Friday, February 22, 2008

Commodity Bull Run Continues

Commodity bull run continues despite weak economic indicators arising from U.S. markets. Stocks continue to bear brunt of hugely pessimistic view towards riskier assets and thus are bleeding relentlessly. Gold and silver are shining due to smart money preffering safe heaven over riskier stocks. Equities have undergone huge pricewise correction since January 2008 till date and this extreme pessimism is unwarranted as it defies logic of huge bull rally in commodities due to continued global economic growth of over 4% and on the other hand total pessimism on equities! This can't continue for long, equities are now offering value at present levels and thus can be bought at. How much more equity markets will suffer is that no body can be precisely sure about and it will be foolish to predict that, money will start flowing into these riskeir assets when it finds commodities too hot to handle. Till then, stocks will be hugely volatile.