Category: Commodities

Do commodities enhance a typical 60/40 (stock/bond) portfolio? That depends on a) who you ask, b) when you ask them, c) how you define “enhance,” and d) how you define “commodities.” In 2005, Gorton and Rouwenhorst found that an equally-weighted index of commodity futures (from July 1959 to December 2004) had historically produced the “same […]

The Metal That Failed Economics

Dr. Copper, Dr. Copper, Dr. Copper… Can we please stop with the “Dr. Copper” references? Not only does Copper not deserve a PhD in economics, by any unbiased measure it has failed Economics 101. Why? Repeat after me: because the direction of Copper by itself tells you nothing about the U.S. economy or the U.S. […]

“Know what you own, and know why you own it.” – Peter Lynch 1. What do you own? 2. Why do you own it? 3. How long do you plan on holding it for? So simple, it seems, but there are many investors who cannot answer these three most basic questions. At the end of […]

Crude Oil is at its highest level since last July. Meanwhile, the U.S. Dollar Index is not far from its lowest level since early 2015. Looking at the chart below, they seem to be polar opposites in recent years. The monthly correlation between Crude Oil and the Dollar Index (going back to 1983) is -.21, […]

What is Gold?

“On a final note, what was the one asset you did not want to own when I started Duquesne in 1981? Hint … it has traded for 5000 years and for the first time has a positive carry in many parts of the globe as bankers are now experimenting with the absurd notion of negative […]