Time To Have Your Favorite Commodities Hedge Fund Make You A Copper Bracelet
I'm written time and again that industrial metals are in the biggest bubble in the last one hundred years. I remember reading some time ago the cost of mining a pound of copper was something ridiculous like 1-2 cents. Maybe with petrol prices so high, it's 3 cents. With copper well over $3 and at one time $4, it's time to have your favorite metals hedge fund make you a copper bracelet with any delivery they may have taken on expiry of their futures contracts.
Isn't it interesting that so many money professionals have been out convincing retirement fund managers that commodities are non correlated to stocks and provide a superior return over the last thirty years? By the way, that is an extremely dubious statement unless you are a very aggressive market timing commodity trader who is taking tremendous risk. Now, retirement funds are left holding the bag, adding to their under performance and unfunded liabilities should prices collapse. Now, copper hasn't fallen off of the cliff yet so hopefully retirement funds will do something they shouldn't be doing, which is aggressively trading, and beat a path to the exit.
Interesting quote from an old geezer in an article at Bloomberg today. "The cost of taking copper out of the ground is so low, I don't know how we can justify these prices,'' said Warren Gelman, 73, president of distributor Kataman Metals Inc. in St Louis. "$4 overwhelmed me. $3 copper is way overpriced.''
So, does one believe a 73 year old president of a metals company who has lived through decades of market dynamics or a 35 year old Wall Street representatitive who tells you it's different this time?
What's a fair price for copper? How about less than $1? That sounds fair to me. That's the long term average. Never, ever believe it's different this time. Copper's price came awfully close to the low end of silver's price range this cycle. That either means we are seeing a collapse of our economic system because of monetary issues or we are in a bubble. It's copper not diamonds. The long term availability of copper is coming out of our ears.
Isn't it interesting that so many money professionals have been out convincing retirement fund managers that commodities are non correlated to stocks and provide a superior return over the last thirty years? By the way, that is an extremely dubious statement unless you are a very aggressive market timing commodity trader who is taking tremendous risk. Now, retirement funds are left holding the bag, adding to their under performance and unfunded liabilities should prices collapse. Now, copper hasn't fallen off of the cliff yet so hopefully retirement funds will do something they shouldn't be doing, which is aggressively trading, and beat a path to the exit.
Interesting quote from an old geezer in an article at Bloomberg today. "The cost of taking copper out of the ground is so low, I don't know how we can justify these prices,'' said Warren Gelman, 73, president of distributor Kataman Metals Inc. in St Louis. "$4 overwhelmed me. $3 copper is way overpriced.''
So, does one believe a 73 year old president of a metals company who has lived through decades of market dynamics or a 35 year old Wall Street representatitive who tells you it's different this time?
What's a fair price for copper? How about less than $1? That sounds fair to me. That's the long term average. Never, ever believe it's different this time. Copper's price came awfully close to the low end of silver's price range this cycle. That either means we are seeing a collapse of our economic system because of monetary issues or we are in a bubble. It's copper not diamonds. The long term availability of copper is coming out of our ears.
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