Dennis Reley

Jim Rogers was quoted in Bloomberg yesterday and said the commodity bull has a long way to go. We here at the Real Deal like to follow the old adage of going where the smart money goes thats why we like Jim Rogers. This guy has made billions trading and he has been on this commodity supercycle theme sinec 1998-99.

He said,

“The shortest bull market for commodities lasted 15 years, the longest 23 years,’’ Rogers, 63, said in an interview. So if history is any guide, “they’ve got a long way to go.’’

“Supply and demand is terribly out of balance for nearly all commodities right now,’’ Rogers said in Singapore April 17. “This is not a bubble.”

“Nearly everything makes a new all-time high in a bull market,’’ said Rogers. He didn’t predict when gold would reach $1,000 an ounce”…

Oil hits record

Price IncreaseI know the mainstream media says its a “terror premium” or its about Iran. Quite frankly my view is more demand then supply. Yes there are disruptions in Nigeria and there are still facilities in the GOM offline. Couple this demand with the FED money pump and all commodiites are heading higher. Are we heading for $100 per barrel?…

CBS Marketwatch:

SAN FRANCISCO (MarketWatch) — As the world seeks alternatives to oil as a source of energy, uranium has been on a tear, scoring a gain of around 700% in six years as interest in nuclear power has revived.
“Uranium’s performance has been in a league of its own,” said Scott Wright, an analyst at financial-services company, Zeal LLC.
Uranium has been one of the best-performing commodities in this bull market, he said. Spot prices are trading at around $56 a pound, an eight-fold increase from as low as $7 back in 2000. See the latest uranium prices.
“And the way fundamentals look today, there could be a lot more room to run,” said Wright.
Crude and gold prices have seen strong gains, but they pale in comparison to uranium. Over the last six years, crude futures are up around 90% and gold futures prices have more than doubled.
The biggest reason for uranium’s rise? Simply put: supply scarcity.…

Smith Blog:

While screaming-head entertainers/pundits can call all the “bottoms” they want, even a cursory analysis of the HGX chart suggests the bottom is a long way down. Not shown on the chart is the third downleg, which will bring the index down to 50 or even lower.

Impossible, you say? Recall the dot-com meltdown, if you will. Take a real company such as Akamai (AKAM) which ran to $348 at the height of the dot-com mania in early 2000. It subsequently fell to 56 cents in October 2003. If the housing sector continues to build unwanted inventory and dumps that inventory for losses, why would anyone buy housing stocks? For the land, which is depreciating rapidly? For the book value of deteriorating assets?

I would say fair value of the housing index at the real bottom several years hence will be about 38. Give or take a few points; check back in October 2008 and we’ll see where the index stands at that point.…