Tuesday, September 19, 2006
Commodities Boom is Over?
The commodity indexes have dropped more than 10 percent from their peaks, leading Wall Street to assume the commodity boom is over. Are they right?
Regarding oil, I don't believe the crisis in the Middle East is over. China and India are growth at over 9 percent during the past four years, even they slow down, they are still growing. So I would rather bet that it's a correction rather than entering a bear market.
Regarding oil, I don't believe the crisis in the Middle East is over. China and India are growth at over 9 percent during the past four years, even they slow down, they are still growing. So I would rather bet that it's a correction rather than entering a bear market.
Wednesday, September 13, 2006
Outlook
The Japan funds I am holding have a lost over 10%. That seems to be a bad idea of over-weighting in Japan market.
Players in oil, gold and other commodity markets are feared of a global slow down. When the world economy loss momentum, that will also end the interest rate hike. Yet, the decline in energy prices should also reduce the resistance to future growth. By this reasoning, the trouble won't get too worse as it's not something that can reinforce itself.
The general outlook in emerging markets is still good. Yet, I suspect the decline in commodity markets together with the slowing of housing market in US would trigger a further correction in global equity markets. This may take a few weeks. If so, that would be a good time to buy.
Players in oil, gold and other commodity markets are feared of a global slow down. When the world economy loss momentum, that will also end the interest rate hike. Yet, the decline in energy prices should also reduce the resistance to future growth. By this reasoning, the trouble won't get too worse as it's not something that can reinforce itself.
The general outlook in emerging markets is still good. Yet, I suspect the decline in commodity markets together with the slowing of housing market in US would trigger a further correction in global equity markets. This may take a few weeks. If so, that would be a good time to buy.
