The Little Book of Commodity Investing (Little Book Big Profits) [Hardcover]

John Stephenson (Author), John Mauldin (Foreword)

Book Description

Publication Date: July 19, 2010 | Series: Little Book Big Profits

The world has changed and so too has investing. The market is shell shocked and yesterday's momentum stocks are today's slow-motion stocks. But in the new reality of low-growth investing, commodities are hot and getting hotter. A rapidly industrializing and urbanizing Asia will be demanding lots more copper, zinc, iron ore, coal, fertilizers, gold and oil to transform their societies. Commodities are it and that's great news for investors who want to profit from the next great bull market in commodities. In fact, commodities may be about the only asset class that is likely to outperform the broad market in the future.

Although they are without a doubt important to the global economy, commodities are among the most misunderstood of all asset classes. Stocks, bonds and real estate all have legions of followers and plenty of experts agree on their importance within an investment portfolio, but venture into the world of commodities and you are into an area that's intimidating to the average investor, where suspicions run deep and understanding is limited. As a result, commodities get short-shrift in most investment accounts and investors miss out on some important opportunities.

The Little Book of Commodity Investing is an indispensible guide to learning the ins and outs of commodity investing. It's about identifying opportunities to profit from the coming bull market in commodities. It explains the benefits of commodities as part of a well diversified investment portfolio; covers all of the major commodities markets; what makes commodities and the companies that produce them tick; why commodities sometimes zig and then zag; what to buy and when to buy it; and why commodities are the next big thing.

Today's world is a very different world-a world where an understanding of commodities is a prerequisite for investment success. And The Little Book of Commodity Investing is the roadmap you need to discover where the opportunities of the future lie, and what to do about it.

Editorial Reviews

Review

‘…fantastic simplicity and elegance…the best explanation of "contango" and "backwardation" that I've read' (FT.com, October 2010).

From the Inside Flap

Your next, best investment opportunity isn't in stocks, bonds or real estate-it's in commodities, the basic raw materials of everyday life. Smart investors know that after a decade of decline, stocks aren't where the big money will be made. The winning bets of the future will be where global growth is going, rather than where it's been.

A rapid re-ordering of the global economic pecking order is underway, transforming the lives of millions and setting the stage for a massive bull market in commodities. Asia, led by China, is rising, and by 2020 the developing world is expected to be responsible for a staggering two-thirds of total global economic output. As millions of people around the world join the ranks of the global middle class, they'll be snapping up consumer items such as appliances and cars and underpinning an enormous demand for commodities. The economic strides made by the developing world so far have been breathtaking, but they're only just beginning. And that's a good news story for commodities.

From cocoa to copper, the world of commodities is awash in opportunity. Yet commodities get short shrift in most investment portfolios despite the fact there are long stretches of time when commodities soar while stocks and bonds swoon. This is one of those times.

Understanding commodities is a prerequisite for future investment success and The Little Book of Commodity Investing is an indispensable guide for investors-whether they're titans on Wall Street or retirees on Main Street-to the ins and outs of this hot sector, that will only get hotter. This practical guide covers:

• why commodities figure as part of any well diversified investment portfolio
• all major commodities and what makes the tick
• why commodities often zig when other investments zag
• why commodities are the next big thing.

See all Editorial Reviews

Product Details

• Hardcover: 256 pages
• Publisher: Wiley; 1 edition (July 19, 2010)
• Language: English
• ISBN-10: 0470678372
• ISBN-13: 978-0470678374
• Product Dimensions: 5.4 x 0.9 x 7.4 inches
• Shipping Weight: 9.6 ounces (View shipping rates and policies)
• Average Customer Review: 3.6 out of 5 stars  See all reviews (16 customer reviews)
• Amazon Best Sellers Rank: #588,457 in Books (See Top 100 in Books)

More About the Author

John Stephenson is an award-winning portfolio manager specializing in commoditiies and equities. In his books and free investment newsletter, John shows you where the stock, bond, currency and commodity markets are going. John is the author of The Little Book of Commodity Investing and Shell Shocked: How Canadians Can Invest After the Collapse.

