Wednesday, September 18, 2019

Commodities can be viewed as another form of money

Most commodities do not have structural bull markets. They move from a situation of oversupply like we have in sugar and then the oversupply leads to inventory liquidation, the reduction of production and then prices go ballistic and as soon as prices go up strongly, new supplies come in. An individual can buy a stock and if the management is good, they will grow the company overtime. 

In the case of commodities, there is hardly anything as long term investing although and I do not consider precious metals to be commodities, I consider them more to be money. 

If you bought gold in 20 years ago in 2000, you have outperformed Berkshire Hathaway which is essentially controlled by Warren Buffett. Precious metals are from a longer term perspective relatively attractive but they do not perform as well as a stock market index over the long run. 

via economictimes