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Sell equities, buy commodities - long run valuation comparison

Posted: December 17th, 2017, 2:52 am
by Daytona
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Re: Sell equities, buy commodities - long run valuation comparison

Posted: December 17th, 2017, 7:40 am
by johnhemming
If that data were re-analysed to separate out oil and gas (and potentially other energy sources) from other commodities it would be more useful. It does, however, fail to separate revenue from capital and I am unsure how useful it is from the perspective of making investment decisions.

Re: Sell equities, buy commodities - long run valuation comparison

Posted: December 17th, 2017, 9:50 am
by johnhemming
The problem is that you can get a yield over time from equity or fixed interests, but there are generally costs of holding commodities. Hence you are trading entirely on the basis of perceived demand or supply. That does not mean it cannot be profitable, but the decision making process has to be different.

Probably a better thing to trade in than bitcoin.

Incidentally it is a spike in oil prices that I use as a leading indicator of a recession. Logically as commodities get more expensive other businesses make less profit.