Broad commodities enter structural asset class shift
The guest argued that the broad commodity complex is in a powerful, non-leveraged upward trend that will outperform traditional equities over the next few years.
The argument
The Bloomberg Commodity Index broke out last October and has risen significantly without major headlines. While oil is structurally headed to $200-$300, a short-term pullback to the $80s is expected to flush out late longs, presenting a prime buying opportunity for energy stocks.
The thesis, stress-tested
✓ What validates it
- ✓Bloomberg Commodity Index continuing its steady climb above current levels
- ✓WTI oil stabilizing in the $80s after a flush-out of geopolitical longs
▸ Risks discussed
- ▸Short-term corrections flushing out late momentum buyers in subcomponents like oil
Hear it yourself
"You need to think elsewhere. And when that occurs, money starts to flow elsewhere. No. The money flow doesn't stop. The central bank, in fact, is about to accelerate it as we know. In fact, they are already. It goes where investors, asset managers, corporations, families wish to put it. And if they don't wanna put it in stocks anymore, then that bubble could break. It'll go somewhere else. Right now, I think one of the main categories, which everybody thinks is, quote, inflation, is the commodity category. Oil prices, grain prices, sugar prices, cotton prices."
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