staying the course

I want to remind myself of the assumption/rule I set up recently. Namely, that commodity prices are set in Asia. However, natural gas and gasoline are prices here, because of local and political forces. If natural gas falls, I will look to increase my investment in PDC if it should test its yearly low. As oil falls, I think Seadrill or the tanker stocks stand great chances of being bargains. Don't forget the rumors that 20 VLCCF's were chartered for storage that could be dumped on the market.

Remember, the long-term trend is of demand from Asia. The IMF just reported that global growth is strongest in China and Japan.

I was betting on high commodity prices (in dollars) providing an incentive for China to let the yuan rise in value. If commodity prices fall, I will have to get rid of my Asian currency position. In this scenario, falling prices will fuel further growth, which will keep commodity prices from falling too far.