| The merciless arithmetic of investing in commodity producers is imposing itself on many a portfolio: Copper down a few percentage points; copper stocks cut in half. It’s nice when the swing works in your favour; when it’s conspiring against your wealth, it’s an agony not even the Marquis de Sade could dream up.
The bad news is that there’s good reason to think that commodity prices are ready to wither even more. Europe is a disaster, the U.S. is too, and China’s economy is cooling fast. Since resources are priced at the margin – that is, the last unit of demand sets the price – it doesn’t take much of a slowdown to trigger drastic price cuts..............................................Full Article: Source
|