The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (
) -- Oh, boy, another bunch of talking heads -- only I was one of them!
The Kudlow Report
bullish call on commodities saved the market. Geez, it was clear that nobody would ever agree with the vampire squid; otherwise you'd be called a flip-flopper or some derogatory name. What gives? It was just a few years ago that a
was the toast of the town, and now it's paramount to the top of the market. I just thought oil would rip and copper was an unknown since the Chinese lie -- I mean, restate over and over, their metals inventory numbers.
Investors need to get real. Just because Goldman said something doesn't mean it ain't so. Do they have the monopoly on thought? Last week, I thought oil was ready for a rebound without evil Goldman telling me. Sure, you can hate them because of the power they have over markets or the dark deals you wish you were involved in. Let's break this down and get past the emotion of hating on the popular kid in school just because he makes more money than you.
Right here, we are at a critical juncture of deciding what we believe about Chinese inventories. What does this have to do with Goldman? Nothing. April copper purchases were down for the Chinese, and commodity traders freaked out since they are top buyers. Is this the end of the world or is China working off inventories when speculators push the price too high on the short term? It comes down to this. If you think the last half of the year will be mediocre to good, then the Chinese and Americans will have to restock copper and oil. On the other hand, if you are buying gold, Glocks and dried food for the end of the world (seriously, QE2 ends and so does Earth?), then the April inventory numbers are the first sign of the rapture.
I say it is a shakeout, and expect more of it this summer. If you are not trading commodities with nimble fingers, you are lunch for the pros -- both long and short players will eat you up on the swings. The numbers are clear to me. Manufacturing is still up, and world trade keeps moving up. So who cares if we don't have full industrial capacity and strong wage growth -- you want rampant inflation? If you don't like higher commodity prices and lower inflation, move to India and get both. I would rather play what is working and live in America.
Lee Munson, CFA, CFP, is chief investment officer of Portfolio Asset Management, a wealth-consultant firm based in the Southwest. He is a regular guest on CNBC's "The Kudlow Report" and has appeared in the Wall Street Journal, Smart Money and Kiplinger Personal Finance. Munson began his career in the 1990s as a trader on Wall Street. He runs a hedge fund and oversses his firm's capital.