Thursday, January 19, 2023

The Periodic Table Of Commodity Returns

Two quick points up front:

1) though most commentary is a bit superficial in that the focus is on the long side only, commodities with futures are two-sided markets, that's the beauty of it.

2) to date, the long term returns from commodities are 0%. They are things to trade, not to cherish and treasure in some weird little grotto or shrine. mmm, I may have said too much.

From Visual Capitalist, January 17, one of my favorite data-visualization formats:

https://www.visualcapitalist.com/wp-content/uploads/2023/01/periodic-table-of-commodity-returns-2022.png

The Periodic Table of Commodity Returns (2013-2022)

Trying to predict which commodities will come out on top in any given year is tricky business—especially during this turbulent period in markets.

By looking back at previous years, investors can gain insights into long-term trends and patterns in commodity prices. To help better understand these trends, U.S. Global Investors releases a visualization called the Periodic Table of Commodity Returns at the outset of each year....

....MUCH MORE, click through for commentary and enlarged table.

If everyone who ventures into commodities on the speculative side were to keep this 2010 observation in mind Société Générale's Dylan Grice-"Commodities: ‘Their Expected Long-Run Real Return is 0%’", there would be fewer lamentations and rending of cloth.