The not-so-crazy case for commodities stocks Comm
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The not-so-crazy case for commodities stocks
Commentary: The worst of the declines may be over
Looking around the market right now, as momentum darlings like Tesla (NASDAQ:TSLA) and Netflix (NASDAQ:NFLX) start to show signs of stress, it’s worth wondering where the next hot investments will come from.
I’d like to stick my neck out and propose a crazy idea: Invest in commodities.
Yes, there are a host of logical reasons to run screaming from commodity stocks — the deep declines in these players over the last year, the soft outlook for materials prices and the general sense that a multi-decade run in commodities has fallen apart thanks to stagnant emerging markets.
But commodity stocks have been slashing costs, finding efficiencies and plotting a way forward through the last few years of persistent challenges… and eventually, they will reach a point where there are “right-sized” for the lean times and poised for big growth once things turn around.
And it can pay off big if you buy ahead of that turn.
I don’t pretend to know when the broader outlook for commodity prices will reverse, but I do think that thanks to decent valuations and the hopes of an eventual recovery that it may be worth shopping around for some bargain buys in the commodity sector. Even if you’re early, there’s a good chance that the worst of the declines are over. http://www.marketwatch.com/story/the-not-so-c...beforebell
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