Even as investors were re-embracing stocks in 2010 and 2011, they scored really big gains with one of the hottest commodities in the world: Silver. The precious metal soared in price from under $20 in August 2010 to nearly $50 an ounce by the next spring. In the hindsight, the silver spike was a classic bubble, fueled by inflation concerns that simply never materialized. Though few people could have guessed that silver would be capable of a 150% nine-month gain, few also would have predicted that the eventual slump in silver would be so extended. Silver… Read More

Even as investors were re-embracing stocks in 2010 and 2011, they scored really big gains with one of the hottest commodities in the world: Silver. The precious metal soared in price from under $20 in August 2010 to nearly $50 an ounce by the next spring. In the hindsight, the silver spike was a classic bubble, fueled by inflation concerns that simply never materialized. Though few people could have guessed that silver would be capable of a 150% nine-month gain, few also would have predicted that the eventual slump in silver would be so extended. Silver prices fell back below $30 an ounce by the start of 2013, and they’ve been in freefall ever since. A snapback to 2011 peaks is out of the cards. You can get a sense of just how painful the silver slump has been by glancing at the performance of key exchange-traded funds (ETFs).  The leveraged (2-times and 3-times) funds have been among the market’s worst performers. And when it comes to the silver producers themselves, it appears as if sentiment has  utterly collapsed. In… Read More

On March 11, 2011, a massive 9.0-magnitude earthquake erupted about 45 miles east of the Japanese coast. The earthquake let loose a huge tsunami that struck the Fukushima Daiichi nuclear power plant and caused a reactor meltdown. This was the worst nuclear disaster since the 1986 Chernobyl incident and caused bitter backlash against the nuclear power industry around the world. Japan immediately shut down its remaining nuclear plants and Germany followed suit. Both countries vowed to be nuclear free by 2030 and 2022, respectively. Was this the end to atomic energy?… Read More

On March 11, 2011, a massive 9.0-magnitude earthquake erupted about 45 miles east of the Japanese coast. The earthquake let loose a huge tsunami that struck the Fukushima Daiichi nuclear power plant and caused a reactor meltdown. This was the worst nuclear disaster since the 1986 Chernobyl incident and caused bitter backlash against the nuclear power industry around the world. Japan immediately shut down its remaining nuclear plants and Germany followed suit. Both countries vowed to be nuclear free by 2030 and 2022, respectively. Was this the end to atomic energy? As you can see from the chart below, major uranium producer Cameco (NYSE: CCJ) plummeted on the news:   But here’s where the story gets interesting… The Fukushima nuclear incident in Japan — an event that singlehandedly sparked a 50% plunge in uranium prices and raised speculation about the “end of atomic energy” — has actually had no impact whatsoever on global uranium demand. You see, most of Japan’s nuclear fuel is purchased under long-term supply agreements. Uranium fuel is thus delivered regularly to utilities there. Here’s… Read More

California and Texas, the nation’s most populous states, with a combined population of 65 million people, share another key trait: They are both parched. According to the National Oceanic and Atmospheric Administration, both states are experiencing a drought across roughly 80% of their land mass. That’s a real crisis when you consider how important agriculture is in those two states. And the phrase “mega-drought” may soon enter our lexicon. The American Meteorological Society’s Journal of Climate now warns that the U.S. Southwest may be facing decades of such extreme… Read More

California and Texas, the nation’s most populous states, with a combined population of 65 million people, share another key trait: They are both parched. According to the National Oceanic and Atmospheric Administration, both states are experiencing a drought across roughly 80% of their land mass. That’s a real crisis when you consider how important agriculture is in those two states. And the phrase “mega-drought” may soon enter our lexicon. The American Meteorological Society’s Journal of Climate now warns that the U.S. Southwest may be facing decades of such extreme dry conditions. #-ad_banner-#A solution may lie offshore: Seawater can be scrubbed through reverse osmosis filters, providing potable water to increasingly parched Southern California. Companies such as Consolidated Water (Nasdaq: CWCO) build and operate such plants. Other dry areas, such as the Middle East, are starting to boost investments in this technology. Solutions for the U.S. heartland will likely require greater water efficiency. The Oglala aquifer, which supplies water to many farms in the Central United States, has seen rapid depletion. As a result, conservation measures are expanding to curb water… Read More

Despite its historic bull run, the market is giving investors plenty to worry about. #-ad_banner-#And I’m not even referring to the many potential triggers for a nasty correction you hear a lot about in the news, like rising interest rates, global geopolitical turmoil or a generally overvalued stock market. No, the issue I’d like to focus on is much less publicized and more sector-specific, but the implications are still far-reaching. That’s because it involves the so-called shale boom.  The shale boom, as you may know, is the result of hydraulic fracturing (aka “fracking) and other newer drilling techniques. About a… Read More

Despite its historic bull run, the market is giving investors plenty to worry about. #-ad_banner-#And I’m not even referring to the many potential triggers for a nasty correction you hear a lot about in the news, like rising interest rates, global geopolitical turmoil or a generally overvalued stock market. No, the issue I’d like to focus on is much less publicized and more sector-specific, but the implications are still far-reaching. That’s because it involves the so-called shale boom.  The shale boom, as you may know, is the result of hydraulic fracturing (aka “fracking) and other newer drilling techniques. About a decade ago, energy companies began using these techniques to access oil and gas deposits that were previously unreachable, and since then the U.S. has become the world’s #1 natural gas producer and one of the world’s leading oil producers. If you follow the shale boom, then you’ve likely seen the many impressive estimates about future domestic energy production and heard all the talk about the U.S. finally achieving energy independence. And not only achieving it, but keeping it for decades to come. But what if the energy revolution ended much sooner than expected? This might not even seem like a… Read More

The super-rich are not like the rest of us. People like Warren Buffett and Bill Gates take on mythic status. As they build fortunes that exceed the Gross Domestic Product of many countries, every one of their financial moves is tracked as investors seek out the secrets to their success. South of the border, in Mexico, a man who has already amassed a net worth of more than $15 billion by focusing on commodities, is creating quite a buzz that investors may seek to replicate. He’s spending millions of dollars every week to build his exposure to one of the… Read More

The super-rich are not like the rest of us. People like Warren Buffett and Bill Gates take on mythic status. As they build fortunes that exceed the Gross Domestic Product of many countries, every one of their financial moves is tracked as investors seek out the secrets to their success. South of the border, in Mexico, a man who has already amassed a net worth of more than $15 billion by focusing on commodities, is creating quite a buzz that investors may seek to replicate. He’s spending millions of dollars every week to build his exposure to one of the most controversial commodities: Copper. The man in question is Germán Larrea Mota-Velasco, who controls Grupo Mexico, the third-largest copper mining firm in the world. Yet Mota-Velasco’s recent focus is on another miner that he also controls: Southern Copper Corp. (NYSE: SCCO). This is where things get complicated. Grupo Mexico owns 75% of Southern Copper and Mota-Velasco is spending some of his personal fortune to acquire part of the remaining 25% of Southern Copper that is still in the public float. Clearly, he sees greater near-term upside in the affiliate than the parent. Just look at his buying spree. Date Number… Read More

Last week, I told you about a supply shortage in one of the world’s most important metals… For the past several years, demand for this metal has been so high and supplies so thin, the market has had no choice but to tap a strategic Russian stock pile to cover the deficit. #-ad_banner-#But Russia’s reserves are almost gone… and if Russia hangs a “sold-out” sign on the door, then get ready for the price of this metal — palladium (a member of the platinum metals group or… Read More

Last week, I told you about a supply shortage in one of the world’s most important metals… For the past several years, demand for this metal has been so high and supplies so thin, the market has had no choice but to tap a strategic Russian stock pile to cover the deficit. #-ad_banner-#But Russia’s reserves are almost gone… and if Russia hangs a “sold-out” sign on the door, then get ready for the price of this metal — palladium (a member of the platinum metals group or (PGMs)) — to skyrocket.  Resource shortages like this are exactly the opportunities I look for in my premium newsletter, Scarcity and Real Wealth. With the demand for palladium soaring, and the global supply getting smaller every day, I think palladium is presenting investors with a good buying opportunity. But investing in palladium can be tricky… it’s not as well known as other metals like gold and silver, and it’s not nearly as frequently traded.  So how do you invest in it then? The easiest way is to invest in the metal is through an exchange-traded fund (ETF) like ETFS… Read More

With political leaders considering changes to taxes and fiscal policy that could have significant economic effects, the market is likely to be driven by irrational fears or hopes. After a deal is reached to avoid the fiscal cliff, or if the talks collapse and the nation plummets over the edge, traders may frantically buy or sell stocks and we could see a volatile move. Rather than try to guess which way things will go, it… Read More

