Bolling: Commodity Opportunities Abound

If you watch my TV shows, "Happy Hour" and "Strategy Room," you know I have been buying many commodity related exchange-traded funds and equities. I am more convinced than ever that if you have a 12- to 18-month time horizon, there are amazing opportunities out there in commodities. If you follow my content, I was very bearish on oil from $110 up. There was no reason for $147 crude given the economic slowdown we were seeing globally. As far oil overshot on the upside at $147, it has overshot on the downside. There is no reason to believe that $35 oil was realistic. Too many oil production projects based on $100-plus a barrel will be scrapped. Production will slow and demand will resume its multi-decade advance. It is very realistic to expect oil in the $75 to $90 range giving commodity related investments a handsome return from the depressed levels we are seeing now.

In energy related stocks and ETFs, I own U.S. Oil Fund(USO Quote), El Paso(EP Quote), and Quantum Fuels(QTWW Quote). In metals, I own iShares Silver Trust(SLV Quote) and SPDR Gold Shares(GLD Quote). And finally, I bought PowerShares DB Agriculture (DBA Quote) as the agricultural commodities have fallen with the rest of the dollar-based commodities. Much of the timing of this trade relies on the length of the current recession. It is possible that this trade may take months to open up. If the global economy struggles, so will this trade, so either have a longer-term horizon or trade smaller. I am in this for the long haul. At lower oil prices, I like the trade even more.