Stansberry Research Talks Commodities “Boom And Bust”

Stansberry Research is a subscription-based publisher that researchers and analyses financial information to millions of investors around the world. Their goal is to provide information that does not follow a subset of views, but instead, that offers a variety of opinions, recommendations, and strategies allowing investors to make decisions based on the well-curated information provided.

They tend to keep their eyes on the resource sector of note because they can make for a very diverse portfolio of assets outside of traditional ones like stocks, bonds, and real estate.

Before investing in resources, it is essential to know a few “laws.” First, commodities are a part of the free market, and there are cyclical. This characteristic means that for any given boom, and bust can be assumed to follow, and the reverse is also true. Based on supply and demand, whenever things fluctuate significantly, the market needs to correct itself towards an equilibrium. One of the main factors in this are the producers who try to meet the demand of consumers, but this can take some time with resources. This long recovery time also translates to commodities’ independence from the stock market. This is because they trade base on their supply.

What is an example of a commodity? One prime example given is coffee which is disliked by most investors based on the Commitment of Traders (COT) report, according to Stansberry Research. It has experienced several booms and busts in the last decade, and it is due for another soon.

Stansberry Research acknowledges that it is not the only commodity that they are tracking, and by no means are they saying to buy into it at this time because it is not yet on the uptrend. Though, the other commodity they are keeping an eye on is legal marijuana. Whether you like it or not, it is a commodity and is gaining a lot of support in the United States. Already, more than half of states have legalized it in some capacity.

The only issue is it remains illegal federally, hence the reason they are keeping an eye on it says Stansberry Research. A significant concern is investing without exposing yourself as the government could shut down companies behind it even in states where it is legal, cutting into your portfolio.