Commodity Clues for Value Investors
The next part of my search for cheap is flipping through commodity price charts to see which of these markets has collapsed and declined over the past year. As a younger man I was fascinated by the idea of trading commodity futures, but the markets quickly proved to me that a value bias in futures is not really healthy -- unless you approached it with a much larger bankroll than I had at the time.
Still, paying attention to commodity prices makes sense for a fundamental investor. They are the raw ingredient for the products made by many companies, and they're a huge input into margins and profits. Cheaper steel could mean more profitable cars for Ford (F), and cheaper coffee prices could boost Starbucks (SBUX). I do not trade commodities anymore, but I do check the prices from time to time to see whether anything unusual or potentially profitable is occurring....680 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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