Random Roger (as he often does) had an interesting observation the other day about commodities. He referenced a Jim Rogers quote to the effect that one can't be a good investor without understanding commodities. Roger makes the point that the supply and demand factors in commodities are important to understand, and that much of the recent strength in equities likely has something to do with commodity factors. My long term view has been that we would see continued strength in commodities, although of late I have questioned this. Certainly, there has been some weakness, and I think the next week or two will give us a good idea of whether commodities (ex-oil, which still is nothing but strong) are finished for now or whether the bull continues.
Taking it a step further, there has been a lot of talk that much of the strength in commodities has been due to the economic awakening in China. You can easily find a lot of statistics about the boom there-the equivalent of a city the size of Houston is built there every year, there are 4 times as many cars in 2004 compared to 1994, etc. However, this has become so commonplace an idea as to become a meme, and when something is so widespread everybody knows it, I wonder if it isn't over.
Fade the memes. Sounds like it could be a meme, eh?
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