Commodities Rising

About the Author

Jeffrey M. Christian, the author of Commodities Rising: The Reality Behind the Hype and How to Really Profit in the Commodities Market, is a distinguished figure in the realm of commodities research. He is the managing director and the largest shareholder of CPM Group, a New York-based consulting firm specializing in commodities research. His extensive expertise in the commodities market is reflected in his strategic insights and deep understanding of market dynamics, making him a trusted advisor for investors and institutions alike.

Main Idea

Commodities are fundamental to the global economy, serving as the building blocks of everyday life. In Commodities Rising, Jeffrey M. Christian demystifies the commodities market, providing investors with practical strategies to navigate this volatile yet profitable arena. He emphasizes the importance of due diligence and rational analysis, debunking common myths and misconceptions that often mislead investors. By highlighting the intrinsic value and potential of commodities, Christian encourages a balanced approach to incorporating them into diversified investment portfolios.

Table of Contents

1. The Commodities Rush is On
2. Why Commodities? Why Now?
3. Avoiding the Pitfalls
4. The Myths of the Commodities Supercycle
5. Commodities and the Global Economy
6. Commodities as an Asset Class
7. Commodity Investment Vehicles
8. Precious Metals
9. Energy Commodities
10. Grains and Oilseeds
11. The Fundamentals Still Apply

The Commodities Rush is On

Commodities, often referred to as tangible assets, have surged in prominence in financial markets due to their inherent physicality and essential role in the economy. According to Christian, "Commodities are things. They are stuff. They are the building blocks of the real economy" (Christian). The rise in commodity prices since 2003 can be attributed to increased demand from developing nations like China and India, coupled with heightened consumption in industrialized countries. However, Christian cautions that many investors enter the futures market with misconceptions and insufficient knowledge, leading to significant losses. Successful investors are those who perform thorough research and maintain a balanced perspective, ready to go long or short based on market conditions.

Why Commodities? Why Now?

The allure of commodities lies in their perceived risk-reward balance, especially during periods when traditional assets like stocks and bonds underperform. Christian identifies three major reasons for the current surge in commodity investments:

• Increased risk tolerance: Economic and political instability has pushed investors towards commodities as a means of seeking higher returns.
• Maturity as investments: Commodities have gained recognition and respectability, competing with stocks and bonds in terms of capital appreciation potential and portfolio diversification.
• Rising prices: The trend of rising commodity prices attracts investors, creating a positive feedback loop of increased demand and further price escalation.

Avoiding the Pitfalls

The commodities market is rife with opportunities, but it is equally laden with risks. Christian emphasizes the importance of reasoned and rational analysis over hype and speculation. He points out several pitfalls that investors must avoid to succeed: