For us commodity traders, Faber dropped a very nice tip right at the end of the interview. He thinks agriculture is getting real cheap - perhaps making a major bottom - and specifically said that corn, wheat, and soybeans could be interesting plays.
As you can see, the grains (represented below by ETF DBA) have not "reflated" much over the past year - they've been largely left behind:
Are the grains forming a major bottom? (Source: StockCharts.com)
In my experience trading the grains, I've found that it's best to wait for them to make a move, before piling in. Major breakouts are often excellent times to buy.
So we'll be keeping an eye on this developing story, and my interest is certainly piqued after Faber's comment.
Recommended reading:
- David Rosenberg's latest comments on the money supply and deflation
- Robert Prechter shares 8 bearish technical indicators
- Our Sacramento Casey Research Phyle Wrap for our May meeting
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