And finally, we leave you with a note from colleague Chris Mayer:
“Arresting fact of the day: Between March 10, 2000 and January 31, 2008, the average annual return from the S&P 500 is 1.52%, according the Financial Times. That’s nearly eight years of earning practically nothing on stocks. After factoring in inflation, the returns are negative.
“Inflation is rearing its ugly head again in a way we’ve not seen since the 1970s. The top story after the first two months of the year must be the commodity price surge. Commodities – things like wheat, gold, oil, metals – are off to their best start in more than half a century.
“The historic global benchmark for commodities, the CRB Spot Index, jumped 12% in February, the highest since July 1974. It’s up 15% for the first two months of the year, its best showing since 1956.
“Still, we have the Federal Reserve chairman saying: ‘I don’t think we’re anywhere near the situation that prevailed in the 1970s.’
“Is he smoking something, or what?
“The American economy is definitely slowing. Whether it is or isn’t actually contracting is a matter of debate. Just looking at how companies are doing, it’s not hard to see that North American operations are off. Overseas, though, it’s a different story. Companies with operations in China or India report that business is good.
“So it’s an interesting market for investors. Sometimes, it’s like picking over a minefield, because the price swings seem so great. But it’s that volatility that creates room for the stock picker to operate.”
Chris is looking into a quirky and unappreciated commodity that could pay off big for his Capital & Crisis readers. Stay tuned for that…and in the meantime, be sure and check out his recently released book, Invest Like a Dealmaker: Secrets from a Former Banking Insider.
Markets and Money