Most Helpful Customer Reviews

24 of 25 people found the following review helpful

1.0 out of 5 stars Save money.. look for something else December 30, 2010

By LocalIndian

Format:Kindle Edition|Amazon Verified Purchase

If I could, I would have given zero stars for this book.

This is my first book on Commodities, but I could hardly find anything new that I have not heard on TV or see in news papers. It's all just very high level fluff throughout the book. From page one its pure marketing on "Invest in commodities". Why? China is consuming, India is consuming, stocks recently crashed, average traders are making 2 to 3 million a year in Chicago. At least half the book (give or take few percentage) is wasted on this marketing. Yeah... there are few details like how oil industry is trying to improve recovery, how shale gas resulted in oversupply, Amarnath went belly up in commodity trades... and invest in Commodities any way as you are going to make a fortune.

One of the most useless books I bout this holiday season. I could not comprehend how all seven folks were able to rate it 5 stars.

24 of 27 people found the following review helpful

5.0 out of 5 stars John Makes the Case Again September 19, 2010

By Scott Forbes

Format:Hardcover|Amazon Verified Purchase

Just as John's first book, Shell Shocked, laid out a compelling case for "buying all the Canada you can get," this book lays out the case for commodities. "Commodities" and "commodity trading" are intimidating terms to many investors, as are "futures" and "futures contracts." That's largely because American consumers are raised on the DOW and a few of the ancillary indices. A perfect example of that myopia is how people are presently yelling about the "lost decade" that investors have had from 2000-2010, conveniently leaving out the benefits of dividend reinvestment and the possiblity that individual investors and equity fund managers could have overweighted on Apple Inc. stock during the decade. Regardless, many individual investors buy the hype, panic, and make emotional decisions like putting lots of money into a savings account earning .05%.

It is in this sort of a climate that John helpfully points out that commodities are:

* not intimidating
* easy to understand
* a smart investment for our times

Why are commodities not intimidating? Because they're all around us. They're the things we use every day, like the gasoline that goes into our cars or the wheat and flour that we find in our bread. Sure, the price of gold gets all the headlines--it's sort of like the DOW of commodities--but there are so many more places that investors can put their money to work in commodities.

Commodities are easy to understand because they're being used or consumed all the time. Check out the shipments coming into a restaurant or a supermarket on any given day and you'll see commodities coming in that have been purchased and are about to be put to use by the restaurant or supermarket.

Why are commodities a smart investment for our times? Because people need them now and will need them more as economies grow. As John mentioned during his CNBC appearance over the summer, only 30% of China's population participates in the nation's economy. It's going to take more roads, bridges, buildings, fuel, food and other commodity-based material to bring that remaining 70% into the fold. That increasing demand, of course, means rising prices for relavant commodities.

John's book touches on myriad ways that commodities can, should, and will be used in the future. The Little Book of Commodity Investing is an easy read that teaches the reader why natural gas prices are more volatile than oil prices, that Brazil is actually the orange juice capitol of the world and many other fun facts. For that reason alone, it's a wonderful read. But John also gives the reader a plenty of ammunition regarding WHY he or she should invest in a given commodity. I'm not saying this book alone will make Joe Investor cash out his brokerage account and buy a nickel mine in Sudbury, Ontario, and that's a good thing. But it will make Joe Investor a lot more comfortable thinking about commodity investing and want to learn more.

8 of 8 people found the following review helpful

5.0 out of 5 stars For a better financial future September 16, 2010

By GFR

Format:Hardcover|Amazon Verified Purchase

This was one great read, and an easy one at that. You would think that a book about commodities would be about as dull as dishwater, but in The Little Book of Commodity Investing, author John Stephenson brings this world to life and explains why commodities figure in every portfolio. Best yet, I feel like a more informed investor. I would recommend this book without reservation to anyone who wants a better financial future.