Think before you link stocks and commodities

摘要

Common assumptions and some anecdotal evidence suggest that traders might better their returns if they focused on the companies dealing in commodities rather than the commodities themselves, but do the data support it? In a gold rush, sell shovels. That advice, in one form or another, no doubt preceded the California gold rush, but is there a better illustration of this axiom than the relative profits of various '49ers and Levi Strauss, purveyor of blue jeans thereto? Does it follow that in a modem-day commodity rally we should forego trading the underlying commodity and focus instead on the stocks of corporations involved in the production and processing of those commodities? (See "The producers," "A consuming passion" and "Due process for commodities," June through August 2002.) And given the surging popularity of exchange-traded funds (ETF) linked to various sub-indexes, should any of those instruments earn our investment dollars the way various resource-oriented mutual funds once did?