With political leaders considering changes to taxes and fiscal policy that could have significant economic effects, the market is likely to be driven by irrational fears or hopes. After a deal is reached to avoid the fiscal cliff, or if the talks collapse and the nation plummets over the edge, traders may frantically buy or sell stocks and we could see a volatile move. Rather than try to guess which way things will go, it is important to have some trades that can benefit from either reaction.#-ad_banner-# Overvalued stocks could offer some protection against the downside risks of the market. These are the kind of stocks that could fall more than average in a market sell-off, or they could fall even if the broad stock market rises because they are overvalued. Buying low-cost put options offers a way to benefit from the potential drop in prices while limiting the risk to a small dollar amount. United States Steel (NYSE:… Read More

Stock market volatility has fallen to a six-month low, and an increase in volatility should be expected. As volatility expands, we should learn the direction of the next major trend. Volatility Contraction Points to a Big Move Prices ended last week with only a small change. SPDR S&P 500 (NYSE: SPY) lost 0.21% and PowerShares QQQ (Nasdaq: QQQ), an ETF that tracks the 100 largest Nasdaq stocks, fell 0.37%. Volatility declined throughout the week, and… Read More

Stock market volatility has fallen to a six-month low, and an increase in volatility should be expected. As volatility expands, we should learn the direction of the next major trend. Volatility Contraction Points to a Big Move Prices ended last week with only a small change. SPDR S&P 500 (NYSE: SPY) lost 0.21% and PowerShares QQQ (Nasdaq: QQQ), an ETF that tracks the 100 largest Nasdaq stocks, fell 0.37%. Volatility declined throughout the week, and now volatility in SPY may be pointing to bigger price moves ahead.  Market volatility tends to move in cycles from low to high values. Volatility has now fallen to a new six-month low. In the chart above, volatility is shown in the center with the Bollinger Bandwidth. This indicator measures the distance between the Bollinger Bands. Previous six-month lows in this indicator are highlighted by vertical lines. A price move of at least 6% within the next two months followed each of those signals.#-ad_banner-# Volatility indicators tell us only that… Read More

One of the biggest challenges for commodity investors is the state of the global economy, as I stated in this article. Weak economic growth in 2012 has kept a lid on the sector, so most commodities have fallen in price from a year ago. Copper, which is used in a range of economically-sensitive industries such as construction, is especially vulnerable to the vagaries of the global economy. The China factor As has been the case since the Great… Read More

One of the biggest challenges for commodity investors is the state of the global economy, as I stated in this article. Weak economic growth in 2012 has kept a lid on the sector, so most commodities have fallen in price from a year ago. Copper, which is used in a range of economically-sensitive industries such as construction, is especially vulnerable to the vagaries of the global economy. The China factor As has been the case since the Great Recession of 2008, the only bright spot for commodities has been China, and even that country showed signs of slowing in 2012. The good news: China is perking back up and could again set a positive tone for commodities — especially copper — in 2013. Analysts at Goldman Sachs have tallied up the various stimulus packages the provincial governments in China have proposed, and they came up with a stunning $3.2 trillion in ongoing… Read More

As I mentioned before, changing global climate has wrought havoc on the agricultural sector during the past year. Drought in the United States has stunted the yields of many crops, while unusual weather patterns elsewhere in the world led to sharp spikes — and drops — in farm yields across Asia, Latin America and Europe.#-ad_banner-# Yet it’s unwise to pay too close attention to these near-term events. Instead, focus on the clear long-term trend in place for global agriculture: Millions more people are joining the middle class in fast-growing places such as China, Brazil and India, and there is… Read More

As I mentioned before, changing global climate has wrought havoc on the agricultural sector during the past year. Drought in the United States has stunted the yields of many crops, while unusual weather patterns elsewhere in the world led to sharp spikes — and drops — in farm yields across Asia, Latin America and Europe.#-ad_banner-# Yet it’s unwise to pay too close attention to these near-term events. Instead, focus on the clear long-term trend in place for global agriculture: Millions more people are joining the middle class in fast-growing places such as China, Brazil and India, and there is a global push to ensure crop yields are maximized to meet this rising demand.  And the most surefire way to maintain robust farm output is through the judicious use of fertilizer. There are several key components to fertilizer, most notably potash and phosphate, both of which help soil to stimulate the ideal growing conditions for healthy crops.  The oligopoly pricing Just a handful of companies around the world control the production of key fertilizers such as potash and phosphate. For example, the top 10 producers of potash control 85% of the… Read More