nor can I beat them to the trigger or
the exits. So attempts to time the market, alter my portfolio
balance between sectors, investment vehicles and geographic
regions is pretty much hopeless for me. I therefore do not
trade, rather I attempt to invest.
When I take a position it pretty much stays in place
with a little pruning now and then, here and there. What
I look for is capital preservation before growth. I look
for risk minimization rather than making the big score.
I come to my conclusions mainly by informing myself of economic
and political fundamentals. Hence technical charts used
by traders tend to be of marginal value to me, but are nonetheless
a serious curiosity.
What I do know are some very large and
unassailable global economic realities...such as peak oil and
permanently high energy prices, the power of environmentalists
and the man made CO2 boogeyman on public policy and politicians,
the time horizons of public policy decision makers being the
length of time to the next election, that inflation begins with
money supply and credit that is in excess of real economic
growth, that the conflict between pluralist and secularist
cultures with Islamic fundamentalism is only beginning
and will present huge problems for the foreseeable future, that
Asia in particular is increasingly driving the fundamentals of
the global economy with huge internal demand for infrastructure
and internal consumer growth, that the demand driven by that
growth has placed the resource/commodities sector in a long term
secular growth mode which has more than several years yet to
run, that both agricultural commodities and most minerals fit
into this category, that subsidizing of corn based ethanol is an
agribusiness and political wet dream, a huge technological
bummer, does nothing for energy self sufficiency, doesn't add
any net energy to world supply and will cause the price of
animal feed and human food to dramatically escalate in price. I
also add governmental budgetary and trade deficits, debt
and huge magnitudes of unfunded liabilities coupled with highly
leveraged private sector debt, much of which is unregulated and
not even understood....... Enough of this, but I can add many
more and discuss the implications of each at a later date.
What I conclude is that our infamous Goldilocks
economy of the past and present cannot last forever when we have
"givens" of the kind noted above.
Therefore I protect my equity with precious metals
in their various forms and grow it with key commodities such as
those with tight supply/demand fundamentals. Energy and in
particular oil, uranium and natural gas head the list. Certain
base metals critical to the production of infrastructure which
use copious quantities of steel and ancillary products top my
list of growth potential. While I haven't taken a position, I
think certain agricultural commodities must also be on one's
"must have" list.
Summary? Carefully select key commodities
and investment products and companies from locations with stable
politics and currency growth that reflects economic growth -
read Canada and Australia. Sit tight and watch the inevitable.
What is that? Clearly currencies growing at 3+ X the
rate of their economies create conditions for future
price inflation and perhaps hyperinflation given the growing
concerns over declining values of the currencies of those
countries. I look to the future where serious crises will be
currency and interest rate driven emanating from reckless
financial policies and practices. In the meantime I carry on
with life convinced of the merits of my analysis and not at all
worried about the short term rhythms of the S&P, DOW, NASDAQ or
bonds. To me their machinations are nothing more than background
noise which deflects one from the key issues.
I am currently fully invested, confident in my
analyses as outlined above, and sitting back enjoying life to
the fullest...good wine, good friends and good times - as my
choice of commodities continue to escalate in value. Yes, as
someone once said 'I am crazy like a fox' and laughing all the
way to the bank!"
Please visit our
website to read our previous articles and for education and
information on warrants.
June 20, 2007
Dudley Pierce Baker
Email:
info@preciousmetalswarrants.com
Website:
PreciousMetalsWarrants
Dudley Baker is the owner/editor of Precious
Metals Warrants, a market data service which provides you with
the details on all mining & energy companies with warrants
trading on the U. S. and Canadian Exchanges. As new warrants
are listed for trading we alert you via an e-mail blast. You
are provided with links to the companies’ websites, links to
quotes and charts, tips for placing orders and much, much more.
We do not make any specific recommendations in our service. We
do the work for you and provide you with the knowledge, trading
tips and the confidence in placing your orders.
.
. . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . .
Disclosure/Disclaimer Statement
PreciousMetalsWarrants.com is not an investment advisor and any reference to specific securities does not constitute a recommendation thereof. Neither the information, nor the opinions expressed should be construed as a solicitation to buy any securities mentioned in this Service. Examples given are only intended to make investors aware of the potential rewards of investing in Warrants. Investors are recommended to obtain the advice of a qualified investment advisor before entering into any transactions involving stocks or Warrants.
|
