cross postie from FA - long about commodity and momentum investing

Sol wrote below,

"I have taken advantage of the oil/metals via the New Era - T Rowe
Price - fund.

Rono, I read your post a few days ago about commodities being in a
bull-market thru 2016 - with the admitted hiccups along the way.

How are you positioned right now in this sector: etfs, mutual funds,
single stocks (the silver etf is having a terrific impact upon silver
stocks; I believe we are in the 21-day SEC quiet period still for
review of the silver etf), etc.

You also mentioned that you use - I believe it was you - fundvision.com
as a trading tool. I went to the site and it appears that some links
are for paying or members only - is that correct? What specific threads
on that site do you read?

Thanks for everybody's insights; thanks Roy for a great website."

Hi Sol,

Take this with however many grains of salt. As I mentioned,
historically, commodity bull markets have run for years and the folks I
read see this one lasting until 2015 or so. Personally, I see it
lasting longer due to the non-renewable nature of commodities and
continued population increases of our race. Even though birth rates in
the west and much of asia are slowing, futurists don't see us hitting
worldwide ZPG until ~2060-2065. For those that don't agree with this
future, the commodity scarcity only gets worse. The only bump in this
road would be a worldwide depression ala Harry Dent starting in 2009/10
and lasting until 2023. Even this while dampening demand for
commodities would increase their demand as stores of wealth, so it
could be a net/net wash. In summary, I'm way bullish on commodities for
the intermediate to long term and think that they deserve a place in
everyone's wellrounded asset allocation.

For the normal b&h passive investor, this would be easiest with a well
rounded natural resource fund like Price New Era PRNEX, RS Global
RSNRX, US Global PSPFX or any number of other alternatives. My wife's
rollover IRA at Price is a good example where we have her about 8%
PRNEX and her Roth IRA is ~10% RSNRX and her rollover IRA at Vanguard
is ~10% VGPMX.

With our taxable acct (mostly b&h long term dividend paying blue chips)
we have a total of 24% in natural resources of which 8% is with TGLDX
and the other 16% are stocks XOM, PCL, KMP.

As for myself, I've taken a more aggressive approach with my 3 deferred
accts . . . but I'm still working and contributing, so my risk
tolerance is higher and my effective time horizon longer.

At this moment I'm 5% cash, 6% PRPFX (Permanent Portfolio Fund), 15%
broad naturual resources, 29% dividend paying safe stuff, and 34%
precious metals. [note: do not try this at home ;-) ]. The rest is a
mishmash of this and that. Also, the cash I recently raised went to
increase the dividend paying stuff.

I presently don't have any ETF's, but am using mutual funds and
individual stocks. In precious metals, funds are TGLDX (taxable) &
UNWPX. Stocks are gold - GG, GRS, AUY, and NXG; silver AEMLW, BGO, MRB,
WTZ, CDE, PAAS, SLGLF.OB, SVMFF.PK and YZCCF.PK. For palladium PAL.

For natural resources, I've got funds PSPFX, RSNRX and PRNEX. For
individual stocks I own BHP, RIO and FDG.

As for active trading, I'm not sure that I really do that much relative
to many. I'm more of a momentum trader that would just as soon find a
long term trend and ride it for months or even years. Fundvision is a
board for very active traders using technical analysis and charts. It
used to be completely free and had a larger following, but part of it
is subscription. This makes some of the posties confusing or obscure.
They make very short term moves using profunds leveraged funds on both
the long and short side. I wouldn't even attempt this myself, but a lot
of folks do so successfully.

In my case, I'm looking for long term trends - not short swings. My
trading vehicles don't allow me that much quickness - at least not as
much as is needed. For this reason I prefer other sources of
information - this board, bob's (link below), mutual fund tables in IBD
and Barrons, early morning biz programs (CNBC and Bloomberg), etc.

A note about Bob's momentum ranking program. I use it to identify
trends in funds and ETF's - what types are moving up or down - what's
riding high, etc. I don't use it to trigger trades. I also use it to
identify new funds. This is the same thing I use the mutual fund tables
in IBD and Barrons - what types of funds are positive - what are the
outperformers in what time periods - that is what's moving strong in
the short run vs the long run and vice versa. In IBD they rank the
sectors weekly - with the changes - what's moving up or down.

I also use charts, but am hardly a technician - but I can identify a
pretty picture.

just some thoughts,

rono